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From The Times

April 3, 2007

I’m afraid Brown’s not as black as he’s painted

The Chancellor’s pensions move had its advantages

David Aaronovitch

Dear Adena Johnson, widow, pensioner and Labour supporter of Ayr, this column is for you. When you appeared, cup of tea in hand, on our news pages yesterday, you told our reporters how you’d “always thought Gordon Brown was a very good Chancellor” but that now, upon learning that your eminent countryman had — as the piece put it — “defied repeated warnings over his pension fund tax raid”, you felt a deep sense of betrayal.

Before you go straight off and put an X next to the name of some Scot Nat whose idea of economic policy is to sprinkle fairy dust on the Scottish spending deficit while chanting “It’s Scotland’s oil”, I have some thoughts on what The Times described on the front page “the pensions scandal engulfing Gordon Brown”.

I did, Adena, have a slight problem with the pre-emptive use of the word “scandal” in this context. My dictionary gives scandal as being “an action or event that causes public outrage”, and given that we only broke the story on Saturday, I’m not sure that the public — yourself excepted — had really had sufficient time to be completely outraged.

Even so, the charge sheet against the Chancellor was a long and unpleasant one. In essence (the accusation runs), back in 1997 the incoming Mr Brown had come up with a wheeze for raising a few billion quid each year. But though he and his immediate band of ensofaed cronies thought it might be a splendid notion to abolish tax relief on pension contributions, the Treasury officials either (a) warned him not to do it or (b) told him that the consequences for pensions might be damaging if he did.

He didn’t care, though. He ignored the counsel and recklessly pushed right ahead, insisting that everything would be OK. As my esteemed page-mate, William Rees-Mogg, put it yesterday, Mr Brown’s “1997 stealth tax destroyed what had been, when Labour came to power, one of the strongest pensions systems in the world”. Then, when it was obvious that his “five billion a year assault on pension funds” had gone badly wrong and final-salary schemes all over the country closed down, he first sought to blame other factors, and then tried to cover up that he had been advised not to abolish the tax relief.

As a consequence, implied our splash yesterday, questions over Mr Brown’s judgment had led to John Hutton, the Pensions Secretary, reiterating his call for a contested leadership election. Good Lord, it would have been Black Monday for Mr Brown if we hadn’t already described last week as Black Tuesday.

Mrs Johnson, here’s my difficulty. What Mr Hutton also said on Sunday was that the Chancellor had not been “warned” by Treasury officials not to make the changes, and that — before 1997 — many tax experts supported such a change.

Strength is given to this view by the reminder that in 1993 Norman Lamont “proudly” reduced tax relief from 25 to 20 per cent. Of course, Mr Brown did it all at once, and that may well have been additionally damaging, but was it the main cause of the collapse of our wonderful pensions system? Many people think not. The pensions expert Stephen Yeo, a former adviser to David Willetts, was quoted yesterday as saying that he didn’t believe that Mr Brown’s decision was “even in the top three reasons”. Instead he blamed changes by Labour and Tory governments to pensions regulations, an unexpected increase in life expectancy and unexpectedly sharp stock market falls.

Of course Mr Brown chose to believe what it was convenient for him to believe, given that he wanted to raise some revenue. But was that such a sinful thing to want to do? Adena, this five billion a year, I don’t think he spent it all on wars and speed cameras. A lot of it will have helped, in the early days, to reduce government borrowing. Some may have contributed, say, to the radically reduced orthopaedic waiting times now enjoyed (if that’s the word) by your generation. Maybe someone you know got a hip? Is it also conceivable that the money helped to fund the reduction in corporation tax, thus assisting in the creation of jobs, not least in Ayr?

Under these circumstances was not the Chancellor entitled to make his own judgment about the right course of action? As Kenneth Clarke observed yesterday, it was a “bizarre idea” that senior ministers should be obliged to follow what may appear to be advice. And it isn’t a “scandal” to make a mistake — even a big one.

