Camerons First Term

Has Cameron's Chancellor of the Exchequer, decided the next general election, because of the Granny tax.

For those from foreign parts, in this weeks budget, he sneaked in reduction of the tax free allowance for pensioners. Because of the way it works he has hit the people, who are not rich, but have organised a reasonable level of pension to live on in their later years. And at the same time given more money to those who haven't saved.

He seems to have not noticed that for the next few years there well above average numbers joining the pensioner generation. Therefore if this government runs its full term of office the will be over 2 million more pensioners, of which at least 50% will have a significant income decrease.

This is on top of last years decision to decrease the annual rate of rise in goverment paid pensions. That is to doctors & nurses, teachers, civil servants, emergency services etc.

Has Cameron's Chancellor of the Exchequer, decided the next general election, because of the Granny tax.

Budget documents show that, taking inflation into account, this will leave 4.41 million people worse off, by an average of £83 a year in 2013-14. People due to turn 65 after 5 April 2013 could lose up to £322 annually.

The chancellor told the BBC that, with the personal tax allowance being raised "rapidly", it would have eventually overtaken the over-65s allowance anyway.

The Granny Tax is all smoke and mirrors and complaint by Labour and the pensioners who think it will hurt. As a pensioner who will be affected (right age too) I am of a completely different view, based of fact not perception.

The Granny Tax is a freezing, not a reduction, in the Age Related Personal Tax allowance which will kick in in April 2013. So, it will not affect anyone during this next 12 months. When it does tale place there is a freeze on the Age Related Personal Tax allowance, and it will not be uprated as in the past and is frozen at the current allowance. This will continue until the average Tax Payers Tax Allowance has caught up to the same value.

People drawing their pensions, such as myself, have a extra £2,325 Tax Free allowance over and above those working during the next 12 months to April 2013, and, many, having the same income as us pensioners.

It is the loss of this potential additional Tax Allowance these people are moaning about, and any real pain it is still 12 months away.

When next year's Tax Allowances are inplemented in the first week of April, 2013, then the Pensioner Tax allowance advantage falls to £1,295. This means Pensioners are paying an extra £83 tax per year (on average) - big deal.

It seems to me that pensioners, and Labour, wingers are interested in a good story rather than the truth.

Moreover, pensioners, as a group, have, up until now, been well protected from the Austerity Reduction.
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It's good to be back amongst friends and colleagues

Moreover, pensioners, as a group, have, up until now, been well protected from the Austerity Reduction.

Based on the decomposition of the differences between these measures, further analysis in this paper suggests that a plausible range for the long-run difference between RPI and CPI inflation is around 1.3 to 1.5 percentage points (Table 3.1). For the basis of our November 2011 EFO, we assume that the difference between RPI and CPI inflation is around 1.4 percentage points in the long run. This represents the mid-point of the plausible range of estimates set out in Chapter 3.

Moreover, pensioners, as a group, have, up until now, been well protected from the Austerity Reduction.

Not if your pensions come from government coffers (civil servants, emergency services and teachers etc.) as the increases from last year were reduced because they now use CPI not RPI. On average, governments figure, difference is 1.4%.

Based on the decomposition of the differences between these measures, further analysis in this paper suggests that a plausible range for the long-run difference between RPI and CPI inflation is around 1.3 to 1.5 percentage points (Table 3.1). For the basis of our November 2011 EFO, we assume that the difference between RPI and CPI inflation is around 1.4 percentage points in the long run. This represents the mid-point of the plausible range of estimates set out in Chapter 3.1.

Which means, if I live another 20 years my pension increases, at that point, will be 34% less than first promised.

John makes a number of very good points in his posts. Pensioners will be a little bit worse off in years to come but not substantially as he quite rightly points out.

However, Labour and the Red Top Tabloids will seize upon this and bang the drum about a "Granny Tax". What worries me is that this large section of the potential vote will believe what they read, and maybe vote accordingly.

