Balls talks ... Arrant Nonsense
Few things have illustrated as clearly what is wrong with New Labour as their reaction when The Times eventually managed to use Labour's own Freedom of Information legislation to see the advice given to Gordon Brown before his disastrous decision to abolish the Dividend Tax credit on pension funds and thereby raid pension funds to the tune of £5 billion a year.
By now this has taken £50 billion from pension savings directly and between another £25 billion and £50 billion indirectly through knock-on effects such as reduced incentives to save, consequent closure of many final salary pension schemes either to new members or even sometimes existing ones, and reduced asset prices.
It is interesting to see how clearly the risk of such a sequence of events was foreseen by the treasury. Their advice to Brown warned of the possibility that
Pensions would be cut
Fund values would fall by up to £50 billion
Council tax would rise to pay for local authority pension fund defecits
Schemes would be driven into insolvency.
All these things have come to pass.
This has clearly dented Brown's reputation and it has come up a number of times on the doorstep in recent weeks. It has been interesting to see how this report was the "last straw" which caused many people who had previously bought into the common wisdom that Brown is a successful chancellor to finally realise that his record is more mixed than they had imagined.
Faced with the prospect that the lasting damage which Brown inflicted on pensions might finally be matched with corresponding damage to his own electability, New Labour and their friends have responded in the only way they know how to do - spin and counterattack.
Polly Toynbee in the Guardian wsa the funniest, suggesting that the whole thing was an orchestrated pesonal attack on Gordon Brown by the Conservatives and our supposed allies in the press. Come off it Polly - for most of the past dozen years "The Times" has been new Labour's closest ally among the quality press, even more so than The Guardian.
Meanwhile, Treasury minister Ed Balls accused Brown's critics of "arrant nonsense" and suggested that the chancellor had been advised to scrap DTC on pension funds. He is guilty of the same error - selective quotation - of which he accuses others. But this is not the main reason why Balls is the person who is talking arrant nonsense.
It is legitmate to point out that Brown was warned of the risks he was running ten years ago with his £5 billion a year raid on pensions. But the strongest evidence that his judgement was at fault is not the 1997 decision, bad though that was. It was the fact that, although it has been crystal clear for eight years that the risks of a pensions disaster of which the treasury had warned were becoming a reality, not until this year did the government make a serious attempt to repair the damage. And even then it was too little, too late.
By now this has taken £50 billion from pension savings directly and between another £25 billion and £50 billion indirectly through knock-on effects such as reduced incentives to save, consequent closure of many final salary pension schemes either to new members or even sometimes existing ones, and reduced asset prices.
It is interesting to see how clearly the risk of such a sequence of events was foreseen by the treasury. Their advice to Brown warned of the possibility that
Pensions would be cut
Fund values would fall by up to £50 billion
Council tax would rise to pay for local authority pension fund defecits
Schemes would be driven into insolvency.
All these things have come to pass.
This has clearly dented Brown's reputation and it has come up a number of times on the doorstep in recent weeks. It has been interesting to see how this report was the "last straw" which caused many people who had previously bought into the common wisdom that Brown is a successful chancellor to finally realise that his record is more mixed than they had imagined.
Faced with the prospect that the lasting damage which Brown inflicted on pensions might finally be matched with corresponding damage to his own electability, New Labour and their friends have responded in the only way they know how to do - spin and counterattack.
Polly Toynbee in the Guardian wsa the funniest, suggesting that the whole thing was an orchestrated pesonal attack on Gordon Brown by the Conservatives and our supposed allies in the press. Come off it Polly - for most of the past dozen years "The Times" has been new Labour's closest ally among the quality press, even more so than The Guardian.
Meanwhile, Treasury minister Ed Balls accused Brown's critics of "arrant nonsense" and suggested that the chancellor had been advised to scrap DTC on pension funds. He is guilty of the same error - selective quotation - of which he accuses others. But this is not the main reason why Balls is the person who is talking arrant nonsense.
It is legitmate to point out that Brown was warned of the risks he was running ten years ago with his £5 billion a year raid on pensions. But the strongest evidence that his judgement was at fault is not the 1997 decision, bad though that was. It was the fact that, although it has been crystal clear for eight years that the risks of a pensions disaster of which the treasury had warned were becoming a reality, not until this year did the government make a serious attempt to repair the damage. And even then it was too little, too late.
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