Perhaps, Adena, you and I should agree to ignore the accusations about stealth taxes. “Stealth tax” has become a debased term for any disliked revenue-positive change that isn’t either income or corporation tax. By this token Mr Lamont’s vigorously commended 1993 cut was a stealth tax, and one presumes that any new tax relief or tax credit is therefore a “stealth tax cut”.

This leaves me with the cover-up, or rather the attempt to prevent this newspaper having access to the Treasury advice. I think this was a huge and characteristic error by Whitehall, and that The Times was right to insist on disclosure. But Mr Clarke also reminded us that the view that Civil Service advice should not be made public is widely held among politicians of all parties.

Finally, Adena, I’d like to direct you (almost certainly unnecessarily) to something else that William Rees-Mogg said, about the pensions affair being “the biggest financial disaster” of Labour’s period in office.

This may sound a more impressive accusation than actually it is. What, in the scale of postwar governance, does it have to compete with? Since 1997 we have had no devaluations, no sterling crisis, no slumps, no mass closures, no negative equity, no real Black Tuesdays.

You might have thought that Mr Brown was “a very good Chancellor” because Britain’s economy has continued to grow during his stewardship, unemployment has fallen and inflation is also low.

Rival papers will claim that The Times is campaigning against Mr Brown — not least The Guardian, some of whose writers seem to consider that anyone who criticises the Chancellor is a Tory or a Blairite or both, that anyone who wants a leadership contest is a quisling, and that anyone who expresses any interesting Labour policy ideas is a maniac.

Nothing could be further from the truth (well, some things could be further from the truth, but it still isn’t true). We have a great scoop that our journalists worked long and hard for and we’re entitled to run it for all it’s worth. If we’re a little exuberant about it, then that’s no more than many politicians are. And no less.

In 1979, the pension tax credit was 3/7 of dividends ie 42%. The tories wheedled this down over the next 17 years ( 'stealthily ' or ' in line with compensating other tax changes' to 20%. )

Brown took the other 20%.

There are a lot of comments here based on total ignorance of the issue. Yes this Government has failed - education needs to be beffed up

stephen herlihy, Bristol,

....anyone what has the temerity to want a decent education for their children and opts for private school will also now subsidise the eductation of other children as schools, many of whom have a tradition of philanthropy, are forced to justify their charitable status - so your taxed on income, relieve the state of the burden of educating your child and get taxed again on schools fees to subsidise the education of other children...

Andrew, Sheffield,

Brown is finally be brought to account.
People talk about the last 10 years but it is only been achieved by borrowing.just look at 2006 trade gap deficit 80 Billion .
Paid by asset stripping
And I would like to know the full extent of his borrowing ,because there as been a lot of creative accounting.And what the true national
debt as been increase, while he as been in office
I wonder if he is related to Robert the Bruce.

A Walton, Leicester, England

For years I have wondered why no comment was made about the true loss to pension funds due to taxation of dividends over the last tenyears it is not just the twenty per cent that has ben lost but each year that amount has not been reinvested in the fund so that over time the fund has lost out massively but then no one has mentioned it yet perhaps it is just so frightening and another example of how the smoke and mirrors style of this government has decieved the poblic yet again

Anne, Bristol,

Brown’s much blacker than he’s painted - 4

Tony Blair believes that whatever he does is right purely by virtue of the fact that it is he that is doing it and that makes it right - Gordon Brown is exactly the same.

Britain’s economy has continued to grow during his stewardship, unemployment has fallen and inflation is also low - the people of Great Britain did this, with a little help from the Bank of England. Without Gordon Brown’s meddling, the outcome would have been far better.

RR, Farnham,

Brown’s much blacker than he’s painted - 2

‘bizarre’ - but it’s not ‘bizarre’ if the advice is patently correct.

Civil service advice should not be made public - it is not the advice that is interesting, it is the way that our next Prime Minister behaved in relation to that advice that is of crucial interest to the people of Great Britain

RR, Farnham,

I read today that Mr Brown et al have managed to blow £12bn on the NHS IT system which as predicted doesn't work properly. Ready to watch the ID card money go the same way?

On that basis, those on Tony's sofa have managed to blow two years of OUR pension money on "fresh air". Ming and Dave need to put Brown, Blair and Hewitt "on the rack" after the Easter Break - the opportunity now exists to get New Labour on the ropes and for the opposition to show us what they really are made of. This is a golden opportunity.

