Advisers have backed the new Prime Minister’s cabinet appointments, in particular Sajid Javid as Chancellor.
In what was described as a “ruthless reshuffle” and “cabinet carnage” yesterday afternoon (July 24), newly appointed prime minister Boris Johnson gave the chancellor role to former home secretary and once managing director of Deutsche Bank, Mr Javid.
Amber Rudd managed to hold onto the role of secretary of state for Work and Pensions — a position she has held since November last year. She was given the additional brief of minister for Women and Equalities.
Mr Javid was given the keys to Number 11 after previous chancellor Philip Hammond resigned yesterday. He told Theresa May her successor “must be free to choose a chancellor” who is “fully aligned with his policy position”.
Martin Bamford, managing director at Informed Choice, said it was time for Mr Hammond to move on as chancellor, branding his approach to public finances “frankly uninspiring”.
But Peter Chadborn, director at Plan Money, said the ex-chancellor had been a “relatively safe pair of hands” for the country’s finances and that he was sad to see him go.
Mr Bamford said Mr Javid was an “interesting choice” for chancellor and that his previous banking career should give him an insight into the real world, something he said was increasingly rare for politicians.
David Hearne, director at Wealth Management Adviser, agreed, while criticising Mr Hammond for not tackling the complexities of the tax and pensions systems.
He said he hoped Mr Javid would tackle these issues, adding: “He will hopefully bring some new ideas that will simplify taxes and encourage businesses to invest.”
Scott Gallacher, financial planner at Rowley Turton, said it was a shame to see Mr Hammond go, but he was happy his replacement had the “right credentials” with experience in banking and the Treasury.
But Darren Cooke, financial planner at Red Circle Financial Planning, disagreed with the overall positive sentiment from other advisers.
He said: “I’m not thrilled [about Mr Javid becoming chancellor]. He seems about as clueless as the rest of this cabinet.”
Mr Cooke said some of his ideas, such as stopping auto-enrolment in a no-deal Brexit, would be “awful”.
Meanwhile advisers were also thankful to see some stability within the pensions sector.
The department, which is embattled with issues such as the tapered annual allowance — which is causing problems for doctors' and teachers' pensions — and the closure of defined benefit schemes, has seen some stability with the re-appointment of Ms Rudd.
Mr Hearne said Mr Johnson was right to keep Ms Rudd in the department as he thought changes to benefits and pensions were “long-term projects” that had been hindered by ever-changing ministers.
However, he added that she should have not been given the additional duties of women and equalities, stating this “deserved its own minister”.
Mr Bamford agreed, adding that “continuity in the pensions secretary role is so important”.
He said: “I’ve no doubt that Ms Rudd has received plenty of representations from stakeholders in recent months around key pension topics.
“In the spirit of the new energy and enthusiasm the Prime Minister claims to bring to the government, it would be nice to see some decisive pension changes in the next budget.”
Mr Chadborn also thought consistency was the “greatest criteria” with regards to the pensions secretary, while Mr Gallacher said any unnecessary changes to the secretary of state for Work and Pensions would not have been welcome.
Overall though, Mr Cooke thought it “didn’t make a blind bit of difference” who was in the roles as until October 31 (the Brexit deadline), nothing else would get done.
“Beyond that,” he added, “I think we will have a general election and possibly a cabinet reshuffle anyway.”
As Mr Javid takes the Treasury reigns, FTAdviser took a look at what advisers can expect from his time in office.
From his position as home secretary and the policies promised during his leadership bid, it is likely the UK could see a rise in spending, a slashing of tax rates and a shake up of pension rules over the next months.
imogen.tew@ft.com
