Monday, April 02, 2007

Gordon Brown and the pensions timebomb

Brown's ill-judged decision a decade ago, to ignore civil servants' advice and scrap dividend tax credits on pension funds has come back to haunt him. He was warned at the time that this could leave a massive shortfall in pension funds, which it did. Trying to hide the news from hacks by stalling the release of the documents and then finally releasing them on Friday just as parliament went into recess compounded the folly.
The doyenne of city hacks, Patience Wheatcroft, and fomer minister for welfare reform, Frank Field MP were both withering in their assessments of the Iron Chancellor's judgement.
This blog is a fan of Gordon Brown, who brings much needed gravitas and seriousness of purpose to the New Labour project. But what was he thinking of, ten years ago, with his tax raid on pension funds? Flushed with the heady success of the 1997 landslide it certainly wasn't long-term pensions policy. But how can he have been so short-sighted?
Any mugwump who glanced at the demographic trends (ageing population, low and decreasing birthrate) would have urged him to exercise caution and above all not to touch pension funds.


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