Monday, March 28, 2005

More Bad News on Pensions

I become more and more convinced that the damage they are doing to the country's pension provision is on its own sufficient grounds why Britain absolutely cannot afford the re-election of the Labour government.

It is bad enough that in his first budget Gordon Brown made pension funds liable to Advanced Corporation Tax, a form of double taxation which effectively takes £ 5 billion a year from pension funds. This was the first and worst "stealth tax" - Mr Brown hoped that people would not realise that a change to something with a remote-sounding name like "Advanced Corporation Tax" meant that their pensions were being taken away.

Then Mr Brown introduced an atrociously complicated "pensions credit" system which destroys incentives to save because anyone who does invest for their future loses 40 pence of pensions credit for each pound of income he or she provides. Surprise surprise - as incentives to save have been destroyed by Gordon Brown, the level of saving has fallen.

The combination of these two disastrous measures has been to erode the large bank of investments which had been built up under the previous government - in 1997 there was as much invested in pension funds in Britain as the whole of the rest of Europe put together, but that is no longer the case. As even the former Labour pensions minister Frank Field has admitted, this government inherited one of the strongest pensions positions in Europe and how has one of the weakest. Unless something is done 12 million people face an old age in poverty.

You might think that after such a deplorable record even this government could not make matters worse but alas, Gordon Brown is up to it. Not content with the damage he has already done, the chancellor is introducing from next year a 55% tax on pension funds which exceed a lifetime value of £1.5 million in April 2006, rising to £1.8 million by 2010. This will catch many people on middle incomes who are paying into occupational pensions schemes. For example, Pensions consultants Hewitt suggest that a 30 year old with a salary of £40,000 who is a member of a Final Salary pensions scheme could be caught. Of course, many final salary pension schemes have been closed to new members as a direct result of the Labour policies described above. But those who are fortunate enough to be part of such a scheme, who have generally carefully arranged their career choices to ensure that they have that security for their old age, and paid substantial contributions into it, will rightly be incensed when they find their thrift punished by Mr Brown's latest plan to tax pensions.

This will do even more damage to incentives to save, so fewer people will save, and the long-term pensions problem will get even worse. The scale of the effort which will be required is immense even now - after another five years of the ruinous policies of the present government it would be even worse.

The demographic time-bomb which we face as people are living longer has been obvious for 20 years. Although the NHS has had plenty of problems, the fact is that under both Conservative and Labour governments, life expectancy has significantly increased.

With longer lives and a lower birth rate, people of traditional working age are a lower proportion of the population and older people a much higher proportion. If we want to avoid a huge problem in paying for their pensions and medical and social care, we need to either have vastly higher taxes, or provide incentives to save.

Present Labour government policies have reduced those incentives and are causing an increasing proportion of people to face an unpalatable choice between spending their old age in relative poverty, or working almost until they drop.

A more flexible attitude to retirement may be part of the answer, but I don't believe it would be at all desirable to force people to continue in full-time work past 65. However, where people are allowed to organise their own working patterns, very few opt to work full-time up to some arbitrary date and then completely stop work. I know self-employed people who still work part time well past the age of seventy - and are still good at their jobs. This would not suit everyone, but it might suit some who do not currently have the option

I suspect that a significant number of people aged over 60 or 65 who were given the choice would welcome the opportunity to work part time, with their part-time salary supplemented by a partial pension, when they no longer had the energy or wish to remain in full-time employment but still had plenty to offer.

However, the most important task for the next few years is to dismantle the disincentives for savers which Brown has put in place during his disastrous chancellorship, and give people incentives again to invest in their savings and their future.

Sunday, March 27, 2005

Butlins Swimathon completed

Well, I managed it.

Of the twelve times I have now completed the Swimathon, today was the hardest, because I have been out of action for the past two weeks with a nasty chest infection, and have not 100% recovered. I had decided beforehand that if I found myself in real difficulty I would abandon the swim rather than risk making myself ill.

