ostears

While the WASPI campaign was lobbying for redress on the Great Pensions Welch last year, Osborne delayed a planned corporation tax measure that could’ve paid for it twice over

There are 500,000 British women born between 1951 and 1956 who have been cheated out of what the State promised for fully 40 years of the term. Having paid up to 30 years’ worth of NI contributions already, some changes were mooted in the mid 1990s. Minimal (and spuriously targeted) publicity appeared sporadically after 2001. 95+% of those affected did not receive any personal communication about the changes until well after that date. Most of those affected found out after the 2011 Pensions Act at last made clear what they were going to be. That gave the median sufferer 3-4 years to prepare. But in the 2011 Act, the date of effective application of these changes has been brought forward again. This despite the findings of the Turner Commission recommending a period of 15 years’ notice be given to the pension changes.

The additional elements of the saga outlined above serve only to further evidence the chronic need for mitigation of both Brown and Osborne policies since 1997. With or without these factors, however, the axis of misleading drivel perpetrated by Ros Altmann, Frances Coppola and others is – along with this dissembling Government of corporate-licking spivs – forced into lightweight explanations and contorted rationales for one obvious reason: the form and timing of the move has no moral or accountability defence whatsoever.

Today, however, The Slog presents new evidence – unearthed by drilling into the detail of the final Budget proposals – to show just how mealy-mouthed Osborne and his Treasury staff have been.

Two months ago today, the virulently anti-Labour Daily Telegraph had this to say about the issue:

‘Instead of trying to tough it out, the Government should now make realistic and fair changes to the increases in the state pension age’

The Government didn’t bother to turn up at the Commons debate, which would probably not have happened in the first place without the tireless passion of SNP newcomer Mhairie Black. But this is what the DWP’s Ros ‘Jewels’ Altman had to say in that same edition of the Telegraph:

‘Our pension reforms will give everyone a better retirement. It was vital to make the state pension simpler, fairer and sustainable….The new state pension will leave many people better off than they would have been under the current system, with many women receiving more state pension under the new system.’

It’s an interesting combo of one big lie at the beginning, vague words like ‘many’ in the middle, but by the end, no mention at all of the 50’s woman Welch. This is because, both the DWP and the Treasury has chosen to ignore it.

The WASPI goal is to get relief now for the women who were not written to in time and/or have the longest time to wait for their pension. This is, I assume, based on the assumption that the cost of equalising pensions by 2020 for both genders and mitigating the most hard-pressed ‘losers’ immediately is out of the question on cost grounds.

I have always felt this to be far too defensive. What I’m about to reveal should confirm that view; but even then, a phased solution is still practical at almost minimal cost.

Funding 500,000 ‘new’ (ake defrauded) female pensioners tomorrow would cost almost exactly £3bn going forward.

It sounds like a lot, but perspective is needed here: the cost of an HS2 nobody but the Prime Minister wants has leapt tenfold to £64.2bn; yesterday, the FT estimated that the costs to the UK of corporate tax avoidance/evasion are respectively £50/£70bn; and in the ten months since the 2015 Election, the annual cost of EU membership has already risen by the very same £3bn.

Be certain of one thing: this Government is not taking fiscal decisions based on dire necessity; it is doing so based on highly questionable priorities.

One thing George Osborne could never be accused of is giving a low priority to Big Business. But to be fair, in the Summer Budget last year he announced he was going to ‘get tough’ on receiving their corporation taxes in on time. CT payment dates for companies with profits in excess of £20m paying by quarterly instalments would therefore be brought forward, starting in f2017.

But in the interim, something seems to have happened. In September, a formal letter to David Gauke, financial secretary to the Treasury, rounded off some furious lobbying by the CBI regarding the CT measure. Attacking the ‘lack of consultation’ (ironic in the WASPI context), the letter’s content trotted out the usual suspect: the measure, it said, ‘sent a confused message to multinationals looking to move business activity to the UK’.

For the banks, HSBC’s Stuart Gulliver led the charge by saying this would add to existing £25m+ levies on profits. Lo and behold, head of the Bank lobbyist BBA Angela Knight was duly given a Treasury job in early December.

As a result of these and other machinations, we discover this little gem, having ploughed through 69 pages of 2016 Budget measures:

‘Deferring Corporation Tax

At Summer Budget 2015 it was announced that corporation tax (CT) payment dates forcompanies with profits in excess of £20m paying by quarterly instalments would be brought forward by four months, effective for accounting periods beginning on or after 1 April 2017. This measure puts back the change in due dates to accounting periods beginning on or after 1 April 2019. This will give businesses more time to prepare for the transition to the new payment schedule.’

So international big business and banks get lots of transition time, but not loyal pensioners with 30 years of NI payments behind them.

The cost of this cave-in to lobbying is a whopping £6.5bn…more than twice the cost of redressing the State Pension fraud totally and immediately.

In the light of this inquity, I would respectfully suggest to the WASPI senior movers that they have nothing to apologise about. But why be extreme when you can be reasonable? Look at some of the other ‘priorities’ Osbollocks put ahead of pensioner destitution:

  • Freeze on fuel duty – £435m
  • Relief for oil companies – £265m
  • Freeze on alcohol duty – £85m
  • New rights to buy   –   £35m
  • Tax cuts to personal allowance & higher rates – £2bn
  • ISA savings allowance – £170m
  • Not investigating senior mgmnt tax fiddles on loans – £260m
  • Reduced corporation tax – £1.1bn (2020)

Fuel duty freeze and relief for oil companies – £0.7bn…after the way they ripped us all off over the years? A further £1.1bn cost of yet another cut in CT?

My suggestion is this: the Government lie about “having to wait a further 18 months for a State pension” is in fact SIX YEARS for women born in 1955 or later. That should be cut to one year from 60th birthday with immediate effect. For the 150,000 WASPIs involved in that, there is a 50% duplication with more women who have no partner, private pension or other means of support. That group should now get their pension immediately, backdated to 60th birthday.

The remaining 175,000 WASPIs not in either group should have their delay halved, as a penalty levied on the Treasury for ignoring the Turner Commission. This would mean that all those who were, say, 60 in 2011 will get their pensions immediately, backdated to 2013.

The total cost of this in the coming fiscal would be in the region of £2.4bn. As one can see from the list above (by no means exhaustive) there is plenty of fat in there.

Do you find this harsh? I would say “harsh but fair”. But if you doubt that, think on this: during that same Summer budget, MPs gave themselves another pay rise. As a result of this, an MP needs only 15 years service to wind up with a pension of £25,148 pa at age 55. And that, dear WASPI reader, is the difference between your State Pension, and their State Pension.

NB This isn’t the end of the unearthing wriggly pension worms in the latest Budget proposals. Stand by for more in the coming 24 hours.