“Brexit penalties” and the price of freedom.


What kind of a club charges you £59bn to leave it?

If the EU was a pension plan, we’d be screaming about exit penalties. But I suspect we are talking up the cost to highlight the brilliant negotiating tactics of our Lords and Masters which will no doubt ensue. It is not just incoming CEOs who talk up the scale of the task ahead of them and try to get the bad news attributed to those taking decisions before their arrival.

So I take all these projections by the OBR with a pinch of salt. Not only do we not know the cost of leaving, we have no idea about how the new world order will play to our strengths. Brexit may have been Trumped.

But enough of my cod macro-economics.

Yesterday I was asking not what the price was, but who would pay the price. My analysis was a little wonky and one of my mates pointed to national insurance as a “tax on the low paid”. But by and large by simple analysis that income tax decreases favour the rich and indirect taxes do in the less well-off stands.

As far as I can see, the price of freedom, for all the rhetoric – continues to be born by the less well paid – who will see lower benefits, higher indirect taxes and will only marginally benefit from tax cuts. Indeed, the biggest area of tax reform that might have really redistributed – pension tax-reform, was barely touched.

While the JAMs  won’t pay more to put fuel in their cars , they will pay more to insure them (due to higher indirect taxes).

While the 3% of wealthy pensioners looking to get double tax-relief by reinvesting tax free cash into SIPPS, may be thwarted, the tax-relief system on pensions continues to benefit the rich. Many thousands of those just getting by will be saving into master trusts without any tax relief for another year.

The Price of Freedom is being paid by those who can least afford to do so.

It is good that we are investing for the future to increase productivity. But we need to change the mind set of a nation which appears to favour sitting in traffic jams than travelling by train. While some sectors of the economy forge ahead using AI , the block chain and digital automation, other parts of our economy, pensions included, lag.

Yesterday I went to the campus of Warwick University. At Coventry railway station I saw lines of taxis picking people up to travel short journeys while the busses we travelled on were empty. On my journey up I was criticised by someone for working on my laptop and not looking at the scenery. I tried finding a section of my timesheet which says “looking at scenery”.

The price of Britain’s freedoms cannot be paid from an unproductive Britain. The job of Government is not to make us more productive, that is our job, Government’s job is to make sure that there are enough trains to work on, that busses are there so we don’t need lines of taxis and that we can be productive wherever we are with the help from our friends in the cloud.

Yesterday I asked for a budget without spin and without jokes. We got the usual jokes and I fear we got the usual spin. The fundamental injustices that beset the poor are still there and the profligacy of the rich in terms of unproductivity are clear to see.


While I am happier with Hammond-time than with Osborne’s austerity, I think we are a long-way from Merkel’s straight-forward honesty employed with the German people.

By far the most telling comment in Hammond’s speech was when he reminded us that we work five days to do what the German worker does in four. Until we learn to work smarter, we cannot help but pay a high-price for Brexit. But if you want to get JAMs to be more productive, then you need to educate and empower them, the answer to the problem is not with per capita productivity, it is with the management of the means of production.


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 “Brexit penalties” and the price of freedom.

  1. Spot on about the JAMs. For a government that believes in incentive, they’ve done an amazing job of reducing them for low paid people.

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