George Osborne piles the pressure on Gordon Brown over pensions

George Osborne has press released five questions that Gordon Brown must answer regarding his 1997 decision to abolish dividend tax relief on pensions:

1. "In 1997, why did he not clearly state the risk he was taking by abolishing dividend tax relief on pensions, in spite of the warning it would cost pension funds £75bn?
2. Estimates for the damage done to pension funds put the final cost at around £100bn. What is his estimate?
3. Did the Chancellor overrule opposition from the Prime Minister's office to force through his decision, as the Prime Minister’s then Economic Adviser Derek Scott has implied when he told the Telegraph “he (Blair) took the view not to go up against Gordon”?
4. Can he explain why today he described the move as “the right decision for investment” when his own officials said at the time “the view of the economists is that overall the reform would be broadly neutral in terms of the amount of investment.”
5. Why did the Treasury refuse to release the pension tax documents for almost two years and, when this position became untenable, finally release them late on a Friday afternoon, just before Parliamentary recess and just as the Chancellor was leaving the country?"

Comments

[Andrew Woodman]

This is all very good, but it doesn't really mean anything until we show the merest sign that we're going to do something about the pensions mess, however small.

[Craig Barrett]

Should not question 2 read £100bn?

[Gordon]

Answer:

1. We won by a landslide in '97 and we could do whatever we wanted. You lot were too shell shocked to be an effective opposition.

2. Surely £100m?????

3. No - don't believe everything the PM's office tells you.

4. because investement has gone up!!!!

5. To bury bad news. wouldn't you have done the same?

[Editor]

Yes, Question 2 should be billion, not million.

[Steve]

Andrew is right. We must have some answer or solution to maximise the impact. Frankly we should be able to find £5bn per year to reverse this tax.

[Editor]

PS I've amended the text.

[malcolm]

Hear, hear Andrew Woodman, or should I say as you most elequently put it, 'ere,'ere!

[lunchtime o'booze]

question 6. Why has Ed Balls lied his head off trying to blame the pensions grab on the CBI?

[TomTom]

Surely the British Stock Market has been a poor performer since 1998 and British companies have been cheap to acquire for Spanish and German companies.

We used to have electricity companies on the Stock Market, Telecoms, Industrials, Retailers, etc.

By crashing share prices by taxing pension fund substance, there are fewer quoted companies for people to invest in.

Brown has made money for hid friends but robbed the general public. Labor has looked after the Few at the expense of The Many......exactly the opposite of what it pledged in 1997

[Umbrella man]

Good addition lunchtime!!!

[Andrew Woodman]

That's my midlands accent in text form Malcolm :).

It's going to be interesting to see how this plays during their leadership election/coronation. Brown will have to address it, and any appearence in the media by the over zealous sixth form debater Ed Balls is a bonus for us.

[Mark Wadsworth]

All these pension schemes are a huge scam to benefit the pensions "industry"; advisors, insurance companies, accoutants, trustees, actuaries and so on.

The economy as a whole would function better if people had higher salaries to invest, pay off mortgages, save, spend or waste as they please.

In economic terms, final salary and defined contribution pension schemes are complete nonsense. Tax breaks? What tax breaks? Who pays the tax to fund the tax breaks? We all do, that's who!

What we have ended up with is the end of the shareholder culture (most shares are held by institutions and pension funds) and a big fat bureaucracy, which creams off £10bn or so a year in management charges, twice as much as the £5bn "raid".

I must say though, it is heartening to see the Press turn on the Goblin King with such malice.

[William Norton]

Mark Wadsworth: The economy as a whole would function better if people had higher salaries to invest, pay off mortgages, save, spend or waste as they please.

I take it that you actually meant 'higher after-tax salaries for the same quantity of work provided'. Strictly, if you say doubled the nominal salary paid to everyone you'd probably trigger a spiral of inflation which settled down eventually with money at half its value (give or take). The broad point, that in narrow economic terms taxation is wasteful, is undeniable. The question is whether there is some "social good" provided out of taxation which recompenses for this waste.

In economic terms, final salary and defined contribution pension schemes are complete nonsense.

That's rather heroic. I'm not a fan of defioned benefit pension schemes because, in effect, they treat retirement as a form of continuing employment and are tantamount to a job-for-life concept which is (a) feudal; (b) totally unrepresentative of the actual jobs market; (c) penalise current employees and transfer their productivity to unproductive retirees; (d) horribly expensive. You can also argue that employer-funded pensions are a drag on the flexibility of the labour market and that 'everyone' would be better off with the money paid as salary but the tax system doesn't quite work that way.

