Convincing the rebels
It was meant to be ministers' trump card.
The hole in the Royal Mail's pension fund is so big that they've been warned the company is "balance sheet insolvent" and postal workers wouldn't get their full pension if the scheme was wound up.
Ministers released the letter from the pension fund trustees on the eve of today's demonstration by the postal workers union against part privatisation.
The letter's message is clear: "How can a union and Labour MPs protest when we're coming to the rescue of the posties pension fund at the very moment many want us to scrap cushy public sector pensions?"
Rebels may reply "we'll take the pension protection without the privatisation, thanks".
By starting this bill in the Lords, ministers have given themselves a couple of months to try to win the argument with almost 140 rebel Labour MPs that the taxpayer cannot be asked to foot the bill for reforming Royal Mail as well as paying its pensions.
The problem they face is that numbers have almost lost their meaning these days - after all, what's £7bn at a time we're spending £1.3tn on bailing out the banks?
PS Forgive the shameless plug, but you can catch up on the first of my programmes, the Prime Ministers, by listening here.
I'm 
© MMIX~RS~q~RS~~RS~z~RS~39~RS~)
Comments
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Has anyone seen my nose? It's around here somewhere!
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Nick you can be forgiven a shameless plug in light of what is truly shameless namely this governments financial efforts.
Or perhaps that should read blameless.
That is how Brown would have us believe it is.
Nick you once delighted in telling us how Labour responded "where's the money coming from" everytime the Conservatives made a proposal.
Why do you now not ask Darling and Brown the same question every time they annouce a new wheeze on how to spend 2030's tax bill
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Mandelson.
Deripaska.
Tariffs.
LDV Bailout.
Any news Nick, or still head in the sand time?
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The theory is that 1.3tn's a massive loan to the banks, not a write-off - unless you consider the banks are fundamentally balance-sheet insolvent as well.
Someone's bound to take you to task over that "what's 7bn?", so I might as well. That 1.3tn's not just a year's income, it's something like the entire lifetime savings of every man woman and child in the country. If it's just become funny-money, then it's not just the Government become morally bankrupt, nor the Royal Mail and banks balance-sheet bankrupt, but the entire nation just been flushed down the pan with a careless so what?
We really expect something a bit more spirited from you - we're getting very close to serious trouble from people with nothing left to lose.
If you want something useful to post, start making a depth gauge to find the bottom.
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Nick,
I have a solution. Let RBS take over the PO and then they can lend the pension fund the GBP7bn they need (for now) to prop up the pension fund. That way it's covered by the toxic loans guarantee and everyone's happy.
Plus, all the RBS branches can double as post offices and the old post offices can be sold to KFC for their new restaurants.
Bingo.
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Does Meddlesome think we're all as mad and stupid as he is?
If the pension shortfall is as dire as is suggested, in this time of GLOBAL economic depression can we really afford to rely on a FOREIGN owner of the post office paying in an enormous amount of money to stabilise it? Specially if their alternative is to make the workers redundant and throw them on to state benefits anyway?
Maybe he should ask El Gordo to keep an eye on things for him.
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There should be an inquiry into where that pension money went.
Why is there such a black hole?
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Where is the regulation to plug the gap in the pensions hole? Surely any business that had a hole that big would have administrators or massive fines or something from government. This is a complete disgrace that the posties will potentially suffer a loss of pensions for the coming years because Labour have failed them and not made sure the pensions were covered.
I'm not sure but are they final salary pensions though? If they are then along with a lot of other people, these will have to stop.
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Nick,
this is disgraceful. The government must face the commons immediately on this issue. There must be a vote, now, which I can only hope the government loses, and then a vote of no confidence.
This must be brought to an end. It is totally unacceptable.
Trouble is I can see the international crisis getting worse, then Gordon may well bring in a who rules the country, as the people take to the streets.
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Nick,
where is Miss Trimble when we need her so much. Trimble for Prime Minister, she would seem to know an awful lot more than Gordon Brown.
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Nick you once delighted in telling us how Labour responded "where's the money coming from" everytime the Conservatives made a proposal.
Can I be his teapot?
This is just endless bad news. We are broke and staving off depression by unimaginable borrowing. This will prolong that DEPRESSION. The State will run out of money for the wages bill and pension liability, eventually. As for pensions, how many like me were ruined in 1997 by Brown's ill conceived pension grab? I wonder what will happen when the power goes off. No TV, internet, nothing.
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There is nothing wrong with shameless plugs Nick.Having said that I would never be so crude as to shamelessly plug the phantasmagorical rock band Lincoln City at anyoldfun!
Seriously though, the Royal Mail and Pensions together. How big a yawn are we going for here?