That is why I still believe it has been a political shot in the foot.

That is why I still believe it has been a political shot in the foot.

I quote from the 2011 Armed Forces Newsletter 2011

2011 pension increases
In June 2010 the government announced the intention to link increases to the CPI. If this receives parlimentary approval the full incease will therefore reflect the rise of 3.1% in the CPI for the 12 months ended 30th September 2010, which has always been the month used for this uplift.

The change from the RPI to the CPI indexes was simply a cost cutting measure by the Government. They had to make cuts to save money and this was just one of them. With the percentage of of over 65 pensioners growing every year it was a large future saving.

I have said it before and I'll say again, that viewpoint is going to bite them in the bum.

Man, what a muppet! Whatever happened to statesmanship? Don't politicians know by now that the media will always be all over public figures?

Or haven't they got the kudos to hold a brave face?

Cash for Access

1st term looking a bit shakey.......
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Every Prime Minister of whatever party has more than likely hosted private dinners for influential donors, it's called lobbying. I'm old enough to remember PM Harold Wilson unashamedly galavanting about wearing a Gannex Mac when his close friend and donor was Baron Kagan.

If you wanted to donate a certain sum of money to the Labour party, I'd be very surprised if you didn't get offered a private dinner with Ed Milliband. People might have the ear of senior political figures, but I would think it unlikely that large donors would influence Government policy to any great extent.

Fully aware of that fact but I did give a clue in my post.....

"Or haven't they got the kudos to hold a brave face?"

All that was really needed to make that photo go viral is a baby's dummy!
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Your choice of avatar confirms your dislike of parliament and politicians, but luckily for you, his fate would not befall you in the 21st Century. :-)

Your choice of avatar confirms your dislike of parliament and politicians, but luckily for you, his fate would not befall you in the 21st Century. :-)

At a General Election the political parties publish their manifestos detailing the legislation they would intend to enact if elected. The electorate then vote for the MP's of the party they want to form the next Government. Consequently people will then expect the Government to carry out, within reason, the contents of their manifesto.

No Government would remain in office if millionaires and businessmen with vested interests, could openly change the policies upon which they were elected. However any Government would be foolish not to listen to the views of influential sections of society, and that is done via lobbying. Policies won't get changed but may well be appropriately amended if it is clear that there would be widespread objections during a Bills progression through Parliament. Some minor legislation may also be put on the back burner if there seems little support for it.

But don't let's be naive here, if a rich industrialist gave 1/2 million pounds to a party, they would "expect" something in return for it. That would probably mean a few dinners with senior Ministers allowing them to put their viewpoint on existing and proposed legislation. There are now talks going on about putting a cap on future donations which would apply to all parties across the board, and legislation could be introduced regardless even if agreement is not reached.

Political parties need to be bank-rolled to campaign during General Elections and fight marginal seats, that is a fact of life, but it does need to be more transparent. But there is another issue as far as Labour is concerned that also needs addressing, and that is the way in which trade unions collect and pay affiliation fees to the Labour party.

"Cash for Access" is is one thing, what was worse was the "Cash for Honours" scandal 2006-7 Honours. Politics is gradually getting cleaned up. We have now had the MP's expenses fuss and they won't be doing that again, now the donations set-up is being looked at. But it does need to be remembered that the vast majority of MP's are hard working individuals for their constituents, but there will always be those that let the side down.

....and these "talks" don't influence decision making? Don't be so naive my friend!
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....and these "talks" don't influence decision making? Don't be so naive my friend!

However any Government would be foolish not to listen to the views of influential sections of society, and that is done via lobbying. Policies won't get changed but may well be appropriately amended

Never said you did. However, News Corp comes to mind. Within the past 50 years, just how many "influencial" lobbyists had their "hands on the tiller" so to speak?

Just how much tax evasion/avoidance did they manipulate.

We know that there are indeed, many good hard working MP's in & out of government but it is all going to waste for the simple fact is.....

...the system itself is corrupted!
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