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Dan Neidle or Prem Sikka’s plans for the DWP budget?

henry tapper

There are two ways of looking at the national insurance fund. Prem’s tweet has a lot of fun photos but not much sensible comment.

I am pleased this rebuff is coming from Dan Neidle. This is the kind of issue that should be on the agenda of the Pension Commission and I am neither totally with Prem or Dan.

Here’s Prem’s reaction to the NI fund accounts

Prem’s correspondence switches from twitter to linked in as Dan posts

First, that “surplus” is there for a reason: as a buffer to cover pensions/social security for an aging population. The Government Actuary estimates that the fund will be exhausted by 2043/44

Take money out of the fund now, and we hit a fiscal crisis in 20 years’ time
Second, governments have not “raided it to fund NIC cuts for the rich”. There have been no NIC cuts for the rich in my lifetime.

Third, whatever “general tax cuts for the rich” Sikka is talking about haven’t affected the national insurance fund. Only national insurance cuts would affect the fund.

Fourth, the NIC exemption for freeports costs about £10m. Irrelevant to an £86bn fund.

I don’t know if Sikka sets out to mislead, because he likes clicks, or if he simply has no clue about accounting and tax. Either way, it’s deeply embarrassing he’s a member of the House of Lords.

This is a real debate, the kind of debate between a conservative accountant and a socialist  Professor of accounting. I can see where both are coming from and my heart is with Prem.

If we cannot assume growth in our economy and use our available capital as Prem suggests then where is our ambition as a nation. If our economy is to replicate what we did in the first quarter of this century in the second I would be with Dan but there should be no target to achieve that, that would be failure.

Instead we must plan to grow, not just by investing private funds but also the public fund so that we have a better motivated and a more productive workforce.

Prem Sikka did not inherit his peer ship. Dan Neidle has been 24 years at Clifford Chance one of our finest professional partnerships.

What this conversation tells me is that I can understand public finance through two minds and two articulations of those minds. I’d like to thank the two gentlemen and hope that if they meet in passing, they will remember they can both be wrong and right in the eyes of the public!

Prem Sikka
Dan Neidle
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