Much more interesting the ICM poll in this morning's Guardian highlighting the fact that most people think Labour would be better off with anyone but Gordon.
I couldn't agree more. Just when you think that you have finally flushed away the Blair Bush era you look down and what do you have. Not so much a floating voter as a floater.
Perhaps Gordon could take over the helm at Royal Mail from his £1million a year fellow Scot and Heriot Watt graduate Adam Crozier. Having single handedly destroyed the private pension industry Gordon could now spread his financial expertise elsewhere in a way that isn't quite so harmful to the country.
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This is just new labour spin.
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In my opinion, the ongoing saga of the Royal Mail neatly encapsulates the contradictions at the very heart of 'New Labour'.
A couple of years back, Leighton and Crozier presented the Government with a plan to turn the Royal Mail into a partnership ala the very successful John Lewis Partnership.
The Government said no.
You would think that the one thing a Labour Government would be keen on is empowering the workers.
Obviously, I am completely confused as to what a Socialist Government really means.
Are you?
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Might the best solution be just to take the whole thing into state control?
The employees would all become civil servants. Since public sector pensions are essentially an unfunded ponzi scheme - they are paid from current income rather than from the saved funds of the contributors - the pension number would magically disappear. Hey presto!
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OH......call an election, please.
And don't rig this one like Glenrothes.
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DEAR NICK
iTS OKAY TO BAIL OUT THE BANKS BUT NOT ldv----
typical ---- 6000 out of work, and labour could not care less
I always wondered why Mandelson came back in favour, now we Know, The Government knew more than they were letting on about this Crisis,
What is so Bloody annoying is that Politicians still refuse to say sorry, when the whole dam business lies at the feet of Gordon "Stalin" Brown.
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This is a complete and utter disgrace. What a shambles!
Is there no incompetence, no sick or devious trick this repugnant government will not deign to commit?
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"Rebels" is a politically loaded label, implying wrong-doing...
Aren't these "rebels" merely MP's who are doing their job properly and representing their constituents, sticking two-fingers to the party heirarchy who are out of touch in this particular instance ?
If so, can we have more rebellion please !
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9. At 11:10am on 24 Feb 2009, T A Griffin (TAG) wrote:
Nick,
Trouble is I can see the international crisis getting worse, then Gordon may well bring in a who rules the country, as the people take to the streets.
=====
Let Nick stay in his middle class, taxpayer protected, cosseted little number with the BBC. He's comfortable and why the rabble keep having pops at him is just unbelievable.
The BBC is either in complete and utter denial as to the seriousness of the 'downturn' (makes you laugh, doesn't it!) or they are simply ignoring it. The anger that is building up in the private and, now, semi-private, sector is palpable.
The lid is going to come off - and soon - if this gets much worse. And it will - much, much worse.
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Well said, Nick, as one of your most ardent critics, I am rereading through some of your recent postings with a greater understanding.
Who are these people running these organizations and allowing them to get into such a mess?
http://news.bbc.co.uk/1/hi/business/3115042.stm
Beware the City merry-go-gound indeed.
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Gordon is so out of touch now, I wouldn't be surprised if he didn't use the remaining gold reserves to buy 'tulip bulbs'!
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This comment was removed because the moderators found it broke the House Rules.
I'd bet a pound to a penny that a good part of the pension 'black hole' is due to the stock market having crashed back to where it was when Blair was first elected !!
A lot of the pension fund is likely in shares, shares go up and down - a short fall today means almost nothing... The fund is expected/designed to grow so it delivers when it is needed.
To put a size on any 'black hole' is relatively meaningless.
Keep looking ahead Nick, ignore all the chaos and destruction around you if you pretend it doesn't exist, maybe it will all go away huh?
Did Mandleson deliberately do this now just to give you something to write about??
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Okay I am slightly confused I understand that a number of the posters are frothing with rage, but what do they think we should do? Not privatise part of the RM, meaning the taxpayer has to foot yet more money (I thought most of us were against bailing out people with our taxes)? Fair enough but after RM where do we draw the line?
It is pretty simple where the pension fund has gone, the DJ Index has lost almost half its value in the last 12 months (13,000 points down to about 7,400) the rest of the markets have done the same, so any pension fund investing heavily in the stock market will have suffered. Of course they could have used hedge funds and shorted positions, but remember shorting banks drives them over the edge and is slightly limited these days. If the Government is going to safeguard the posties pension then they should safeguard mine, which has also lost money this year. Hey lets protect everyone’s, I’m sure that’s not going to be expensive!
I understand the anger, good old Gordon stole from the pension schemes then seemed to flush the money down the toilet, but accepting that what when the stock markets are down and the interest rates are rock bottom are we meant to do? Constructive criticism is so much more effective than just adjusting the same old rants!
