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Chris Holmes: Who will save the savers?

Picture_2 Chris Holmes is a solicitor working for an international law firm in the City who is on the list of approved Conservative parliamentary candidates. He is a former Disability Rights Commissioner, is Britain's most successful paralympic swimmer ever and was awarded the MBE for services to sport at the age of 20.

It's a curious thing that, while Gordon is off "saving the world" he appears to have utter disinterest in those who have been saving themselves.

We're in a bit of a global economic situation, there's no doubting that. But when the problem is largely the availability of money, rather than its price, what benefit are the recent cuts in interest rates likely to have? Base rates certainly have a part in any strategy and the Bank of England is independent in any event, but what real benefit is there in 1% rates, particularly in light of LIBOR (London Interbank Offered Rate)?

However, if everything needs to be thrown at the crisis, what harm in slashing the base rate?

Well, ask anyone who is reliant upon their savings to provide them with a decent standard of living - particularly in retirement - which they have been working towards for most of their active lives. All of this Government's (often muddled) efforts on the economic crisis have done everything to discourage individual responsibility, planning ahead and, yes, saving. The riposte of any person on the street may be: "Gordon didn't save for the downturn, so why should we?" - but those who did may well be wondering why they bothered.

Older people are also exposed to a second poisonous strand to this credit crunching cocktail. The latest figures from the Alliance Trust Research Centre show that the over-75s faced an inflation rate of 5.4% in January, 80% higher than the official rate of inflation of 3%. 

What's that, a third strand? Yup, don't look to your occupational pensions for any solace, they took a £5bn year-on-year hit from Mr. Brown from the off - once again, hardly an encouragement to plan for your financial future.

In many ways, pensions personify the current economic problems. Mr. Brown saw huge pots of money which could be skimmed to pay for the New Labour programme. The problem is that these were people's pensions. Yes, they did at that stage have good levels of funding but this was funding to pay people's pensions as and when they retired, designed to last for the long term; in fact, for the entirety of the plan, which would obviously be for decades to come.

Like the UK economy itself, Mr Brown's raid left final salary schemes in no shape to weather the adverse conditions when they came. Lucky the billions he took out of the plans weren't just frittered away then, and now provide the first class public services and support which people require now they are being flung on their uppers.

Well... perhaps not. So, gather round your gas ring, but keep it set low, Gordon's got nothing in his cash bag for you.

So who will save the savers?

Answer: all those who espouse and deliver core Conservative economic realism: that's realism which restores consumer, business and pensioner confidence, realism which rebuilds the savings ratio and, crucially, realism which offers a costed, credible alternative to parlous Gordonomics.

Blame the bankers if you will, they certainly have positioned themselves at the thick end of the wedge, but this only tells part of the story. The leading man of this particular tragedy is Mr. Brown and his "Do do as I do" mantra. That's to everyone out there: borrow, borrow, borrow and spend, spend, spend, match me if you can. 

Poor old Prudence, left without a pension, fuel poverty rattling at her windows, thank God she can get that new plasma telly for a grand and save, um, twenty five quid.

Thirty years on it seems we have to relearn the perpetual truth: all Labour governments always run out of money.  It's high time this one also ran out of power.


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