In all the froth and spin this betrayal of our people by the “next” prime minister must never be forgotten. Gordon Brown and his ‘sidekick’ Ed Balls have ruined the old age of those who had relied on the sanctity of government promises to save for their retirement . THOSE SAVINGS HAVE BEEN STOLEN.
Remember too that the government did everything possible to conceal what had happened and it was only wrung out of them by force.
(The emphases are mine)
Sunday Telegraph 1/4/07
So Gordon didn't know the damage he'd do? That's Balls
By Patience Wheatcroft
Ed Balls was at Gordon Brown's side as he determined a policy that would impoverish millions of pension holders. Yesterday, he was insistent that the advice the Chancellor received before changing the pension tax regime in his first Budget was that the moves he planned would, in the medium term, be beneficial to pension funds.
Yet that is not easily deduced from the documentation that is now available. There are repeated warnings that the cost to funds could amount to at least £3.3 billion a year and possibly much more. One note, dated May 15, 1997, from the Financial Institutions Division, suggests that the planned changes might reduce the value of pension fund assets by as much as £50 billion at a stroke. "This shortfall will have to be made good," it states. Even if the pain of making up that loss were spread over 10 to 15 years, that would have meant the funds finding an extra £4.5 to £5.5 billion a year.
Loyal Mr Balls might be able to find some advice that was delivered to the Treasury saying that, at some stage in the future, the results of the hoped-for increased investment by business, which was the cloak of respectability with which Mr Brown disguised his raid on the pension funds, might have a positive effect on their value but it takes true determination to be able to plough through the newly-released papers without feeling that the Chancellor should have had little doubt about the risks he was taking with the nation's pensions when he stripped them of the dividend tax credit.
The fact that, for two years, the Treasury has fought against making the advice public does foster suspicions that the Chancellor knew he would not emerge well from the exercise. The argument used in favour of keeping the documentation under wraps was specious in the extreme.
To have published the advice would, argued the Treasury, "prejudice ongoing full and frank disclosure to ministers". If that reasoning had been upheld, it would have provided a line to be trotted out by anyone in Government who wanted to keep information out of the public domain. But when the Information Commissioner brushed aside this pathetic attempted cover-up, the Treasury was so determined to keep Mr Brown's guilty secret that it launched an appeal.
But, while there may be ministers who see the introduction of the Freedom of Information Act as a slip-up by a Government generally opposed to transparency, it is, for now at least, on the statute books. So when realisation finally dawned on the Treasury that the details of the advice would be prised out eventually, it acted true to form: the information was released on a Friday night just as Parliament was going off on holiday and when attention was focused on a hostage crisis in Iran. A better day than most on which to bury bad news.
Yet even though the majority of people will have no appetite to read the detailed actuarial advice that was produced 10 years ago, they may not be inclined to settle for Ed Balls' brush-off of the allegations now being levelled against the Chancellor. The Conservatives are planning to demand a full scale inquiry into the issue, probably to be conducted by the National Audit Office.
There is no need to wait for the results of that, however, to be sure that a pensions system which was once exemplary is now in melt-down. When the Blair government took office, 90 per cent of people who were in occupational pension schemes were looking forward to retirement on a defined benefit which would be directly related to their salary. That proportion has now fallen to less than a tenth and is continuing to slide. Now most pension schemes are defined contribution rather than defined benefit, the income they will generate being dependent on the markets.
Faced with making up that multi-billion pound shortfall of which Mr Brown was warned, companies have been forced to increase their contributions to the funds, thus depriving shareholders, mainly other pension funds, of income, thus exacerbating the problem. Funds have been closed, benefits cut and misery abounds.
If this was merely an incidence of the law of unintended consequences at work, it would be one of many examples of the Government failing to think through the implications of its measures. But what this weekend's disclosures make clear is that the possible consequences had been spelt out and yet the Chancellor chose to go ahead anyhow.
This should fuel the levels of concern as to what a Brown premiership would mean for Britain. As he moves ever closer to taking over from Tony Blair, the Chancellor has assumed a warmer tone of voice and an easier smile but his stubborn conviction that he has a monopoly on wisdom remains, despite mounting evidence to the contrary. Only last week we learned that, despite his Budget boasts about lifting children out of poverty, the numbers told a different story and the numbers living below the poverty threshhold had actually increased.
On one big decision, giving independence to the Bank of England, he made his most effective contribution to British economic health because he handed over responsibility to those who had a better understanding of the issues. If only he had shown similar restraint in the area of pensions, we might now have millions of people looking forward to the sort of comfortably padded retirement which is now only available to the few.
Inevitably, those few continue to include politicians