So I got an answer to my FOI request! On the 12th of June, National Savings and Investments disclosed some e-mail regarding the Tories’ fake government mailshot. You can get the dump at the link, and read the related meta here. My original blog posts are here and here.
The upshot, as usual with these things, is both less and more interesting than you expected. NS&I certainly was asked for a “fact check and compliance view”, by someone whose name was suppressed, presumably a Treasury SPAD. This referred to a draft text emanating from Osborne’s office (“CX” in the documents). Jane Platt, the NS&I CEO, passed the job to their head of retail, Julian Hynd, who also discussed it with the head of compliance and delivery, whose name is suppressed, and with the assistant director for retail experience, also anonymous, as well as at least one lawyer.
They also discussed it with a mainline Treasury official, whose name is suppressed but whose job title is given in full, as with most of the anonymice, as the Head of Delivery, Debt and Reserves Management, Fiscal Group, HMT. What did they discuss?
Well, some of it was trivial stuff – should it mention that calls might be recorded for training purposes? Should the NS&I phone number and e-mail address appear or just a Web site? Should it refer to “income” given that the codgerbonds don’t pay interest monthly? What about the fact that some of the £10 billion issue would already have been sold? But there was also this.
In the extracts below, [out of scope] marks where the NS&I information officer redacted something and [S40] marks where someone’s name was redacted under Section 40 of the Freedom of Information Act relating to privacy.
1. NS&I Thought The Mailshot Was “Misleading” and “Unclear”
The draft text referred to “pensioners”. In fact, the bonds were sold to anyone over the age of 65, whether or not they were actually in receipt of a pension. It seems pedantic, but it exposed something interesting. NS&I civil servants, specifically Hynd, wanted to strike the reference to pensioners out and substitute “[those] aged 65 and over”.
The letter refers to “pensioners” throughout, when in fact the qualifying criteria to be eligible for the investment is not actually that you are a pensioner, but that you are aged 65 or over. From a regulatory/FCA/clear communications to prospective customers perspective, we believe the reference to “pensioners” should be removed when we talk about the 65+ Bonds – it’s misleading and unclear. We accept that the letter is aimed at how the government has made things better for pensioners, but where the copy is Bond specific we should avoid the “pensioner” references.
2. Regulations Are For The Little People, Aren’t They?
Somebody heavily redacted with no name or job title pushed back, claiming that NS&I didn’t need no stinking regulations.
Can I just check that we are ok in term of FSMA restrictions around financial promotions? Our advice is that this would be exempted because (a) its non-real time communications, and (b) its communicated by and relating to controlled investments issued, or to be issued, inter alia, by governments. Does that match your understanding?
3. NS&I Retail Director Hynd Wasn’t Having That
Hynd stands pat.
To your question, on a) I cannot comment and will ask my compliance team to comment, but on b) that would be my understanding, hence my point was about the reputational risk. We have communicated to customers and the market that NS&I will behave “as if FCA regulated”, i.e. “shadow compliant”.
4. Bureaucracy Rules. NS&I Civil Servants Rally Round Hynd
The NS&I compliance and advice delivery manager then weighs in to support Hynd:
Under the FCA, all providers of financial products, regardless of whether the product is a designated investment, have an over-arching requirement under the TCF principles to ensure that customers are adequately informed before, during and after the point of sale, and that all communications are clear, fair and not misleading. Regardless of what the communication is promoting.
5. NS&I CEO Jane Platt “Proposes” a “Compromise” in “Quotes”
NS&I CEO Platt proposes a compromise, through bursts of redaction. What about “pensioners” in scare quotes?
Thank you for the heads-up [S40]. [Out of scope]Can “pensioner” appear in inverted commas please?
[Out of scope]
The English language groans in pain.
6. Bureaucracy Rules 2: Treasury Officials Back Hynd, While Tories Keep Pushing
Meanwhile, the HMT Head of Delivery, like a good civil service scout, backs up NS&I over the pensioner issue, and also reports that George Osborne’s SPADs want something. Something redacted.
I’ve just got some additional info (and an additional request) from the CX’s spads.
[Out of scope]
But they had one more change that they were going to make to the letter which they wanted to check from a compliance perspective. This was to remove the NS&I phone number and the wording that said that calls may be recorded. I couldn’t see that this would cause a particular compliance issue, but I said that I would check with you. I’m afraid they asked for a response on this in the next half hour.
I’m afraid I lost track of the final version of the letter, as I think [S40] was dealing with this. I think we previously made the point about “pensioners” appearing in inverted commas. I’m happy to make it again though, in the context of the recent press coverage.
7. You Said What?
Then Jane Platt says something really surprising, which also gets heavily redacted:
Thanks [S40]– realise I have not responded to your point on “Pensioner”. Please do make the point again particularly in the light of the press coverage highlighting alienated older women.
[Out of scope]
I don’t know about you but that sounds rather too much like political advice for a civil servant. Or does she mean that the alienated older women are potential buyers? I can’t help but suspect a lot of interesting stuff got redacted here.
8. Chancellor, That’s Illegal
The negotiating back and forth goes on. The HMT Head reports that the Tories reject the inverted commas, and that he considers that the text as it stands is non-compliant (or in other words, illegal).
The phrases in red would not pass compliance in my opinion.
9. Bureaucracy Rules 3: The Bureaucrating
It’s at this point that Platt passes this view on, but also tries to distance NS&I from the project and hints that someone else – i.e. the Treasury – should satisfy themselves they weren’t giving financial advice.
Please note that the letter has not been through our formal sign off process and is not being issued by NS&I. Whoever is issuing the letter will need to be satisfied that it does not constitute giving advice. The text in red is my take on what compliance will have a problem with. I am trying to get a compliance opinion asap.
Trying to push the responsibility onto somebody else isn’t always a cop-out, though. If you know they don’t want it, it’s also a route to getting your way.
The text goes for another swing through the compliance manager and the HMT official, before being accepted in its final form. The final text doesn’t use the scare quotes, and does mention pensioners a lot, but it does refer to “people 65 and over” in a key graf and it tones down “a better return” to “a good return”.
So, we can conclude that: Yes, the text of the mailshot was subjected to a compliance review, although not by the FCA as stated. However, during this process, something which was very likely the Chancellor’s office tried to circumvent the review by claiming immunity from the regulations. Civil servants at NS&I and the Treasury resisted this, successfully.
The Chancellor’s personal staff did this because they wanted a wording that emphasised “pensioners” as the target group. This wording was considered misleading by the NS&I compliance officer and non-compliant with financial regulation – i.e. illegal – by HM Treasury officials, who eventually got it amended, although the changes were pretty minimal.
Despite this creditable resistance, the NS&I CEO also seems to have taken a view on the political presentation involved. This is not the sort of thing civil servants should be doing. It’s possible, however, that the e-mail in question, no.7, has been so mangled by redactions that this impression is false.
This matters, a hell of a lot. Anthony Wells reports back from the polling industry’s inquiry into how they completely failed at the last election:
Opinium identified a couple of specific issues with their methodology that went wrong. One was their age weighting was too crude – they used to weight age using three big groups, with the oldest being 55+. They found that within that group there were too many people who were in their 50s and 60s and not enough in their 70s and beyond, and that the much older group were more Tory. Opinium will be correcting that by using more detailed age weights, with over 75s weighted separately
That is to say, the recipients of the mailshot.