The real answer to the "great pension scandal" -- is that the great British Public have got nothing to show for it.

I am going to have an ID card and pay higher taxes, on this side of the channel, but I look forward to it. Safe in the knowledge that I am going to get some value for money.

Rob, Eindhoven, NL

Brown’s much blacker - 3

Since 1997 we have had no devaluations, no sterling crisis, no slumps, no mass closures, no negative equity, no real black Tuesdays - we have also had a government that inherited an economy in robust good health that Gordon Brown soon proceeded to milk to pay for his ‘investment’ in (read ‘expenditure on’) public services that only the most sycophantic Labour-supporters could claim to be good value for money. All this against a background of a benign world economy, for which Gordon Brown cannot claim any credit (but does). When he becomes Prime Minister, his chancellor will have to deal with the consequences of his gross mismanagement of Great Britain’s finances. Gordon Brown will shrug off any responsibility for the mess the new chancellor will have to try and sort out; he has never publicly acknowledged what a golden inheritance he walked into when he became chancellor in 1997 – he will never admit what a total mess he has made of our public finances.

RR, Farnham,

He has sacrificed future pensioners' incomes for growth. He could have increased tax to get the money but we would have felt the pain of straight taxation immediately and growth would have been affected. Taxation of pensions would not be felt till people retired. It is only now that the pain is beginning to be felt - at least by those that have private pensions.

Robert Maxwell comes to mind.

ben, london,

it was an obscure tax break that the conservative government had already reduced. In terms of impact it is far far less significant than all pension holidays that companiers took ie. everything was on the up sp they simply stopped paying in - for years. That's what was reckless. Ans that's where anger should be directed. But it's more fun to have a pop at Gordon Brown.

Michael, London,

To Ron Hedstrom,
The low inflation and low interest rates were engineered. They have created record debt, both government and personal. This is where the growth came from. But now it is time to pay back the money. The situation is far worse than if we had just taken a pull back in the economy when everyone else did in 2000. Creating the illusion of wealth through assets has kept the consumer spending. The British public are about to find out what happens when credit drys up, payments are required, there is no money to fall back on and the illusion of wealth evaporates.

Edward, Sydney,

Robber Bwron stole the pensions of hard working people. These people were tricked and cheated. If someone had mugged them on the street the Police would be involved. If a bank clerk had stolen the money through the banking system the Police would be involved. Why are the Police not involved now? The people have been swindled.

speak, An English Shire not 'uuukaaa', England

Brown insisted that the Employer picked up the bill,and who is the biggest employer..the government and local councils who will clearly bail out their own,without them even paying in more or working longer .We money purchase people have had no bail out monies and will have to pay extra for all these cival servants through direct ot indirect taxes,and even through the increasing council taxes once the capping is abolished,masking this problem.Note all local councils pension deficits,and even worse the governments.
Triple taxation..Im subjected to more..

toni bates, havant, hampshire

I have been following politics since 1945 - Gordon Brown is the finest chancellor in that time. Tory supporters would be dancing in the streets with such a ten year record of growth. low inflation, low interest rates and relatuvely low unemployment

Ron Hedstrom, Peterhead, Scotland

It is true that Britain has suffered no financial crisis during the past ten years. That is unique for a post-war period of such length. For such an achievement I for one might have considered nominating Gordon Brown for sainthood, if it had not been for the case that during the same period the country's pension pot has, greatly through Mr Brown's actions, gone from top of the heap to near the bottom. The young workforce of today should understand what New Labour has done with their future.

Ken Miller, Benfleet, England

Gordon Brown is a socialist, I'm not convinced, if he was then he would have attacked the rich and not those worst off which is who will be hit by the pensions fiasco and by the budget tax "re-working" I for one have been repeatadly disappointed by the Labour government failing to help those who need such help. and in regards to inflation, Shane I concur 100% while what you but in the supermarket hasn't lept in price, many young people are now priced out of the housing market entirely.
an election now would be a disaster for Labour, so please can we have one.

