Saturday 11 May 2002
Taxconsumers mug taxpayers
I recall listening on the radio to Gordon Brown's first budget. There was all the usual tinkering with the tax system which makes chancellors the toast of accountants; then came the bombshell - the £5 billion a year hit on pension funds. I realised how politically astute Brown had been when I got home that evening and saw that there was no mention of pension funds on the teletext news. Well, as we say in Scotland: Ye ken noo. Pension funds have been losing money ever since Brown abolished their dividend tax credits. It is a truth universally acknowledged that we face a pension crisis - and that's before we take into account the probable transfer of British funds to the continent where most countries have vast unfunded state pension liabilities. In the UK private sector, companies are responding by switching from defined-benefit schemes - where the pension amount is guaranteed, to defined-contribution schemes - where the contributions but not pension payouts can be fixed. But public sector pensions are apparently sacrosanct. We council taxpayers working in the private sector will now have to bail out local government pensioners at a time when our own retirement funds continue to be depleted by Mr. Brown. Are you surprised?