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Who cut the pension funds dividend tax credit for heaven's sake?
Why are you insulting our intelligence with articles like this?
Gordon brown cut the pension funds dividend tax credit and now the Royal Mail pension fund has a black hole.
What goes around comes around and everytime this government turns it runs into a giant steaming cowpat.
Every problem that now confronts them is fo their own making. Gordon Brown made this mess of the pension funds and newlabour should get off their backsides and kick him out before trying to sort it out.
Keeping Gordon Brown in power to shamble along will send newlabour to a ringing defeat because they will be damned with failing to stop the rot within their own tribe.
Call an election andi n the name of God go.
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If we are taking over the pension problem why are the government (Mandy/Brown) so keen to sell it off? We hear all this chatter about saving our companies and now they are just going to let more of bits of our family silver go to foreigners.
Shame on you Brown for letting the country get in such a mess. Our infastructure and utilities now belong to those who do not live here. This really is maddness economically, and it gives others huge contol over us.
They are the Know Nothing Party.
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So why do the Posties get special preference on their pension scheme when the members of Equitable Life have to wait for years and years and then there is talk of the deserving few...
Surely not an issue of demographics and voting patterns? If the Post Office's pension scheme is not underwritten by the government, can we please ensure that there is equal treatment with the shabby treatment of Eq Life pensioners, many of whom have died before even a remote prospect of compensation.
Certainly my father was reduced to playing the lottery in the forlorn hope of winning back some of his losses on Eq Life - and all he had done - like the postmen - was to save responsibly, as requested by the Government - for his (and my mothers) retirement.
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The Royal Mail (ex.GPO) is a British institution that we should all be proud of.
The UK desperately needs strong communities, and the Royal Mail supports the Posties who provide a stable, socially important element in our society.
The government should be STRENGTHENING it, not COMMERCIALISING it.
It's not rocket science.
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Nick
The lack of effective regulation has allowed companies to neglect their pension pots. Royal Mail's is in a parlous state, but quite a few others are facing shortfalls as well.
And it all comes back to one person - yep, the Golem did not do his job. Responsible companies funded their pensions but posted lower profits as a result. Profligate firms have not funded their pension pots as well. Didn't Royal Mail pay large bonuses a few years ago on the back of huge profits?
Of course the Golem as Chancellor was busy lapping up all the tax revenues. Personally I do not think he has ever cared for the humble worker's welfare.
I seem to remember when the Scottish Omnibus group was privatised, retired bus drivers were set for a huge windfall for the company pension pot. The Golem had other ideas and ruled that the excess should stay with the Treasury.
There was much wrangling since in the Scottish parliament, as English bus drivers did benefit from their windfall. In the end there was a messy compromise involving ex-gratia payments.
Btw who is stupid enough to buy Royal mail at this point in time? Remember selling gold reserves at rock bottom prices anyone?
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Dear Nick,
Nice story from your (HP)source, another Robert Maxwell to blame is there?
Now how about yesterday and LDV? Why was my comment about this rather rotten smell, removed and blamed on being 'offensive etc etc'???
A British company is goin to the wall and no one is going to do anything, so much for 'enterprise'!
Is this old British company going to the wall because a few miilion of her maj? Banks are getting buckets full daily but not BRITISH JOBS WITH BRITISH WORKERS though.
Just asking.
Xxxx
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26. RobinJD:
"Who cut the pension funds dividend tax credit for heaven's sake?"
Right. Brown and Labour should never, ever be allowed to forget the pension raid and what this has done to millions of prudent people. They have pinched GBP 100bn from pension funds since 1997 - and then they are surprised that pension funds are in trouble!
Pension funds, the BTL fiasco, the stock market crunch and, latterly, lousy interest rates on savings. If they had set out to penalise prudence, they could not have done a better job!
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Let's all sing together ...
"You say a million, I say a billion, you say a trillion, I say a squillion ...
Million, billion, trillion, squillion ...
Let's call the whole thing off ..."
(with apologies to Louis Armstrong)
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Some bloggers have mentioned the words 'Ponzi' and 'HMG' a number of times, usually in the context of recent bailouts and the NI scheme.
Calm down, calm down.
This isn't any old Ponzi scam, this is an HMG Ponzi scam, where there is a crucial difference.
Ponzi and his admiring followers down the decades right up to Madoff and Stanford, did not have the ability to print money so eventually their plans came unstuck ... but HMG does.
As journalist Dominic Lawson (who I cribbed this from) says 'Eat your heart out Ponzi'.
Interestingly, Stanford did come pretty close to being able to print money by virtue of owning banks and somebody thinks its a good idea to let a certain R. Branson have a banking license?
