Last week it was revealed that former chancellor George Osborne will be taking up a paid appointment at BlackRock, one of the biggest asset managers in the UK.
The news that Osborne was stepping into a well-paid role with an asset manager was relegated from the front pages by the fact news of his appointment was broken just as Donald Trump was about to be inaugurated as president of the United States.
He follows in the footsteps of his former chief of staff Rupert Harrison, who joined BlackRock last year.
Harrison's appointment raised some uncomfortable questions about the relationship between former senior members of government staff and private sector businesses.
High up among these concerns was the role of the The Advisory Committee on Business Appointments (Acoba), supposedly the guardian of the revolving door between public and private sector. Private Eye in particular has covered the at times laid back approach this body seems to take.
Now Osborne's appointment once again highlights concerns about this body, in this case particularly highlighting oversights on pension policy which has affected advisers and their clients around the UK.
Former ministers (whether still an MP like Osborne or no longer on the parliamentary payroll, such as ex-pensions minister Steve Webb who now works full time for Royal London) must notify Acoba before accepting any role in the private sector.
In theory this should highlight where former ministers may have helped their new employers, and whether having a senior ex-government figure will give a company an unfair advantage over competitors.
The committee is advisory. Its role is not so much permitting or blocking appointments as looking to see if there was any evidence of impropriety in those roles being secured: did that minister do something that sealed him/her a job at their new employer?
But even so it should look at whether the position is in an industry or with a company that was affected by the minister’s policy choices. It would also be logical to look at how much contact the minister had with that business while in office, how many meetings were there and what was discussed.
For this it relies on others for its evidence, in this case asking the Treasury.
A look at Acoba's letter of approval to Osborne highlights why this does not seem to be working in reality.
‘The committee noted that while you were chancellor you had contact both with BlackRock and with its competitors in the same field, though this was to discuss the general economic situation,' the letter said.
'It was reassured by confirmation from your former department, Her Majesty’s Treasury that there were no specific policy decisions from your time in office that would have specifically affected BlackRock, and the permanent secretary had no concerns about you taking up this post.’
Osborne was chancellor for six years. It would have been strange if his policies did not affect one the world's biggest asset managers.
More specifically, one of his policies definitely did: pension freedoms.
The policy, which was announced in the 2014 Budget, took pension providers by surprise. It pretty much did for Partnership Assurance, the enhance annuity specialist, which the following year merged with its rival Just Retirement.
However, not everyone was worried by the changes to the existing pension system. Langcat consulting director Mike Barrett pointed me to an article in the Financial Times from April 2014 about a certain asset management company.
‘BlackRock, the word’s largest asset manager, is to swoop into Britain’s pensions market mounting an aggressive challenge to UK life insurers after concluding that government reforms could lead to the collapse of the annuity market,’ it said.
The article contains quotes from BlackRock president Robert Kapito about the opportunities afforded by pension freedoms in the UK, namely that $25 billion of pension savings were now 'money in motion'.
'We intend to put a lot of effort into putting together more retirement products to capitalise on this market,' Kapito added. If that's not affecting a business I don't know what is.
[I called Acoba to challenge them on this point and was told this morning that the committee will change the wording in its approval letter to Osborne, published online. The letter will now read: 'whilst you were responsible for general policy decisions that would have affected the asset management industry, none of the decisions from your time in office were specific to BlackRock'. I am delighted to have the acknowledgement that his policies did benefit asset managers, but it only strengthens my case that Acoba, or someone, should have challenged the appointment more robustly.]
Steve Groves, former chief executive of Partnership, agreed that Osborne's role in changing pensions had a major impact on the asset manager. He listed a number of other policies for good measure.
'It is not good for confidence in the system when a former chancellor and serving MP who presided over a major change to pensions to the benefit of BlackRock and other asset managers, who oversaw quantitative easing which inflated asset prices and therefore earnings at Black Rock, and managed major public positions in banks whilst institutional bondholders like BlackRock were largely protected is cleared almost immediately to receive large annual fees from them,' he said.
Now this is not to say Acoba is entirely toothless, or that Osborne should necessarily not be able to take a job at BlackRock.
The letter in full, which you can read here, does include requirements that Osborne must abide by at BlackRock. His role is not directly connected to any policy or pension work, but is instead with the BlackRock Investment Institute, which communicates views to investors.
'Osborne will provide perspectives on European politics and policy, Chinese economic reform, and trends such as low yields and longevity and their impact on retirement planning,' the press release announcing his appointment said.
It was also at pains to point out the former chancellor would not be involved in any lobbying of the government.
However, it's hard not to agree with Grove that this all points to something wrong with the system.
'Either Acoba is failing in its duties or more likely it is applying a flawed set of rules which urgently need public scrutiny,' he said.
Osborne often proudly spoke of starting a pensions or saving revolution when he was chancellor. It is disingenuous to not even acknowledge his new employer might have benefited from this upheaval.