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Why has it aken so long for this to come out? All of these points were made by City analysts within months after Browns budget. He was initially lucky with the stockmarket booming until March 2000 whch covered the loss to pensions for a while.Since then all those on final salary schemes have paid a very high price for this decision. Worse will follow in the years to come and I pity those men and women in their 20's and 30's who are unlikely to be able to build a decent pensions pot during their working lives with money purchase schemes being the only option available to them.
I would hope that in the coming days, weeks and months Conservative spokesmen will set about Brown and Balls for their less than truthful account of what happened in 1998 and the harm they have done to the pensions of most people subsequently.

Brown hates the English and will impoverish England then walk away with the oil. time for English mp's to come out and rid us of the raj.

There is nothing new here as regards the impact of the abolition of the "Imputation System" (the broader system of collecting Advance Corporation Tax), on exempt bodies i.e. pension funds and charities. People including our leaders made adverse comment on a regular basis from 1997.

What is new is the revelation of internal policy briefings, showing that Brown was warnded of the adverse implications but despite this ploughed ahead.

I don't get how this regulation lark works, but note that the regulators of Equitable Life are being hammered for not doing their job properly, with a recommendation that us EqLife losers be compensated.

Now, would the same not be true of G Brown, moral bankrupt and compulsive meddler, if he knowingly took steps to wreck my pensions, is there not a case that could be worked up in the courts ? And FAST, before he moves house ?

Is there a savvy rottweiler/lawyer out there who wants to use my case as an anybody-but-Brown weapon ?

Get in touch....

Alan Douglas
[email protected]

Oh and since Brown borrows using PFI it is worth pointing out that anyone with a personal pension MUST buy an Annuity before reaching 75 and these rates are 2-3% meaning very low pensions....and the Treasury wants to make sure none of the pension pot can be inherited

The underlying principle of Brown is that people should not be self-reliant, they must be beholden to the state. He is truly an old socialist in that sense.

The changes he made are entirely consistent with his policies on welfare from Child Tax Credit to the Pensioners' Minimum Income Guarantee. You will have what we give you and if you have the temerity to go off and sort yourself out, we will steal your money from you by, variously, punitively high taxes, caps on the maximum you are allowed to save, demands for a second slice of your wealth, even after you're dead.

But that's socialism for you. It is based on the view that people are weak and venal and cannot be trusted. That they must be controlled and directed and that it is better for everybody - rulers exempted of course - to have an equality of misery, than for inequality to exist, even if the worst off are still sufficiently comfortable to get by.

A genuinely liberal philosophy however, is a hopeful one. People can be trusted to organise their lives with a minimum of interference from the state and most will do OK. Those who do not, who have genuine problems, can then be identified and helped properly, allowing them to re-join the ranks of normal society.

This is a self-reinforcing virtuous circle, in tune with people and going with the grain of life, which is competitive and individualistic, but through the magic of the market, produces philanthropy and charity through consensual action in greater measure than can ever be achieved by taxes and redistribution.

Socialism, as has been practised continuously in this country since 1946 in health, housing, education and welfare, is the opposite. It has taken the "principle of least effort" to its sad but logical conclusion, namely, that if people are given things without being required to make any effort themselves, they will accept what they are given, even if it is crap. Thus we have a second rate health service, a third rate education system, truly appalling state owned housing that would not look out of place in 1970's USSR and a welfare system which has bred generations of people who regard their "rights" as more important than any concept of consideration for their neighbours or neighbourhoods.

It should be the mission of the Conservative Party - the only truly "liberal" party left in politics today - to end the socialism inherent in our welfare systems under the guiding principle of "trusting people". That means a healthcare system funded by social insurance for those in work and the state for those not; an education system based on equal grants to parents for every child redeemable at any school; funding of people through a welfare system which encourages work, at a sufficient level for them to acquire housing in the market, not the funding of the capital programmes of those who would build the ghettoes of the future.

Each brick of the socialist wall that we remove will return some power and some responsibility to people. Do that and people may just start to behave responsibly again.

So will a Tory government give high priority to restoring the tax exemption on dividends paid into pension funds? Wasn't it Norman Lamont who started this process, when he restricted the exemption on dividends paid into PEPs to the basic rate, and then later it was removed altogether? Could it not be said that Gordon Brown et al merely followed the appalling example he had set? Which
as I recall one Telegraph commentator correctly described as "The government offered savers a deal, and now it has welshed on it".