I wonder what journalist Tom Bowers (author of a revealing unauthorised biog of Branson) makes of that idea?
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#17. So true. LDV needs a £25 million bridging loan and is told to get stuffed! RBS probably spends more every year on toilet paper! Yes of course we can't let the banks go under or else we're all screwed but there are clear double standards operating here and that will stick in people's throats.
And you don't have to be a genius to see how the BNP will seek to exploit this "One rule for the fat cats, and another for the working man!"
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Privatise, privatise, privatise!
This could be the last gasp of the New Labour project!
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For several years now Adam Crozier and Allan Leighton have been taking large salaries and big bonuses for running the post office, while the people who make it all possible - ie the post men and women who actually stick letters through the doors - continued to be paid peanuts.
No doubt the pensions of Crozier and Leighton are safe and they will live in comfort for the rest of their lives.
Until this country starts to pay as much attention to the people who do the work as it does to the 'geniuses' that run business and the shareholders, we will always be in a mess.
If TNT can turn the post office round and make a profit, why are there not people who could be hired to do the job so the post office makes the profit?
But first things first - sack Crozier and Leighton who have failed completely
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Pension? what's one of those.
I have spent my entire working life so far (31 years and counting) working in private industry.
For most of that period, I have been paying into various pension schemes most of which are now worthless thanks to company bankrupcy, collapsing stock markets and finally government taxation.
These state employees have no idea how lucky they are - I will have to carry on working until I drop or face my final years on the state pension and income support.
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ref 17 FreeCornwall
The government will provide "economic" reasons why it cannot become involved in LDV. Here is a reason closer to home.
LDV is owned by Oleg Deripaska. Oleg's guests on his "super" yacht during the summer included Peter Mandelson and George Osborne. You may recollect that George spilled the beans on some of the "discussions" and was removed from subsequent guest lists.
Mandy. Osborne. Derispaska. Freebies on expensive yachts...
There are a lot of white van men out there. The government wants to drive carefully, and the Tories will be happy to keep mum.
LDV workers... you don't really think that you matter to this lot, do you?
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Hi Moderators
been checking my email inbox, but haven't had your email yet explaining why my posting #23 was referred.
There were only 3 words in it!!
(None was a swear word, by the way)!
Explanation by email please!!
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Try looking at this through the other end of the telescope. By taking on the pension fund liabilities, the Government will get their hands on the £22 billion pension fund assets.
They would then have the choice of leaving the £22b intact or using it for short term spending thus increasing the shortfall and adding to all the other unfunded public sector pension liabiltities.
That would mean opting for short term political advantage over prudent management of the economy.
Surely not ?
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Of course - the post office pension liability is nothing compared to the wider public sector pensions liability.
The government have been warned for years that they were under-couting the total unfunded pension liability.
http://www.thisismoney.co.uk/retirement/article.html?in_article_id=407513&in_page_id=6
So public sector pensions are a £1 Trillion problem of their own. Of course Gordon can still see no need to scale back the number of public sector workers or reign in their gold plated pensions.
The problem for future generations is worse, because Mad McBroon has also trashed the private sector pension schemes.
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39. At 12:30pm on 24 Feb 2009, Zootmac
I understand that Mr Deripaska's yacht, Queen K, is valued at between GBP60-80 million.
Why doesn't he sell that or raise a mortgage on it to buoy up LDV?
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#14
"Obviously, I am completely confused as to what a Socialist Government really means."
That's probably because we have never had one.
New Labour wouldn't recognise Socialism if it slapped them in the face with a wet kipper. Most of them are a bunch of careerist hacks, with no real political principles one can discern other than being in office.
Interesting that they are now discovering some backbone re. Royal Mail privatisation as they see electoral defeat and the loss of their seats / perks staring them in the face...
Or am I just being cynical?
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Speaking as one whose post office pension is due to start in 2015 I have a few points.
As far as i am aware the Post Office Pension Scheme is not largely tied to stock markets , however a sizeable proportion of the value is tied up in UK and overseas commercial property. Shopping centres and industrial estates and the like and their value is currently not much stronger than the housing market.
The main reasons why there is a short fall are two fold. First when the stock market was high in the 80's and the mid 90's the fund was theoretically overvalued and post office management took the opportunity to stop all cash payments in - which boosted their profit figures - which went straight to the government. If they had continued with the many milllions a year as they should have paid there would be a much lower shortfall now. Secondly as has been mentioned previously the tax regime changed by mr Brown in 1997 did a lot to reduce all pension funds and the post offices was no exception.