Ben, Folkestone,

Of course this is the worst financial scandal to hit since 1997 and until it is reversed it will continue to bite. What the supporters of New Labour fail to also mention is the tech boom and bust on their watch - the FTSE 100 is still not past its tech boom high. However they are quite happy to tell us about the crash of 87 which is now a mere footnote in the progress of the FTSE - ie those that continued to hold their funds after the crash didnt loose. There has been no negative equity - just a record amount of consumer debt that has to be paid off, a country cannot live on the never never forever although for some it has been fun doing so for the last 10 years. As for closures - tell that to the lads at Rover or the girls at Burberry. And finally - job creation, its easy to recruit thousands to the public sector to shuffle paper, any manager can create an empire and add to headcount, I just query whether its value adding or just adding to the state final salary pension bill.

Al, Newcastle,

A good chancellor? I seem to recall that we started 1997 with 16bn in the bank - he had blown that - plus about 30bn more - within a very short space of time, and still our debt continues to rise.

We are on the brink of a house price crash and possible recession and still nobody seems to notice, even as foreign investors are oh-so-quietly pulling out now before the proverbial hits the fan? I call THAT delusional. Compared to what is around the corner, the pensions 'crisis' is nothing.

Jo, Cambridgeshire, UK

For Tony in Crewe. This isnt a new issue - those that take an interest in how to fund their retirement rather than play the ostrich, have been infuriated by this bit of legislation for 10 years. I will have to save more each month to achieve my desired pension pot because of the 1997 budget. It is the sole reason I havent voted for Labour since 1997. This issue has only this week, because of the disclosure under the freedom of information act, made it from the money section at the weekend to front page news. Tony - if you followed the story you'd see that the timing of release was governed by Fridays ruling and Browns two year fight to stop it, not some Tory plot.

Al, Newcastle,

I believe "stealth tax" is any revenue gleaned by a government from direct or indirect taxation that is not included in value in the Chancellor's budget speach.

I believe it is a scandal as I was outraged in 1997 when introduced and was dumbfounded that this was not No 1 on the agenda at the last election.

John M Manchester

John McDonagh, Manchester,

The Chancellor has lavished money on the NHS. Whilst personally I think this was a mistake and would have given education priority, it has had an effect. The best young men and women are queuing up to get into medical school. It has to be paid for, and that means taxes. Everyone who is hit naturally wants the tax to fall somewhere else. Old people don't need high pensions, though of course they enjoy them. Young people need money to bring up children. It is obvious where the burden should fall.

Malcolm McLean, Bradford, UK

Brown did not abolish tax relief on contributions. He removed a major tax relief within our pension funds. He did this against much expert advice, without consultation and then tried to cover up the advice that had been given. The result is "double-taxation" i.e. the pension fund is taxed but so are it's benefits. That removes a major reason for investing in pensions and encourages the very sensible view that it is better to spend one's earnings than to save them. The pension of Gordon Brown is unaffected by this change.

charles shepherd, Birmingham, England

How fortunate is Gordon Brown to have allies such as David Aaronovitch and Ed Balls to mount a defence of sorts on his behalf over his pension tax raid! Mr Brown is spared the chore of stirring himself. Even Tony Blair has this morning weighed in, saying the tax raid decision was taken by the whole Government. How many other economy-transforming masterstrokes, previously thought to have been Mr Brown's own, were collective Government decisions? The inspired decision to allow the BoE the freedom to set its own interest rates? If so, how has our brilliant Chancellor been occupying his time over the last decade? After all, the record-breaking run of continuous quarterly economic growth began under Ken Clarke's chancellorship.

Doubtless all will become clear when Macavity responds to the Commons debate initiated by the Tories over the pension raid fiasco - if Macavity deigns to be there, of course.

Ray Burke, Stockport, England

Much as I despise our tax and spend chancellor, I have to agree with you. The 'raid' was a minor contributing factor in the demise of the final salary pension scheme. These schemes were becoming unsustainable well before Brown's 1997 rule change due to the factors the Yeo is quoted as mentioning above. The real reason why Brown is not a great chancellor, or even an adequate one is the vast increase in the cost of regulation to business and the bloated public sector on his watch. These factors are not immediately visible to the average voter however, so my sympathy for Brown in his current travail is limited.