Basically we need a radical reform of the taxation of personal savings, which should not involve another set of special schemes but should give each of us
a separate income tax allowance for income from savings and investments,
and allow unused CGT allowances to be rolled forward for use in future years.

But that will never happen because it would be too damn simple, and nobody except the individual who's trying to save wants simplicity - not the politicians (too much revenue lost), not the Inland Revenue (too many jobs lost), and not
the financial services industry (ditto). So between them they'll move heaven and earth to make sure that we carry on with the present shambles to serve their interests, while at the same time lamenting that people aren't saving enough.

Denis Cooper. I can't recall exactly what Norman Lamont did about PEPs but I doubt that is the way you describe. The system of Advance Corporation Tax on dividends was the equivalent of Basic Rate Income tax. The recipient of the dividend was eligible to an equivalent Tax Credit ("TC).If you were a normal taxpayer you could set the TC against your income tax liability; if you were exempt like a pension fund you could claim the TC back. The most that a PEP manager could claim back was the TC, which was the equivalant of the Basic Rate.

Could some one remind us of what Norman Lamont did to Tax Credits in the early 90s, please?

Lamont did start the process but Ken Clarke when advised to do what Brown did refused as he saw the downsides clearly. There is a logic that drives these things, as economists try to remove what they see as distortions to the market.

Ken Clarke was a good Chancellor, probably one of the best - he inherited Lamont's mess and by 1997 had created a strong, healthy economy. One of his stengths was recognising that the reason we have a politician as Chancellor is to bring pragmatism and common sense to the job. The things that made him unsuitable as a leader made him a pretty good Chancellor; arrogance in his own opinion, scepticism of advice and disinterest in his colleagues views.

Actually I believe Norman Lamont was generally a good chancellor too. Ken Clarke was good but he did inherit a legacy from Lamont.

There's a very good,concise, balanced overview of the pensions crisis by Frank Field in the Times

http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article1596955.ece

He does point out that Nigel Lawson's attack on pension fund surpluses was the start of the slippery slope. But Brown has even more to answer for.

Ted @ 10.46:

"The things that made him unsuitable as a leader made him a pretty good Chancellor; arrogance in his own opinion, scepticism of advice and disinterest in his colleagues views".

But who are we talking about here? Ken Clarke - or Gordon Brown?

As John Moss @ 09.04 pointed out, Gordon Brown is an old fashioned socialist and we must never let people forget that.
He is also very devious, as has again been shown by the release last Friday of the information that he had been warned about the effect of his pension reforms; the House was not sitting and he was out of the country at the time.
I hope the tories return to that attack in the next session.

David

Applies to both with difference that Macavity Brown doesn't face down criticism or blames others, Clarke was never "frit" of a good brawl.

Martin, you're right - I was confusing the changes to ACT and dividend tax credits with the restriction of mortgage interest relief and the married couple's allowance.

What Lamont in his 1993 spring budget is summarised here:

http://www.ifs.org.uk/ff/budget_measures.xls

"Advance corporation tax (ACT) rate reduced to 22.5% from April 1993 and to 20% from April 1994.
Dividend ‘tax credit’ down to 20%.
Basic rate of tax on dividends reduced to 20%."

Later that 20% was reduced to 10%, and then that disappeared altogether from April 2004.

I think this is potentially the most damaging issue for Brown at the next election. Someone needs to ask what Brown's pension was worth 97/98 and what it will be worth 07/08 and compare that to the national average and bill-board the result. Something like "If you want to save your pension, give him have his now."

I think a nice poster with Gordon Brown scowling down like Big Brother (1984) and the quotation from Kinnock...