And for those asking yes it is a final salary scheme but based on 1/80ths so you have to work for 40 years to get a max pension of half your final salary. So for most workers who are ordinary postmen / postwomen this would mean 40 years of long hours on pretty low pay. I think you will find that civil servants are on 1/60ths and so have to work a shorter period to get max pension and most get better paid too.
Not all final salary schemes are alike!
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ref 43 yellowbelly 1959
The answer is that he like his yacht and has written off his 50 million investment in LGV.
The company hasn't made any money for him, he has calculated that it never will, and he wants out. A taxpayer injection would allow him to see the exit and, perhaps, return him a few quid to re-stock the champagne cabinet in preparation for Mandy's next visit.
Unfortunately for Oleg, Mandy cannot become involved because that might lead to accusations of financial irregularity.
Perish the thought.
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44. At 12:44pm on 24 Feb 2009, badgercourage wrote:
#14
"Obviously, I am completely confused as to what a Socialist Government really means."
That's probably because we have never had one.
New Labour wouldn't recognise Socialism if it slapped them in the face with a wet kipper. Most of them are a bunch of careerist hacks, with no real political principles one can discern other than being in office.
Interesting that they are now discovering some backbone re. Royal Mail privatisation as they see electoral defeat and the loss of their seats / perks staring them in the face...
Or am I just being cynical?
===
My local (Labour) MP, voted WITH the government and FOR Post Office closures, but spearheaded a LOCAL campaign to keep open a threatened Post Office in her constituency.
How politically expedient (i.e. hypocritical) is that?
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Robert Peston was nearly as breathless as Kate Winslett last night on BBC News when he was busting a gut to reveal a leaked letter about the Royal Mail pension deficit sent by the PM (Mandleson).
Another coup for Mr Peston or just a tool of the Labour Party?
When will the BBC wake up and realise Mandy is just using them for his own means? Last night was rather clumsy, even for him.
NuLabour have been in power nearly 12 years and during all of that time they have failed to get a grip of Royal Mail. It just about sums it all up about this govt. Behind the curve all the way.
Words just fail me about the way we have been governed by Labour. We are now living with the consequences of their total and utter mismanagement. I think the police are right to be concerned about the middle classes protesting this year. We have been taxed to the hilt, had our liberties seriously curtailed. Sooner or later they will push the electorate too far. We are now going to be lumbered with even
greater loans/ under writing to the banks
than has gone before which will have to be paid back by tax rises or cuts in public spending; but not until Gordon has gone back over the border and some poor other sod, of whatever political party, has to pick up the pieces and put it right.
Quite why Labour is picking this fight over the Royal Mail now, when there is so much opposition to the plan from its own MPs is rather curious. Perhaps there is some very bad news NuLabour wants to bury this Thursday? Just trying to undertand their mindset that`s all!
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Young Robinson, it's not numbers that have lost their meaning, more a case of the Golem not understanding money. The Golem has never had a real job, never owned a car, never lived in the real world. He doesn't understand money. It's like he's playing around with Monopoly money, chucking it around here, there and everywhere.
On Sunday he was saying that he was going to put "people first" and - in a record, surely, even for the Golem - come Tuesday he's chucking another £500 billion at the servants (banks).
It's such a shame that Edward I isn't around, he knew how to deal with Scottish Golems.
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Message 26 RobinJD
`What goes around comes around and every time this government turns it runs into a giant steaming cowpat.'
Excellent expression: a quite delightful turn of phrase!
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SaltaireSam @ 37
Adam Crozier and Allan Leighton had a plan, namely, the partnership model.
It seemed like a very reasonable plan to me, one which cleverly tapped the ethos of the Royal Mail business.
But the Government blocked it.
I do not know why, maybe somebody out there can inform us?
I suspect that Crozier and Leighton are very frustrated individuals in that they want to be part of a successful, thriving business but for some, almost certainly political, reason the dead hand of Government is upon them.
Well, actually the dead hand of Government seems to bear down on all of us these dog days.
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Nick,
I think we are entering the period of the inquiry into a war where nobody at the end could actually work out why it had started. Yes, it is my old favourite the War of Jenkins Ear, the war which you alluded to in your programme this morning, or am I wrong?
Another one of your analogies, or could it be a metaphor, never was very good at my formal english!
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36. At 12:06pm on 24 Feb 2009, deanthetory wrote:
Privatise, privatise, privatise!
This could be the last gasp of the New Labour project!
===
Padawan, have you completed your homework on Common Purpose yet?
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To those calling for an immediate election - I absolutely agree - that is what we should have. But we need to be very vigilant.
There is still some concern being expressed over the Glenrothes by-election, remember a crucial one for Brown.
http://news.bbc.co.uk/1/hi/scotland/7906901.stm
But as for civil disobedience, Nicks words from yesterday were prophetic I think, with the emphasis on 'wouldn't it?'
