View from City Road: Treasury ambivalence towards the PIA

Andrew Large, chairman of the Securities and Investments Board, needs all the help he can find if the Personal Investment Authority is to get off the ground. So the full might of the Treasury was brought in yesterday to squash a suggestion from Sir Gordon Downey, the PIA's first chairman, that it should be made into a designated agency with its own statutory powers.

Under the present plans the PIA's powers will be at one remove handed down to it by SIB, the senior regulator.

A designated agency would have made it easier to meet the objections of critics such as Prudential and Halifax Building Society. The PIA would also be seen as less a satellite of the SIB and perhaps more convincingly consumerist if it reported directly to the Treasury.

Until yesterday the Treasury had been publicly saying little while privately briefing against the idea of a directly statutory PIA - an ambivalent attitude which made Mr Large's life even more miserable. It encouraged the PIA's enemies to think the Treasury could be pushed into a change of mind if they dug their heels in and refused to join.

The Treasury's public support may end up an irrelevance, however. The debate over the PIA has moved on. Joe Palmer, the chairman who succeeded Sir Gordon, is fighting for his job after a row with the Commons Treasury select committee over 'inadvertently misleading' them about regulatory offences at his old firm, Legal & General. If he is forced out the PIA may never become effective.