What we have ended up with is the end of the shareholder culture (most shares are held by institutions and pension funds) and a big fat bureaucracy, which creams off £10bn or so a year in management charges, twice as much as the £5bn "raid".

I'm not sure, hand on heart, you want everyone investing their life savings on risk in the stock market. Ironically, it is actually better for the less well off to pool such investments through pension funds (on the insurance principle). The more interesting question is whether there is really any merit in a specialised form of investment called a pension, which gets special tax breaks on the way in and is subject to special restrictions on the way out. That has largely arisen for historical reasons to do with anti-tax avoidance.

[Tapestry]

Gordon Brown has interfered with all aspects of pension provision when he could have left it all alone, as it was all going well.

Not only was the money flowing into pension funds syphoned off into taxes, but the assets - the share values - were hit as a result, creating a double loss for savers.

The resulting shortfall in pension funds was pounced on by Gordon Brown, and he had the audacity to blame the pension funds for investing in equities, forcing the companies to sell yet more of them into a depressed market, driving down share prices further, making them move their funds into government debt which of course rose in value making it easier for him to raise money for his own needs.

Over the long run equities if not interfered with or overtaxed create far more wealth than government debt. But not in dear old Gordon Brown's book.

Brown forced the companies with pension shortfalls to pare down their deficits immediately from profits rather than waiting for share rices to recover. This depressed levels of investment for most of Britain's large company sector for a period of years.

This has bombed Britain's growth rate, lowered our productivity, sagged government tax take...and yet still most people's pensions are half or less than what they might have received if Brown had kept his idiotic ideas to himself. If he doesn't understand investment and how the orivate sector works he shouldn't be tampering with it.

Brown has created a lose lose situation for Britain getting his business management of our economy wrong at every turn.

If people find it hard to follow the gross stupidity of every move Brown has made on pensions, tax and investment, they might check out their own tax positions, and see that their wealth level is falling away, and their pensions are worth half or less of what they once were.

Brown will be seen as the biggest waster of resources in Britain's history.

It is not often that one man is enabled to do so much financial damage to so many millions of people for so long without something being done to stop it. But this has been the price Britain has paid for the Blair Brown game of oneupmanship, which has defined our economy and our culture for so long.

Brown must not be Prime Minister. He must be got rid of by Labour, or Brown's disasterous mishandling of our affairs and the media cover up he's enjoyed for a decade will roll on reducing millions more people into poverty. He's a pathetic little ego who cannot stand the idea of individuals being able to accumulate wealth through saving and hard work. He wants the whole country to be a complete failure just like him, and all become dependent on his grubby little handouts.

[William Norton]

Tapestry: For once, you can't actually blame Gordon Brown for FRS17. If companies were 'forced' to report liabilities then that was because the liabilities existed. Better to have them going through the books now than wait until you retire and discover that your employer has just gone bust. (NB: that's why companies are required to publish their accounts, and the idea is that the accounts are supposed to give a true and fair view of the company's financial position.)

[Tapestry]

It's all about markets William. Brown obliged Britain's top companies to close their pension fund shortfalls created by the fall in prices, and the taxes they were forced to pay by Brown, immediately.

Had he given them elbow room, and obliged the shortfalls to be addressed over the economic cycle (where've I heard that one before?!), a lot fewer shares would have been sold at the bottom of the market, and far less of 'this year's' investment money would have been sucked into pension funding.

But as we know Brown loves assets to be sold at a loss (see his gold dealings) and he hates to invest money well, or see others doing so. His strategy seems to be to eliminate private provision and replace it with state provision, coming from current taxation. The more money he can force people to lose the happier he seems to be.

[TaxCutter]

Here's a few more questions for Gordon. How about:

1. How come you forgot to put this tax rise in your 1997 General Election manifesto? Or your 2001 or 2005 manifestos too?

2. In 1997, 43.7% percent of UK equities were held by UK Pension Funds and Life Assurance companies in 1997, mostly on behalf of typical pensioners and policyholders? By 2004, the last date available on the Office for National Statistics website, this percentage had reduced to 32%. Was this what you intended?