"the prime minister ordered thousands of troops to mass in Hyde Park. Some accused him of exaggerating the threat in order to whip up public anger and to bolster support for the government. Such a thing would be impossible today, wouldn't it?"
As for civil disobedience, again from yesterday -
55. At 11:43am on 23 Feb 2009, the-real-truth wrote:
"Brown isn't going anywhere - he hasn't waited this long to be beaten in an election!
http://www.guardian.co.uk/uk/feedarticle/8370470
A bit of civil disobedience along side the depression and we will have a national emergency with democracy suspended."
And why has the govt passed laws making it illegal to photograph a policeman
talking of which, I wonder which policemen they'll retain, not the older nationalistic ones loyal to the people of the UK that's for sure.
http://www.mailonsunday.co.uk/news/article-1153805/Police-face-mass-redundancies-despite-warnings-credit-crunch-crime-wave.html
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I live in the US now! I find this shocking! US mail service having issue but I don't think the government just going to drop them and run like brown wants to do.
Royal mail should NEVER be sold off! tho If it's costing so much and it's becoming a heavy wallet on taxs payers then Royal mail should reform. Even the union likes it or not. There need to balance the books somewhere but not selling it is the answer.
I mean look what they done with the national rail? it's a joke and it cost too much. Where there be share holder there be cost to pay.
Stuff like this we really need to have the commons to Question every judgment as i have no confidence in the government system anymore.
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We urgently need an election , the country cannot take much more of Brown ..smith and co . please someone start the ball rolling .
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Slightly off topic, but as so many posters have mentioned LDV and you have a picture of a van on the blog (not LDV I note), I wonder if any posters have actually driven an LDV van recently. If so they would probably realise that they are probably not the best commercial vehicles on the market and not a good investment for the taxpayer.
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48 Brian
"I think the police are right to be concerned about the middle classes protesting this year."
I don't think they will be too bothered about a few letters to The Mail and some heckling by the Womens Institute.
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Can you ask them next time they bring up the royal mail why the government allow work to be contracted out to what has been found to be incompetent,and more expensive to the tax payer courier style firms .
They have been undermining the post office and the royal mail for years.
The removal of books for benefit payments for example was supposed to cut costs,has it ??? bank transfers actually cost the tax payer more...
I can think of no policy that has come in over the last ten years that has actually cost the tax payer less money.
Part privatisation will be another one to add to the list of Major Fail.
And while we are on pension pots if final salary schemes are doomed then why are MP's still getting one.
IMO they should provide their own out of their not inconsiderable salary.
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FormerScouser @ 45
While I agree with much of your concerns, I'm sorry, but your last paragraph about other civil service pension schemes is incorrect.
There are two main Civil Service pension schemes:
"classic" which is the legacy final salary scheme, based on 1/80th per year of service like yours is, and
"premium" which is an AVERAGE salary scheme based on 1/60th per year of service.
The "premium" scheme is the only one available to staff joining the civil service and has been for about five years. Most older civil servants are on the "classic" scheme and like your Post Office colleagues are relatively lowly-paid and have to work a darned sight longer to get a decent pension.
The popular media image of fat-cat civil servants is representative of only the tiniest fraction of 1%, and in my opinion are likely to be mostly Mr Blair's political appointees from the late 90s when he was hell-bent on politicising the civil service to suit his own ends.
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Surely the answer is simple: the Treasury gives back all the profits Royal Mail made in the 90's & the beginning of this decade and the black hole is plugged.
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Perhaps those so keen to have the Royal Mail stay as it is restrictive practices and bankrupt pension fund and all would like to put forward a business plan showing how they would do it that does not involve even more taxpayers money bailing it out.
If the government were honest with the people they would tell us how bad a state the country is in and that we are going to have to face up to reality.
You cannot have what the country cannot afford to give you unless you are prepared to pay more for it.
Like the banks the whole country is in dire need of wholesale restructuring if it is to survive.
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There's an awful fascination about watching the Blair/Brown project collapse in such a spectacular manner.
A bit like David Attenborough sitting at the back of a cage, watching an indestructible snake eating his film crew one by one, while still making notes about the extraordinary creature. One which, moreover, he and the crew had nutured and tolerated for a decade before it consumed the whole lot of 'em...
Funny that Government has stated sternly that, in these troubled times, companies should put pension fund payments ahead of dividends.
Is that the same government that happily took dividends from Royal Mail Group, while the pension fund deficit ballooned to enormous proportions? Surely not!
The same government that kept chipping away at services that could be provided via the Post Offices? Surely not!
Good grief, Governments don't have many actual companies to run, do they?