Dan Crow, London,

The reason this is a scandal is because Brown behaved in his usual arrogant and deceitful way. He is the true master of spin and sleight of hand not Blair.
Yes chancellors have to make tough decisions and often unpopular ones. We might have a little more respect for Brown if he made them and made them openly and honestly, presenting them for what they are.
The reason they are called stealth taxes is because they are levied stealthily. This was a tax which few recognised for what it was at the time and which Brown levied because he could get away with it. It was a typical Brown wheeze. This is why people are outraged.
Ten years of New Labour has been revealed to mean lots of old Labour in fancy new clothing with a lot of deception and blame shifting as part of the package.
Mr Brown has continually ducked issues he finds uncomfortable. Does that make him fit to be a prime minister when the going gets tough on a daily basis?

Paul Owen, Birmingham, UK

I have been following politics for 45 years. Gordon Brown is the worst chancellor I can remember.

C Smith, Birmingham,

Surely the scandal of Mr Brown's action is that a contributor's paid income fund was 'taxed' and then any income due from the fund would be taxed again. I would alsodescribe that as stealth.

Ivor T. Macnamara, Plymouth, England

A jaw-dropping whitewash.

How can anyone quote Stephen Yeo's claim that there has been an unexpected increase in life expectancy with a straight face?

JM, Edinburgh,

Mike- Don't tar all columnists with the same brush- Ian Cowie hs been on to GB for years, particularly on the pensions front. One problem, particularly with Broadcast media, is that the interviewers do not have the necessary background and he runs rings round them.
The reason that the line about being the greatest Chancellor , is still trotted out despite all the evidence to the contrary that you have spelled out, is that it is his only valid claim to the leadership,surely?

Lily, Cornwall,

Never forget that David Cameron was part of the team that presided over Black Wednesday and this accusation is Tory propoganda to disguise the fact that they have no real policies of their own!

Simon, London, UK

Mr.Aaronovitch could you answer a simple question.

Did he take £5 Billion a year from the Pension Fund - YES or NO?

After you've answered that could you inform us all why you seem to think that Gordon Brown was right to assume that under the Stock Market only moves upwards rather than down. He was "gambling with the hard earned money of the British public..wasn't he?

This is my first post on any newsmedia site..I have my own and occasionally post in James St.George forum. I'd welcome a short and swift discussion on this if you ever find the time.

daz madrigal, manchester, lancashire

How strange that suddenly, years later, the media have discovered scandals, and how strange that senior civil servants (supposed to be neutral, but probably ex-public schoolboys) decide to break their cover. And the common thread ? Why, Gordon Brown, probably the next Labour leader. Not that I'm suggesting a media plot in favour of the charmingly vacuous Mr Cameron of course.

Tony, Crewe,

David,
You comment :-
"Since 1997 we have had no devaluations, no sterling crisis, no slumps, no mass closures, no negative equity, no real Black Tuesdays."
You are perfectly correct. You could have added huge improvements in the NHS and Educational infrastructure on a scale unimaginable in 1997. This, however, will not persuade those who are being swept along by the latest manifestation of the Asch effect - that New Labour has ruined the country.
Previous examples of mass delusion include :-
- The Earth is flat
- Princess Diana was a paragon of virtue
- England will win the World Cup again
Only when we have had another term of Tory government will the magic dust disappear from their eyes, and they will finally realise that 1997 -2007 was probably about as good as it is going to get.

arnoldo, Coventry,

If the comments here from readers in some way represent the views of the wider public then Mr Brown and Labour are in for a routing at the next election. The media seems to be lagging behind the population on this one.

Andrew Jones, Belfast, UK

"Since 1997 we have had no devaluations, no sterling crisis, no slumps, no mass closures, no negative equity, no real Black Tuesdays."