3. Your "spare brain" Ed Balls has recently complained about the high gearing of private equity groups. Given ending the Pension Tax Credit increased the post-tax cost of equity, hence making the alternative of financing via debt more attractive, do you think he should spend some time understanding the implications of the policies he himself advised upon?

[TomTom]

Tapestry: For once, you can't actually blame Gordon Brown for FRS17

No we can blame Sir David Tweedie for trying to crystallise long-term liabilities. it is so bizarre.

US Corporations book the increase in a notional yield on pension fund assets into their P&L. Germany companies have unfunded pension liabilities usually tied up in the assets of the business.

Yet the one country with a clean set of pension funds in the corporate sector was forced to meet a standard no other country had implemented.

It is so bizarre. How many people could pay off their mortgage on any one day....should everyone calculate their daily net worth and discover they cannot discharge their mortgage immediately ?

[TomTom]

do you think he should spend some time understanding the implications of the policies he himself advised upon?

I suspect Ed Balls is theoretical and devoid of practical exposure - he probably thought Modigliani-Miller had the ultimate answer

[Mark Wadsworth]

William 17.01, thanks

1. The cost of tax breaks for pension funds is enormous, if you scrap it you can get rid of higher rate tax completely and increase the personal allowance by a couple of grand. You do not make society richer by allowing huge bureaucracies (pensions industry and DWP) to grow and shoving money round in a circle. You do it with low simple taxes and small government.

2. You appear to agree on the second point.

3. How is a pension fund less risky than investing directly? What about the risk of falling annuity rates and shambles like Equitable Life, Robert Maxwell and the like? If people have to invest on their own account they might prefer to pay off their mortgages first (the best and least risky investment) or stick to cash or whatever. That's up to people to decide for themselves.

[Mark Wadsworth]

Another point, UK plc and their colelctive pension trustees are idiots.

They should have just replaced shares with bonds. Their pension funds could have bought the bonds. UK plc gets a tax deduction for raising money with bonds (replacing a latent with an actual liability) and paying the cash over to the pension funds, who pay it back to UK plc in exchange for the bonds.

The pension funds would receive the interest truly tax-free, and the smaller number of shares that they own would rocket in value. The capital gains that pension funds make are also tax free.

[Mike A]

A few thoughts:

The £100bn question is a stupid one - everyone in this field knows the real figure is pitifully smaller than that.

The £100bn forecasts are dismal, and George Osborne should know that. Brown's actions regarding pensions have been bad (increasing means testing and the increase on taxation on funds), but as Stephen Yeo says, they're not even in the top three reasons why this has happened.

[Londoner]

Mark

Whilst there may conceivably be a properly argued article (or even book) in your theme of the idiocies of pensions, UK plc boards and all pension fund trustees, your flip postings on here look more like rantings.

By giving tax relief on pension contributions, you make income tax nearer a consumption tax than an earnings tax, which is better. You also encourage people to provide for their old age, which is in the State's interest as each person with a decent private pension is one less on means tested State benefits. Finally, the very fact that most employees take the default option in, say, money purchase pension funds provided by their employers, even when given a choice, shows that if you leave it to people's unfettered choice between spending, savings etc, without any steer from the tax system, you will probably have even more old age poverty than now. And if you adopt your scheme of gearing up to the hilt all plc's for tax reasons, then you'll land up with a lot more insolvent companies (quite apart from the logical flaw, I think, that paying back all that equity to shareholders would be treated like dividends for tax purposes).

There are many things that are too inflexible about pensions as presently regulated, but getting tax relief on contributions is not one of them.

Please don't promote this idea or you'll be giving Gordon his next big idea to further mess up any possibility of self-sufficiency in old age.

[David Belchamber]

How I agree with you, TomTom @ 17.43:

"I suspect Ed Balls is theoretical and devoid of practical exposure".

I have hardly heard anything from that man that I believe to be factually true but I do believe that much of the problem with Nulab generally is that few of them possess any experience in actually running a business. As Goethe pointed out: "All theory is grey" (though he said it in German).

Monday's Telegraph carried another blistering attack by Jeff Randall on Brown's pension debacle (maybe Osborne should ask Jeff R to script his speeches) but it is the correspondence on the subject that is most illuminating.

There are four excellent letters on the part that Brown and the Treasury played in helping to ruin the pensions industry.

One was from a businessman who attended a meeting of businessmen from engineering companies with two senior Treasury civil servants, soon after the 1997 budget. He pointed out that the true overall cost of labour used to account for 36% of the company's annual expenditure but that the increased pension costs resulting from the budget had increased overheads to 41%, which would lead to loss of competiveness and ultimately jobs.

