Monday, 2 April 2007

Jeff Randall outs himself as a twassock

More guff in today's Telegraph about the impact of the abolition of dividend tax credits in 1997. Lumbering in comes Alan Sugar Mini-Me Jeff Randall. As I posted over the weekend, if you read the Treasury documents released on Friday you can see that the Treasury outlined a range of possible scenarios, some of which have clearly not come to pass. However the Telegraph editorial line on this is clearly 'go for the worst possible interpretation', and our Jeff doesn't disappoint.

It's true that the Chancellor is not solely to blame for the unravelling of our retirement schemes. In the 1980s and 1990s, many companies were so complacent about funds being in surplus that they took "pensions holidays": they simply stopped paying in. That action now looks almost criminally negligent.

A sharp rise in life expectancy has also played a part. The longer that pensioners hang around, drawing from the pot, the harder it is for funds to be confident about meeting future obligations.

But all that pales alongside the Chancellor's decision to pay for his profligate spending spree on unreformed public services in part with the money of millions of pensioners.

Yeah maybe employers cutting contributions had an impact, yeah maybe people living longer than the actuaries had accounted for in their calculations matters a bit. But it's really Brown's fault...

No figures on all of this you notice. It would be interesting, for example, to see the comparative impact on a typical scheme of the abolition of tax credits versus changes to mortality assumptions. You might also want to have a look at the actual cost of the tax change compared to the value of contributions holidays taken by companies.

Let's make no bones about it, this is an attempt by the Right to try and pin the pensions crisis on Brown. It's factually flawed and can be proven to be so but unless people start making noise about it the simplistic "Brown killed the pension funds" version will become the popular wisdom.

1 comment:

Charles Pooter said...

You are quite right that the "pensions holidays" (a disgusting phrase for corporate ineptitude) taken by companies has been a major contibutory factor to the pensions crisis, but the Goverment's constant faffing around with pensions (including the Brown tax grab, and it was a sneaky tax grab, however you try to spin it) hardly helps create a stable framework in which people can make long-term plans. This isn't about left and right, it is about Governments and corporations messing with people's retirements.