I warn you not to be ordinary, I warn you not to be young, I warn you not to fall ill, and I warn you not to grow old.

with Schools, Health, Pensions .....and Brown

In the light of Ed Balls remarks today on Lamont and Cameron I asked my husband, a retired Senior Partner of a major Accountancy firm, who ran such a fund, to comment. This was his explanation and I thought it worth sharing.
These remarks apply to company pension schemes. The trustees of the fund have two matters to consider. The first is that when the pension fund is approved an actuarial valuation is made of all the prospective participants based on their age, sex, length of service, and estimated death or retirement date. It is to this fund that companies make payments and if on a subsequent valuation there is a surplus in the fund this surplus may be withdrawn (the Lamont effect). The second fund that the trustees must consider is that of income and expenditure, the income comprising dividends and interests together with the appropriate tax credits from which must be deducted the expenses of the trust plus the pension payable. It is obvious therefore that should this income fund be depleted by the withdrawal of the tax credit the Trustees of the fund will no longer purchase investments on the stock exchange. The obvious result of this is a severe fall in stock exchange values as well as a diminishing of the funds itself. It is not the case that Brown, according to Ed Balls, is only doing what Lamont did, this is not the case because Lamont’s action did not reduce the income and the ability to pay pensions whereas Brown reduced the income. To clarify it a bit more, the Lamont withdrawal did not affect the daily running of the pension fund but would only have had an effect on the winding up of the fund.

Absolutely excellent suggestion, TomTom at 14:25

"I warn you not to be ordinary, I warn you not to be young, I warn you not to fall ill, and I warn you not to grow old" -Neil Kinnock.

and relate the quotation to Schools, Health, Pension .....and Brown.

The trouble with a party that lives by soundbites is the probability that they can be turned against them later:

"Only 24 hours to save the NHS", "The NHS is not safe in their hands", "Education, Education, Education" and "Tough on crime, tough on the causes of crime".

I also think we could re-use the old tory advertising slogan "Labour isn't working" but just add "- again".

I am not sure why an inquiry would help. The best case for Brown is that given the advice of Civil Servants to end a tax credit (they are always doing that) Brown and Balls were not very bothered by the potential risk to PRIVATE pensions. Or, unlike Clarke, too incompetent to see the risks.

The worst case is that Brown deliberately set about damaging private pensions. The new documents would seem, clearly, to indicate the worst case being the facts.

Surely we must now look at things in this light. Obviously, the idea would be that more people need state handouts and submit to means tests - and vote Labour. The reduction in money to the stock exchange has made British firms cheap and more likely to be taken over. The reduction in income to pensioners puts more of them below the income of people with children thus helping with statistics puporting to lift children out of poverty.

Finally will the Conservative party leadership, finally, come to recognise how utterly disgusting, not just incompetent, this government is and start saying so? (Ed Balls with no straw for his bricks provides an example of the sort of language the facts require.)

@David Belchamber
Actually that's very good. Posters with the 1997 soundbite in the top left and an appropriate graphic +/- statistic 2007 in bottom right and a strap line - 10yrs of Labour failure or 10 yrs hard Labour or similar or Conservatives - Action not Words.
People are really disappointed by Blair; that needs to be played on.
The campaign needs to start early in case Brown goes early during his honeymoon. I have heard from a TV political editor that there is definitely going to be a 100 days political firework display from Brown

I fully agree with your last paragraph David. Conservative spokesmen are without exception too damned reasonable these days. They should sometimes reflect some of the anger and bitterness at the behaviour of this government felt by so many today. This issue is very appropiate for that.

Jonathan @ 17.48:

I am sure that what you predict will happen:
"I have heard from a TV political editor that there is definitely going to be a 100 days political firework display from Brown".

Again, I think we can turn that against him, because he and Blair have run the show for 10 years and therefore everything that has gone badly in that time - from the Iraq war to largely closing down the NHS from January to the end of March - has got Brown's fingerprints on it.
If it is more of the same - but with more focus and energy - then the tories have to point clearly to a better way of doing things.
Unfortunately, if Miliband runs and wins, we might have more of a fight on our hands.

David, do you really think so? To me, Miliband has an inner insecurity that would prevent him from throwing his hat in the ring.

Annabel @ 23.20
I don't really know enough about Miliband yet, so we will have to wait just a little longer to see what he decides to do.
In his place, I would not stand this time but let Brown get in and hope that Brown loses the next election comprehensively, so Miliband can come to the aid of his party in opposition. He has time on his side.
But I do feel he comes over quite well on TV and I get the feeling that Defra is no longer such a shambles.
The main thing though that contrasts him sharply with Brown is that he has got a reasonably clean pair of hands and can produce the sort of policies he is already hinting at (i.e. quite different from Blair's) without our being able to label him as a hypocrite (unlike Brown if he tries the same thing).

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