If they had thrown out the daft idea that an ID card will stop fraud, terrorism, child obesity, (or whatever the latest justification is), and put a quarter of the wasted money into the Royal Mail pension fund, it would have had a bit of a chance to recover.
If they got out of the way and hadn't kept building boundaries on what could be done by RM and Post Offices, the organisation could probably have grown properly. But that's far too simple for a meddling bunch of commercial and financial illiterates.
Brown a while back: "You wonderful bankers are a credit to the UK, an engine of growth and a centre of innovative excellence". (Code: Thanks for generating massive corporate profit and lovely bonuses for me to tax!)
Brown now: "You pits of the earth have created a catastrophe. How would anyone expect the Treasury, BoE or FSA to notice that you've made us into a credit-bubbled mess. So forget the bonus culture (except for the one's you legally have to pay, the ones you probably will anyway, the one's I agreed for MY banks - NR... - and of course those for the valuable ministerial advisors and senior civil servants). You are a disgrace." (Code: There goes my legacy! Who's gonna want to hire a failed Chancellor? Who's gonna pay the advance for my memoirs? How did that Blair wriggle out of it with such impeccable timing???)
What a bunch. I can only hope their successors focus on delivering a few necessary things really well.
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What fun to watch!
Everyone knows that Nationalised organisations in the end do not work! No enterprise culture, not adaptive to change and consequent mediocre performance. Everyone also knows we (those few people left who create wealth) cannot afford to subsidise public sector pensions! So are labour MP's going to cave into old fashioned Post office trade union lobbying to maintain these nonsenses?
The sooner an election comes and this lot is thrown out the sooner we have a chance of having smaller Government, less bureaucrasy, regulation, and an environment more favourable to creating more private sector jobs. Which at the end of the day is better for the economy and therefore everyone.
I feel personally sorry for any post office workers threatened by privatisation or a cut back in pensions but as someone who has always worked in the private sector and been through lots of change i would say sadly welcome to the 'real world!' Why should you be any different?
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No 64, the Labour Party is more or less bankrupt (no surprise with a prize baffoon like Dromey as Treasurer), so what do you think will happen with the postal unions start calling?
He needs money to fight an election, you know.
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Why is there a " Black hole " in the pension fund ? Where did the money go ? Maybe you could ask the PM or his familiar (AD) if they know where it disappeared to. This pension scheme should now be closed to new members and replaced with a contributary scheme like the rest of us have to be content with. Government funded final salary schemes must become a thing of the past, unless the required monies are invested by the government where they can't squander it. Don't worry about the bill being voted down by Labour rebels Nick, they know which side of the bread has butter on it and will not bring down the government knowing an election will mean unemployment for most of them.
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As an employee of Royal Mail it is painful to see the decline of this business. I just wanted to put some facts and opinions on here:-
The Final Salary Scheme ceased in April 2008 and any pension earned by current or new employees after that date is Defined Contributions Pension.
Royal Mail is stuck between being a public service and a private business and is in nowhere land and this has contributed to the pensions scandal as well as the tax on pensions and the scandalous payments holiday taken by Royal Mail when the economy was in much better shape endorsed by previous governments.
I am angry that the Royal Mail Pensions head allowed details of the parlous state of the fund to be used as a political football as she has a duty of care to the pension members first and foremost and should have advised employees first not Mandelson!
With regards to TNT taking 30% ownership I would comment that they are in difficulties with declining mail volumes and also of note is in Germany they have a current court case in which they claim that the minimum wage is unconstitutional will they do that here?
Lets face it management of Royal Mail has been poor for a long time and Royal Mail's position has been undermined by the EU postal laws of opening up competition, which has not occured in the rest of the EU surprise surprise and the date for this has been extended to 2013!!
Royal Mail's hands have been tied with having to take on business mail taken by TNT and other postal firms at a substantial loss. Do you realise that Royal Mail has to deal with competitors mail, before our own work, which company would do that and at a substantial loss.
You are being sold a big lie by the government and the EU as to the benefits of privatising or partly the Royal Mail. You can expect larger price increases and before long universal service as it is will be reduced and the public will pay different prices for postage within the UK. Look at previous privatisations did the prices reduce of increase?
TNT are in it to make money pure and simple and if they take 30% of Royal Mail would that not be a conflict of interest and a breach of competition rules as they would have a say in what Royal Mail does which would directly affect other competitors?
I am not against private companies but Royal Mail has been around for a long time and the universal service is hanging by a thread people wake up to this as if this ceases the postal costs for the man on the street and companies will significantly rise just look at europe postal costs now ask yourself would you prefer to pay 37p for first class stamp or substantially more?
