Boris on pensions!

IMG_4384All week I have been reading tweets from John Ralfe on the Osborne Pension Reforms. John’s argument is that the reforms have been imposed upon us without consultation and that they are likely to do permanent damage to the pension system.

John is someone knowing for wanting pension schemes to lock into fixed interest structures and he puts a high premium of guarantees. He is not a natural enthusiast for risk taking, whether the risk is pooled accross a generation or shared with past or future generations of savers.

In short, he is an enthusiast for the status quo- which is a very conserative position to adopt.

At the other end of the definitiions we could apply to conservatism, is the free-market loving Boris Johnson who espouses a delight in setting people free from any kind of restrictions. The proof of his pudding is in his eating and Boris eats for Britain (at least in digesting new ideas).

So to cheer me up after a diet of Ralfean austerity, here is Boris as he appeared recently in the Telegraph. (Edited highlights from the loveable buffoons blog-rant post Osborne’s pension reforms).

Whether you are Will Hutton or Ed Milliband, you’ve got to love this man’s style!

 

People are being extra cruel about Ed Miliband, and saying the reason he was so hopeless in his Budget response was that he didn’t really grasp what was being announced. That is allegedly why he flapped and frothed like a hyperventilating goldfish.

He didn’t understand what this “annuity” business was – and so he went into his stock rant about which schools everyone used to attend, and which university clubs they belonged to (a bit much, when you consider that both he and I were at the same prestigious forcing-ground of talent that was Primrose Hill Primary School, Camden; or when you consider that Ed Balls himself was a member of an Oxford drinking club so egregious that he once appeared in Nazi uniform). He was flannelling, they say, out of ignorance and desperation.

As it happens, I think this reading is unfair on Ed. He wasn’t ignorant; he was just desperate. He knew instinctively that he had been aced by George Osborne – with a long, looping, high-kicking and unreturnable serve. The Tory firework had gone straight through the Labour catflap. The hand grenade had tinkle-plinked down the periscope and was bouncing about in the cabin of the Labour submarine and – KABOOM! – their position was destroyed.

 

It is free market, it is libertarian, it is all about trusting people to run their own lives – and, as the wretched Labour party is finding out, it is very hard to disagree with. The pensions minister, Steve Webb, crystallised the Government’s thinking in a phrase that sent the Lefties round the bend – and which made me stand on my chair and cheer. It was going to be up to us to decide how to spend the money, he said, and if people wanted to blow it on a Lamborghini – well, he was “relaxed” about that.

He is making a moral point, that when people reach a pensionable age they should be allowed to run their own lives, and not be treated like children. It may well be that buying a Lamborghini is not always the right move. There may indeed be some foolish old people who end up living in a rusting and motionless Lamborghini and eating tins of dog food, because they have gone for the luxury car without making adequate provision for the rest of their needs.

There might be some pensioners who spent their declining years plying the streets with a Lamborghini minicab. As I am sure Steve Webb meant to imply, the Lamborghini option is not going to be for everyone – not when the average pension pot is £25,000. But the point is that it is their look-out; it is their savings; it is up to them to decide what to do with it. It is that sudden rush of freedom – the empowerment of millions of people – that naturally appals the left.

Though Miliband and Balls have yet to announce their precise policy response, the idea of liberating Britain’s pensioners has sent some of my favourite socialist commentators into spasm. In The Observer, Will Hutton prophesied that “This pensions ‘freedom’ will be a long-term social disaster.” He argued that pension contributions were sheltered from tax, and that therefore, “We should care if the resulting money is spent on a Lamborghini: a chunk of the car belongs by right to taxpayers.”

Isn’t that amazing? By that ridiculous logic a chunk of anything that we buy with our existing pensions “belongs by right to taxpayers”. Is he seriously saying that taxpayers have a right to go around telling people how to spend their pensions? It isn’t taxpayers’ money, you Lefty bossyboots control freak: it’s the money that the pensioners have saved up themselves – out of their taxed income!

 

 

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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1 Response to Boris on pensions!

  1. Con Keating says:

    Henry – At 5% investment return rates around half of the funds in a pension pot at retirement have in fact come from the tax concessions from which they benefitted – and more if investment rates or taxes are higher – I suspect that is where the HMTC 55% tax rate on liberation came from originally. Now I don’t particularly have a problem with that, but I do have a problem if someone takes advantage of this tax concession, which is partly coming from my pocket and blows the lot, requiring me to support them further. Hutton’s point is that we modified the property rights inherent in pensions to achieve a purpose – we paid higher taxes to eliminate the future higher taxes of retirement support – now we are being told that we paid higher taxes and will have to pay them again in the future if these people are profligate, incompetent or unlucky. That in certainly not sound or suatainable government in my book.

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