How often do you throw things at the television or scrunch up your newspaper in a rage? For most people, I suspect it's when a referee makes an obviously wrong decision. For me, it's when politicians do something which is manifestly unfair or a lie.
All the main political parties have shown themselves capable of forcing me into an unplanned trip to Currys.
For the Conservatives it was when Kwasi Kwarteng announced a reduction in the top rate of income tax from 45 per cent to 40 per cent. Low taxes are an inherently good thing because they promote faster growth which is key to the prosperity of all of us but, at a time when people were struggling with living costs, any scope for income tax cuts should have been focused on families wrestling with their bills not those flying Club Class. How could a Conservative government be so stupid? Luckily, others saw that too and Liz Truss and Kwasi Kwarteng got their jotters.
For the SNP the most recent example of many was the Michael Matheson affair. He lied. We knew that and Humza Yousaf knew that. Does anybody now believe that Matheson was not sitting right next to his children in Morocco watching the football on his parliamentary iPad? Matheson tried to cling on and Yousaf backed him, both were a disgrace.
Finally, the Labour party cross the line by contemplating an act of gross unfairness should they win office. The matter at stake is a boring but vital one: pensions.
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Until the 2023 budget there was both a restriction on how much you could put into your pension scheme and a limit on how much value could build up without incurring a significant tax penalty.
The first of these limits is sensible, the amount you can put into a pension and defer tax by doing so should be limited. The limit does not stop you saving in other ways it just limits the tax benefit.
The limit on the value of your pension pot is, however, rather daft. It penalises good investment decisions, worse, it leaves people in a position of uncertainty many years before they retire. Somebody in their 40s could well fall foul of a cap on the value of their pension fund two decades later because they put some money into their pension now and it grows and breaks the cap – but they won't know if that is going to happen. This acts as a disincentive to saving, it is complicated and it encourages people to retire early, all of which are unhelpful.
Although undesirable, capping the overall value of your pension savings was applied to everybody.
As wages rose and the cap was much reduced more and more people began to fall foul of it and it caused, in the NHS for example, senior doctors to retire early.
In the 2023 budget the UK Government therefore did a very sensible thing which was to do away with the cap entirely, removing the penalty if your pension fund had grown beyond a certain value.
Cue howls of rage from Labour who promise, if elected, they will put a cap back into the system.
When the cap was abolished it applied at a value which, if you bought an inflation protected annuity (income for life) at age 65 you would have received an annual income of under £50,000. Enough to make your life comfortable but you won’t be going on many cruises.
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The Labour party could decide on a policy of bringing the cap back at a higher level. As long as the level is high enough and is increased with inflation then it would not do too much damage to the system. Above all it would be fair.
What is enraging is that, lobbied by public sector unions, the Labour party seem to be contemplating a varying level of cap with specially selected groups such as doctors and teachers enjoying either a higher cap or a distorted calculation of what the value of their taxpayer-backed final salary pension is to fiddle their way under it.
Large number of public sector employees already have pensions which those in the private sector can only dream of. The cost to the taxpayer is huge, it is already unfair. Public sector pensions are the nettle which is never grasped.
Giving a doctor a pension value cap which is higher than a senior manager in a private company which makes lifesaving medical devices or – for that matter – makes pizzas is grotesquely unfair.
A cap on the value of a person's pension fund is neither wise nor necessary but if there has to be a cap we should all wear the same one. Think again, Labour.
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