The pool at the Cockermouth swimming centre is 25 metres long, so to complete the 5000 metres challenge I had to swim 200 lengths. In the past when in better shape I have swum the full 5,000 using front crawl, and completed it in under an hour and a half. However, I knew that would not be possible this year and I would need to conserve my strength to finish at all. So I mainly used breast stroke, mixing in one length of front crawl with nine lengths of breast stroke so as to use a different set of muscles. It took me two hours, which is the longest time it has ever taken me, but I'm quite pleased just to have finished.

Sponsorship money from the swim will go 70% to the children's charity NCH and 30% to the swimathon foundation. Anyone who would like to retrospectively sponsor me is welcome to contact me at charityswim@chris4copeland.com

Monday, March 14, 2005

A595 Campaign

This weekend I have been canvassing in the Holmrook area. I was not surprised to find strong opposition to the idea of De-Trunking the A595.

This road is the only effective way to reach a large area of Cumbria. It is the only road access to an important national facility - the Nuclear Waster repository at Drigg. It is the main route from a large part of Copeland to the most accessible District General Hospital, currently at Whitehaven. (That argument will be even stronger if the hospital is moved.)

The relevant Health And Safety authorities have also advised that we need evacuation routes to both North and South from Sellafield. The only possible evacuation route to the South is the A595.

In my view, and that of every local resident with whom I have discussed it, the arguments to keep trunk status for this road and indeed improve it are overwhelming. I will be attending the Public Inquiru next month with local County Councillor Sue Brown to make this point.

Sunday, March 13, 2005

School Meals

Does anyone reading this have a view of the quality of School Meals in Cumbria ?

I have followed with interest the debate touched off by Jamie Oliver on the subject of school meals. The Secretary of State for education seems very defensive on the subject.

The meals served to my children in both the nurseries in Cumbria which they have attended - attached to schools in Gosforth and Whitehaven - seem to be both tasty and nutritious. However, a member of my family with three school age children in another part of Cumbria reports that her fellow parents are very concerned about the quality and type of food.

I would be very interested to know about the experience of other parents in Cumbria, especially in Copeland. Please feel free to make a "comment" or send me an email at chris@chris4copeland.com

Butlins Swimathon 2005

I shall be taking part in the Butlins Swimathon this Easter for the twelfth consecutive year.

Unfortunately there is no participating swimming pool in the Copeland Constituency, and the Bricket Wood pool where I have taken part in the past is currently closed for repairs. Instead I have applied to take part in the session at the nearest participating pool, which is Cockermouth.

Swimathon is the largest charity swimming event in Britain: there are a number of possible challenges but the headline event, which I managed to complete for the past 11 years and am attempting again, is to swim 5,000 metres in one session.

70% of the money raised by the Swimathon this year will go to the Children's charity NCH, the remainder will go to the Swimathon foundation which makes grants to local good causes.

If anyone would like to sponsor me, please drop me an email at Charityswim@chris4copeland.com

Sunday, March 06, 2005

Hostpital Petition handed in

To Carlisle on Wednesday to hand in the Hospital Services petition. An initial count suggested we have about 1,000 signatures in total on our petition, which reads as follows:

"We, the undersigned, call on the North Cumbria Acute Servies Health Trust and the Primary Care Trusts to retain District General Hospital Services on a site within the Borough of Copeland. These must include and ITU with Accident and Emergency, and shoud also include as many other hospital services as can safely and effectively be provided."

(There were two slight variations on the wording - for example, before the Trusts made clear that there is no proposal to close Millom Community Hospital we also had a line supporting the retention of that hospital. But neither )

I am still waiting for one or two colleagues to return the forms on which they have been collecting signatures, and will forward these when I get them. I handed the main body of the petition, with 715 signatures, to Nigel Woodcock on Wednesday with my written response to the Trust's consultation.

The Trust's board meeting to consider the response to the consultation is on Friday 18th March.

Council Tax Set

Copeland's council tax has now been set for the coming year and - surprise surprise - residents face yet another above-inflation increase.

The largest element of the council tax goes to fund the county council and the biggest single reason why it was above inflation is a less-than generous grant settlement from Central Government.

Council tax rises have been particularly painful for the elderly and those on fixed incomes. I an very glad to be able to support the policy of using some of our £4 billion of tax cuts funded by savings in government administration to halve the council tax bills of pensioner households.