Neither of the civil servants had had any industrial experience and expressed surprise at the link between increased pension costs and loss of jobs.

[Oberon Houston]

Mmm, I’m not sure George is “piling on the pressure”. Better to cast this as a lead-cased sound-bite and throw it at Brown for ever more, see how he likes it.

Actually Paxman asked much the same to Geoffrey Robinson, the former paymaster general, last night, who was of course defending the policy. Poor old Philip Hammond didn’t really pin him properly, never mind, Paxman is always more interested in looking smug on the telly than allowing an interesting disagreement to flourish.

But! If you want to liven up this story, lets talks about Robinson for a moment (bear with me my friends, it's worth it). Along with Ed Balls, Robinson was one of Brown’s original inner circle. Yes, Geoffrey Robinson, that wealthy upstanding tax paying, millionaire businessman, close confidant, rich, generous friend of Brown and… yup therefore treasury minister before you could say 'Brown's top dog'. Well, that was until it was exposed by Chris Blackhurst, working for the Independent on Sunday that he wasn’t exactly a good old honest tax payer after all. Even when he was working as the paymaster general, our Mr Robinson was using a secret trust registered in Guernsey called Orion to hold shares in his engineering company ‘TransTec’. Why the complex arrangement? Why tax avoidance of course! And he was even continuing to advise the offshore trustees about share transactions financed by funds he was transferring from a bank account in Switzerland whilst working in the treasury as paymaster general (oh oh).

Gordon Brown, 1996 party conference:

“A Labour chancellor will not permit tax relief to millionaires in offshore tax havens.”

ho ho ho,… well that unless that millionaire with a secret offshore tax haven lavishes hospitality and pays for hundreds of thousands of pounds of research for you. In the words of Tom Bower,

“For the chancellor who had mouthed ‘Tory sleaze’ countless times to have accepted champagne, lobsters and accommodation financed by a secret tax haven was more than ironic."

What a shower honestly.

[Mark Wadsworth]

Londoner...

"Whilst there may conceivably be a properly argued article (or even book) in your theme of the idiocies of pensions, UK plc boards and all pension fund trustees, your flip postings on here look more like rantings".

> I could write a book, but nobody would read it and I can't be bothered.

"By giving tax relief on pension contributions, you make income tax nearer a consumption tax than an earnings tax, which is better"

> One man's earnings is another man's consumption, there is no real difference, especially in a service economy (VAT is far more damaging than income tax anyway).

"You also encourage people to provide for their old age"

> some people are rich and/or sensible and will save anyway. There is no need to subsidise this via higher taxes. Some people have low incomes and/or squander everything, you can't help them with tax breaks and higher taxes. Some people are borderline, OK, tax breaks might just be enough to tip them over the edge from squandering to saving, but they are far and few between and the deadweight costs of this marginal extra saving are ENORMOUS.

"... which is in the State's interest as each person with a decent private pension is one less on means tested State benefits."

Hang about here, I am in favour of a Citizen's Pension; a fixed (albeit low) State-guaranteed income from a certain age for all people who have been legally resident here for quite a long time. Above and beyond that it should be every man for himself. If you have savings, you get Citizen's Pension plus your savings income. This means-tested Pensions Credit actually DISCOURAGES lower earners from saving, do away with it, say I.

[Richard Carey]

The completion of Conservative tax policy in this case is secondary to nailing McCavity Brown to the wall on this one. Let’s get the job done on that first. Then, as we’re not going to have the ability to reverse any of Brown’s screw-ups until after an election, take the time to work out intelligently how to do this and present it as part of a coherent tax policy. As Phillip Hammond said last night, Gordon has not just left this sitting in a jar on the shelf for us to drop back in to people’s pension funds (minus returns).

I agree with posters above that the £100bn might not be an accurate figure – the other figures I’ve seen around today have been about £75bn, and I’m still mad as hell, so the odd £25bn obviously doesn’t matter that much politically!! I had to laugh at Toynbee’s attempts to say the “£5bn [per annum compounded] is negligible compared to the £250bn losses caused by stock market movements”. The omission of the fact that it was a per annum figure was as revealing as her dismissal of the fact that Brown’s raid has been amplified by coming when the funds are already having a bad time.

