For reasons which have been well explored – and to which we will return, the prime minister and leader of the opposition have not had good starts to 2016. But as parliament returns for its first full week in 2016, my tip is to keep an eye on what’s happening in parliament’s select committees. While the cabinet and shadow cabinet get sidetracked into internal disputes, I suspect that some of the more interesting policy thinking and challenge may well come from these committees.
Meg Hillier did an excellent job as chair of the public accounts committee last week in highlighting the Department for Work and Pensions’ utter failure in the management of back to work tests. We have all heard the stories of the way people were mistreated by Atos when they were carrying out the tests. It seems that since they have pulled out of the contract, things have gone from bad to worse. Now it transpires that the programme of testing is costing more to administer than it is saving in benefit payments. It is often said that the Tories do not mind being seen as cruel as long as people continue to believe they are competent. Here, once again, they have achieved the double whammy of cruel incompetence – and it took a select committee chair to bring this to public attention.
I am also keeping a keen eye open for the appearance before the Treasury committee of the Financial Conduct Authority who recently announced that they are shelving their review into the culture of the banking sector. This news emerged on new year’s eve. It appears that the only part of the so-called ‘establishment’ to escape scrutiny and accountability in recent years will be the bankers.
My instincts have never been to bash the private sector and financial services in particular. Unlike some, I am proud of our pre-eminent position in the world as providers of financial services. We have a whopping comparative advantage in this sector, they create large export earnings, employ thousands of people in largely well paid work and, while important for London, things are also booming in Edinburgh and Leeds as well as providing work and income across the country.
But we are still recovering from an international financial crisis that required concerted government action and public funds to prevent it destroying even more jobs and savings. There is ongoing suspicion about whether the pay earned at the top of the sector is justified by the quality of leadership provided. There are still practices such as the pay and commission arrangements for the sale of some financial products which risk a repeat of the miss selling we have seen before. Add to this, the changing nature of the industry with technology and advanced maths replacing the significance of relationships and ‘gentlemanly’ conduct and it is hard to understand why this is not the right time for an independent and careful look at whether the culture and practices in the sector are right for a successful future.
The Financial Conduct Authority weakly says that they will continue to support the individual bank’s reform efforts. The whole point about culture is that there are systemic influences and it is not always easy for those imbued with the current culture to challenge it for the future. I expect the Treasury committee to expose the reasoning for this decision and to question the motives. They should push for the decision to be reversed. This is what I would hope a good opposition would do – for now I may have to place my faith in the parliamentary committee system.
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Jacqui Smith is a former home secretary and former chief whip, she writes the Monday Politics column for Progress, and tweets @Jacqui_Smith1
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