Mr. Aaronovitch, while I admire your frequent attempts to inject a valid alternative perspective on newsworthy matters. in this instance I am tempted to call it "devil's advocacy". What you have listed here is various forms of economic catastrophe that can be caused by Government meddling. The fact that the present Chancellor has limited his interference to increasing confiscation of people's wealth is not reduced by, to paraphrase the great Jim Bowen, "looking at what we could have (also) lost".

As for the Chancellor taxing us to pay for criminal justice, health, education, infrastructure, social security and defence, he leaves us with little left to pay for stab-proof vests, private dental and medical care, home tuition, gated communities, private pension planning and the costs of emigrating to the United States.

Kevin, London,

Some months ago a scientific survey estimated that some 110000 Iraqis died directly or indirectly as a result of the war. None of them voted for their liberation. This article treats Labour's was trivially and perhaps is symptomatic of those not involved in war to resist considering it's true horror. To suggest that Gordan Brown isn't all bad because not all of his tax raid was spent on blood shed is, in my view, truely revolting.

Jonathan A, Birmingham,

Shame on you Mr. Aaronovitch.

E Justice, Gateshead, England

Why do columnists persist with the myth that Gordon Brown has been a succcessful Chancellor? He inherited a golden legacy from Kenneth Clark - a strong pound, low taxes, government spending under control - and what has he got to show for his micro-management of the economy? Billions wasted on public services; the destruction of the private pensions industry (but not,of course the pensions of politicians and the public sector), doubling Council Tax and a huge increase in stealth taxes.
Couple that with the decision to sell of our gold currency reserves at the bottom of the market and you have a track record that a director of Enron would have been proud of.

Mike, Appleby, Cumbria

This scandal has its roots in the policy of the Tories to tax "excesssurpluses" on pension funds.
Now, in opposition, they,and the LibDems, failed to pick up and expose the effects of the change in policy. I speculate on whether this is deliberate or just incompetence.
Either way the House of Commons does not come out of the issue with any credit and the need for freedom of information and a questioning press is underlined once again.

LWCornfield, Melton Mowbray,

I await the headline with phographs of Robert Maxwell and Gordon Brown side by side "Gulity except for MPs and those who live in Scotland"

michael murphy, brightlingsea,

A balanced and correct view, I remember well the situation 10 years ago. My Co, as well as many others, took a pension contribution holiday since our pension fund was over funded. A few years later it became severly underfunded due to the colapse of the dotcom bubble. I remember also having to accept further charges to the fund since new actuary information made it necessary to provide for people living longer.
And finally, Brown didnt take any money from pensions, he stopped tax relief.

JAMES GALLAGHER, Montreux, Switzerland

Remember that the Times is NuLabour's house paper (more so that the Grauniad) and Aaronovich is just another NuLabour toady. David, you don't really believe this stuff do you? Brown might as well have burnt (our) money for all the effect his gargantuan spending has had on public services....and anyway, I don't recall being asked if I was happy to sacrifice my future pension income for better public services now !

Mike, Brighton,

That's it, Mr Aaronovitch, be patronising as hell because someone is old and female. Paying off government borrowing? Don't make me laugh. Why not devote your next column to just how much government borrowing has gone up in the last decade, in return for fairly negligible improvement in public services.

Orthopaedic waiting lists were reduced by throwing unnecessary millions at the problem, by the way. Efficient management would have minimised the cost - but no chance of that in the vast state-run NHS labyrinth.

kate, bridgnorth, shropshire

Why am I not surprised at this dismal attempt to justify this contemptible raid on pension pots to build tax earning only to fritter it away through poorly managed projects. Of course £50 billion is not a huge sum in comparison to overall tax earnings but it is a big sum for a pensioner who has been forced into penury during his retirement due to this raid. Mr. Brown's dismal failure is not just being an accomplished socialist taxing genius but also an equally socialist wasting incompetent. Mr. Brown will be hoping that Adenas of this country do not give up on him but this time he has consciously and deliberately chosen to make individual retirement that much more difficult for those who chose to save for old age (as good as punishing them for saving) in his social engineering zeal. Some one should tell Labour that its one thing to dream of equality across classes, another thing to implement it at home first. Stop this assault on middle class.