But the real thing that we need to keep pushing about “Fingers” Brown is his arrogant insistence that this was the right thing to do. Brown saw these assets sitting there, generating returns for those who were saving for their retirement, and against the advice of his officials decided to dip in.

I wonder between now and the next GE how many ways I can find to express the message “that wasn’t your money, Gordon, it was the British people’s!” Brown as a naughty boy in a sweet shop, unable to resist dipping his hand in the jars, perhaps? So many images, so many angles to attack…

[Richard Carey]

Brown as a naughty boy in a sweet shop, unable to resist dipping his hand in the jars, perhaps?

Actually (apologies for the extra post) I wish I hadn't just written that - given Brown's now well-documented personal habits, the thought's made me feel rather queasy. Gobstopper, anyone?

[Annabel Herriott]

I know sweet FA about economics, but I do know about people. Ed Balls is in a cold sweat right now. Of course he is lying and panicking. He will be seat less come the next General Election,come the boundary review, unless some kind soul in a safe Nulab seat is prepared to stand down for him. That will mean a peerage for him/her at the very least! That sort of insecurity makes idiots of Balls like folk.

[Annabel Herriott]

No thanks Richard, I'll just have the Bogie pie.

[Alan Douglas]

I think it essential that the Conservatives reverse the pensions grab, but also see the financial problem re taxes needed.

I would like us to promise to reduce the problem over the term of the parliament, by reducing the grab by 20 % p.a., thus handling both problems at once.

Alan Douglas

[Richard Carey]

That sort of insecurity makes idiots of Balls like folk.

I love the way that Guido calls him "Blinky"!

[malcolm]

We will only nail Brown properly Richard by having a coherent pension policy. Without it we will be wide open to the question 'well,what would you do now?'.
Being slippery ourselves is absolutely not the right way to go.
Very good thread this overall. Best discussion I've seen on CH for a while.

[TomTom]

Polly Barmpot is getting shredded on the Comment Section of today's Guardian for her innumeracy and sheer propagandist tones for her friend Gordo Brown......she is actually remarkably stupid...couldn't the Guardian replace her with an intelligent woman ?

[ToMtom]

How is a pension fund less risky than investing directly?

It is called Portfolio Theory or Law of Averages. In the Victorian Era they created Open-End Funds called Investment Trusts of which GLOBE was the biggest. In the early days pension funds invested in these trusts to get exposure to a portfolio.

Globe was founded to fund the transatlantic cables to the USA then after they were nationalised by Disraeli, diversified into railways in the USA and South America and other places to bring in the 3% yield rentiers needed.

The Insurers found they could make money from closed-End Funds called Unit Trusts where they could rig the Bid/Offer prices and then bundle them with Life Insurance.

It was deemed provident that people should be able to save for old age and death so these insurance funds were tax-exempt. The Equitable was the first life insurer and Scottish Widows not far behind; they were true mutuals until mutuality became destroyed post-WWII with ownership divorced from membership in the minds of management.

The subsidy to pension funds in terms of tax reveneue foregone was around £15 bn I thought, but then again lots of mortgages are interest only hoping either a Pension Fund tax-free lump sum or endowment payoff will clear the principal of the balloon mortgage.

Can anyone afford a house now on a repayment mortgage ?

[Mark Wadsworth]

Tom Tom 8.31
"The subsidy to pension funds in terms of tax reveneue foregone was around £15 bn I thought"

Total pensions subsidies are about £45bn per annum (tax relief for contributions, contracting out reabtes, NI exemptions and tax exemptions for pension funds).

Total basic state pension is also around £45bn per annum.

Extra cost of scrapping basic state pension and pensions credit, and replacing them with a flat £114 per week would be £5bn or £10bn (depending on pension age and what other old-age related benefits you scrap as well)

[ToMTom]

Actually the tax take will be higher as people choose not to save in pensions at all but to consume and let the State take care of things. After all with divorce splitting the pension pot the best strategy is to live with a huge mortgage as a for of lifetime rental, die in debt and have no assets for means-testing or splitting on divorce.

[Londoner]

"The Insurers found they could make money from closed-End Funds called Unit Trusts" - TomTom, you mean open ended. There may have been some abuses but the early days of unit trusts (M & G and Save & Prosper) greatly extended the pool of middle income people with exposure to stock market growth - Investment Trusts, although still my preference, require a stockbroker. I do feel that this semi-paronoid strain that everything the financial services industry does is a rip-off is unfortunate (yes, I am connected with that industry if you must ask, but it also happens to be one of the most successful and worldbeating sectors of our economy).