Prabhat, UK,

Brown may well be getting some flak that he does not deserve over his abolision of the dividend credit to pension funds,but he also extended this policy to pensioners who held small holdings of privatisation shares and who relied on both the dividend and the tax return to suppliment there income and that was both mean and unnecessary.
He also wasted much of the money he raised by not ensuring that once distrubuted to the various Public Sector Departments that people in these organisation were made accountable if the money was not spent on what it was intended for how many heads have rolled in the NHS over the way they have performed if a Tesco Store Manager ended up millions of pounds overspent how long do you think he would be in his job.

Dave, Mold, Flintshire

Yes, it was a stealth tax. Perhaps David Aaronovitch should read today's letter in The Times from Stephanie Hawthorne, editor of Pensions World, in which she says that "there was no pre-budget consulation with the pensions industry" and that this amounted to taxation without representation. I am sure I am not alone in finding Mr Aaronovitch's defence of the Chancellor unconvincing. It seems that Brown is at long last getting his comeuppance. Yours etc,

IAN GIRVAN, Dunkerton, Bath, England

Raising revenue with scant regard for the effect on the lives of ordinary people is nothing short of criminal to then to waste that money by giving it away without any control of what it was used for is sheer madness. Brown is a disaster, end of chat!

D Case, Newquay, UK

Surely there is a Scottish spending surplus, not a deficit?

Frank Upton, Solihull,

What an extraordianarly biased article. The facts are that it's not just a few billion pounds as you mention, its nearly £100 billion given the cumulative effects.

Furthermore the move by Gordon Brown to stop tax relief on pension funds contributed to the poor performance of the stock market.

If a tax that goes under the radar and only becomes apparant after a prolonged period of time and then only effects the population later in life when the changes are all but forgotten is'nt a stealth tax what is ?
As to the benefit's in other areas, Adena's friends hip replacement looks a little pricy at £100 billion would'nt you say Mr Aaronovitch ?

simon daglish, London, London

Ah,conviction politics.You can do as you like to ruin peoples lives as long as you thought it was right at the time.You have all been taught well by the Blair machine.Is there any room in this theory for responsibility and accountability?Is no one answerable any more for dubious decision making?Like Blair on Iraq,"I believed at the time it was the right thing to do"is not an accident of faith,it is a sign of poor judgement and should be dealt with as such.All words from our leadership seem to come from the same scriptwriter.Why did he fight the FOI for 2 years then release the information at such an opportunistic time?If you have nothing to hide you have nothing to fear.Nothing is going to change this governments disgusting attitude to the public except an election.I look forward to the peoples verdict on how we and this country have been mismanaged for 10 years hopefully starting in may.

JohnP, Newcastle, UK

er, he didn't abolish (tax) relief on pension contributions (made by savers) he prevented the reclaim of the tax credit on their dividend receipts by pension funds which are not liable to tax.

The comparison to the impact of Lamont's change is weak.

Before Lamont, a dividend of £100 used to have a £25 tax reclaimable credit (dividends are paid after Corporation Tax): total cash to pension fund £125. This was changed to £100 dividend plus £20: total cash £120. A 4% reduction.

Brown's change reduced this to £100. A further £16.7% reduction.

Brown's raid also changed the system in principal and effectively means that pension income is subject to triple taxation: once on the corporation whose equities form the fund; once in the pension fund itself by the imputed credit not being reclaimable and finally when the pensioner receives what's left.

Richard Boyce, HAYWARDS HEATH, UK

David Aaronovitch is like the three wise monkeys when it comes to Labour. How can a journalist be so biased and get away with it? Anyway, my main concern is the prospect of a post devolution Scot becoming Prime Minister. England has been served horribly by the cabal of Scots currently disfiguring its Government, so march for England on May 1st - http://www.justiceforengland.com

Richard, Kidderminster, England

There are many people who were 'outraged' at Brown's tactics long before this story broke. All one needs is a healthy dose of cynicism about politicians to see Brown for what he is - a rampant, old-style socialist determined to pursue is dream of creating a benefit-dependent nation by attacking those who he cannot currently control. It is simply a bonus to him that many of these same people are those whose stage of life means they have no time to recoup the damage he has done thwn by making other arrangements

Bob Finbow, Haverhill, England

Have any jobs been "created" in Ayr since 1997 (apart from public sector non-jobs?"

j j toogood, Cambridge,

Inflation is low? Who told you that? Do you actually live in the real world, or do you actually believe the drivel that is the official CPI and RPI figures, figures created from a limited basket of carefully selected products.