"Can anyone afford a house now on a repayment mortgage ?" Well, er, yes. Any other way in an age of positive real interest rates is pretty daft. Anyone taking out an endowment mortgage since the tax relief was abolished in about 1986 is misguided (if you want to knock endowments, knock away). ISAs with an interest only mortgage are a viable option for a higher rate tax payer with not too large a mortgage but in terms of cash flow they cost more at least until you start realising the ISA profits. If you wish to live in the same house into retirement, it seems to me a very sensible financial priority to have paid off your mortgage by the time you retire. Frankly, those pensioners who complain about Council Tax when they are still paying a mortgage out of their pensions have themselves at least partly to blame.

Of course it helps if you inherit some money along the way - but if everyone takes your advice, TomTom, no-one would, as inheritance often depends on the previous generation paying off their mortgages in their higher earning years. Finally, a great advantage of paying down your mortgage when you can is that you then have more scope for increasing the borrowing at other times when you need the money. Mine has gone up and down, but with a firmly downward overall trend. I would recommend it.

Here endeth the financial planning lesson.

[Londoner]

I know I can't spell paranoid but please don't get at me about it.

[TomTOm]

Londoner, can anyone outside financial "services" afford to buy a house on the market today without capital ?

As for I do feel that this semi-paronoid strain that everything the financial services industry does is a rip-off is unfortunate

Unfortunate but true. If financial "services" were not so well-protected by the government as it is and had to be as thorough as manufacturers of goods or medics or pharmaceutical manufacturers, it would be a very much more modest affair.

Insider trading is still a good source of extra income as is churning.

The most incompetent end of financial services is insurance, and the third-rate idiots who ran places like Equitable Life Mr Sclater and engaged in activity which should have seen them struck off under The Insolvency Act.

There are far too few prosecutions for financial fraud in this country, the Americans have a much more practical approach whereas Britain is rather too relaxed.

My point was that with pension splitting and highly capricious diorce judgments in this country coupled with expropriation through IHT this society is better off wallowing in debt. My answer ws in response to Mark Wadsworth who wanted all tax relief abolished on savings

[William Norton]

Tom Tom: correct me if I'm wrong, but your revolutionary approach to avoid paying tax is to have no money. Starvation is also noted as an excellent cure for obesity.

[Londoner]

"Londoner, can anyone outside financial "services" afford to buy a house on the market today without capital ?"

TomTom, if that is so, surely that is all the more of an argument for trying to build up capital. You can always give it to your children to buy their first flat and keep it away from the taxman and the divorce courts that way. Choosing to wallow in debt (which incidentally your hated financial sector makes lots of money out of too) just compounds the problem, particularly if you get divorced actually as you are then likely to land up with nowhere to live except a bedsit.

It may be unrealistic to expect people to be able to afford prime property in the south east on a mortgage. It is also grossly irresponsible for professional people to leave their children and grandchildren without any capital. With top rate tax at 41% instead of 83%/98%, this middle aged generation actually has a much better chance of passing on decent amounts of capital than our parents. Which is why Inheritance Tax is now an issue with political traction.

I know it was Mark who started this wanting to abolish pension tax relief, but you compounded it by advocating fecklessness!! That you are both such knowledgeable fellows makes this all the more necessary to attack, lest others conclude you are talking sense.

[Mark Wadsworth]

Londoner, I recommended abolishing tax relief for pensions and use this to fund massive tax cuts, see posts above.

Also, I bear no malice to the City in general (quite the opposite). I have always said that we should scrap Stamp Duty and exempt foreign source income from UK tax. This is not particularly radical, plenty of other European countries have neither Stamp Duty nor tax on foreign source income.

Fair enough?

[David Sergeant]

All this technical stuff is all very well but, it seems, Tories still don't get it and still live with the polite politics of the 1940s. A fundemental reason for Brown's pension raid is because they are PRIVATE pensions.

Osbourne, and contributers to here go on about Civil Servants advice - it's a start but no more. We are often told there is hardly any difference between the parties (have you noticed the many convoluted attempts to also blame the Tories for Brown's raid). Well Brown has just demonstrated there bloody well is a big difference - the trouble is the Tories are so busy getting reasonable and technical they don't seem to have bothered to notice. And if they don't electors won't either.