Look at the real truth: Massively rising fuel prices, disproportionately high council tax rises (for the same lacklustre service), water price hikes, postage price hikes, and crazy house price increases year on year. None of the above are as little as 2.9 percent each year, yet these are the things I spend most of my paycheque on.

Shane, Guildford, UK

So, David, you reckon that 5bil might have gone towards the reduction of Govt borrowing, do you? Frankly, that worries me. For Govt borrowing thn went up again, there was more borrowing or mortgaging through PFI, and of course private debt has escalated in the last ten years. So, though I'm no clever clogs, I can't help asking myself in the New Lab economic miracle is all smoke and mirors. Are we living on toc and what happens when the day of account comes? Also - en passant - why is it that we're going mad on devolution and separation while the canny Germans went for reunification?

Madena, Crouch End, England

Mr Brown did not abolish tax relief on pensions contributions . He abolished tax relief on dividends to the funds.. Get it right Mr Aaronovitch.

The Mansion House mafia had been warning that Fund Managers were getting above their station and threatening their turf. Gordon was the one found with the knife in his hand and we all know what happens to those people.

michael murphy, brightlingsea,

Wasn't the reduction in pension credit from 25% to 20% to coincide with the introduction of the new starting rate of income tax of 20%?

"You might have thought that Mr Brown was “a very good Chancellor” because Britain’s economy has continued to grow during his stewardship, unemployment has fallen and inflation is also low."

The above statement needs to be balanced with; growth has been as a result of consumers spending their savings (equity and fiscal) and the influx of foreign workers; unemployment is falling because 12% of the eligible working population have 'fallen off the radar' and are no longer counted, if you are a youth from the inner cities then you could be 'enjoying' 40% unemployment rates - some achievement; Inflation is only low because the government has changed the measure of choice to CPI, there isn't a person in the country 'enjoying' there personal level of inflation at 2.8% - if so please step forward.

David Kelsey, Churchdown, Gloucester

It is Scotland's oil!

Bill, Glasgow,

It’s good to see this matter discussed from another perspective in the same newspaper that broke the story.

A balanced conclusion with bias to fairness is only possible if different views are considered.

dr venables preller, Warminster, UK

Thank you for your balanced view of Gordon Brown.

You might have gone on to comment on the Chancellor's removal of the 10% tax band, which has been widely criticised. In the case of pensioners like myself this has been compensated for by an appropriate increase in the tax free allowance, so we are not worse off.

R A Poole, Wolverhampton,

Brown has run the economy on credit expansion and excess liquidity - he seized money from pension funds, imposed auction taxes on mobile phone companies, and thereby brought the British Sock Market to be one of the worst performing. He used PFI to reduce Gilt issuance and thus left pension funds with nowhere to invest save to sell share portfolios to foreign corporations or private equity; and then to invest in property.

He has given us unfunded public sector pension liabilities of £685 billion comfortably above total public spending in 2007 so he must renege on public sector pensions as the private sector has reneged on its commitments.

As an example MPs and Civil Servants should go to Money Purchase Schemes and have their schemes wound up

Observer, Peterborough, England

Some of us were outraged 10 years ago by this change to tax relief. The national press failed us then by not realising the importance of this action and raising the level of public debate.

Colin Percival, Pedreguer, Alicante, Spain

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David Aaronovitch

David Aaronovitch is a writer, broadcaster and commentator on international politics and the media. He writes for The Times Comment page on Tuesdays. He has previously written for The Guardian, The Observer and The Independent, winning numerous accolades, including Columnist of the Year 2003 and the 2001 Orwell prize for journalism. He has appeared on the satirical TV current affairs programme Have I Got News For You and made radio broadcasts on historical topics