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The Governments role in Royal Mail is not unlike a scam that might have occured in horse racing in the bad old days. You are a trainer with a great winning horse. You see an opportunity to personally profit from the situation.
so you set about knobbling the horse's chances enabling you to sell a share to a friend at a knock down price.
1. you hand the horse over to the most useless lad in the yard.
2. you give the most nutritious part of its diet to the horse in the next box.
3. you hinder its training and development at every opportunity.
4. then you turn to the owner and say "this horse is not as good as you thought so I recommend you sell a share to this chap I know. He is a great manager and may take all the prize money and leave you with the running costs but at least the horse will start winning again."
another advantage to this strategy is that it diverts the owners attention away from the monumental cock up you're making with his other horses.
Who is Mr Mandelson kidding? Perhaps he thinks if the labour party can bring this country to a similar position as Royal Mail we will welcome his European management team in with open arms.
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Why all the fuss about Golden Brown wanting to sell of the Post Office. His predecessor President Blair did that when he changed the name to Consignia and then Royal Mail PLC (the clue is in PLC Public Limited Company).
Blair had been selling of the Post Office for years.
He sold the IT department, the catering department (Quadrant) the facilities department (RoMEC), the OHS department, plus I'm sure many more. There was no out cry then.
Now because all the Government have left are the high profile departments. there is public outrage
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Still not sure I have heard an answer on what should be done. Some talk about possibly dropping things like ID cards (good thing) to move into RM pensions (bad thing), personally I pay enough money into civil servants pension funds (I know this is not the case with RM – but the grievance still stands), strangely they have never offered to pay money into mine.
With the best will in the world the Royal Mail would not be the first company to suffer poor investment decisions when it came to pensions and few others get even a sniff of a bail out. It is sad and it is a poor show, but it looks increasingly likely that the money I have put into my own pension is going to give me a pretty poor pension making it almost a pointless waste of my time, I might as well spend my money having a good a time as possible hopefully pegging it before I get a chance to retire. I am not alone. What has happened to the Royal Mail is terrible but other than crowing about the cods job Brown and co have made I hear little discussion on how others think the matter should be handled.
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I think Gordon and Mandy started in America.
There, I feel better now.
Not our fault.
They couldn't run a whelk stall.
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Dustin #57. Yes I've heard that said by a lot of people in the industry. My point is about the double standards where more money is thrown into the seemingly bottomless pit of the banks and a manufacturing firm is allowed to go to the wall for relative peanuts.
LDV is actually an indictment of the failure of industrial policy in Britain over the last 30 years. It was originally the commercial vehicle arm of BL. Thatcher was determined to get BL back into the public sector ASAP so the firm was broken up into it's individual components so they could be sold quickly, this meant however that each component was too small to be a viable firm in it's own right. So the van business and Leyland Trucks was sold to DAF, things went well until DAF got into serious trouble in the last recession and went bust. The UK arm wasn't in as much trouble but while DAF was bailed out by the Dutch government, the Major government refused to help the UK business and it was broken up. Leyland Trucks and DAF were eventually bought by the U.S. firm PACCAR and until the credit crunch hit, they were doing very well for themselves. LDV has had to struggle along on a hand to mouth existence with little money for product development. They announced a tie up with Daewoo in the 1990's only for that company to collapse, they then got taken over by Deripaskaya, only for him to fall on hard times.
Obviously an unsuccesful company deserves to fail but I really feel for the workers who face losing their jobs. LDV has been desperately unlucky over it's choice of partners and it was badly let down by short sighted government policies in the 1980's and 1990's.
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57. At 2:13pm on 24 Feb 2009, DustinThyme wrote:
Slightly off topic, but as so many posters have mentioned LDV and you have a picture of a van on the blog (not LDV I note), I wonder if any posters have actually driven an LDV van recently. If so they would probably realise that they are probably not the best commercial vehicles on the market and not a good investment for the taxpayer.
Dustin,
Have a look at the article again
"In the bidding for the contract, however, the clear favourite was the then US military truck maker, Stewart & Stevenson. It had a combat-proven product which was acknowledged to be better".
"Crucially, and here is the rub, it had teamed with UK firms, Multidrive Limited, Lex Defence, and LDV Limited in order to bid for the contract. It intended to build the trucks in Birmingham, giving the contract a high British-design and build component, using one of the LDV plants for the manufacture".
"Furthermore, not only would this have given the British Army a high quality, British-built product, it would have presented us with an opportunity to restore military truck-building to the UK, with the prospect of future export earnings from vehicles which would have been combat-proven in Iraq and Afghanistan".
http://eureferendum.blogspot.com/2009/02/british-jobs-for-austrian-workers.html
Instead our army is now using an Austrian built vehicle(of inferior spec.) not only in Afghanistan but here too.
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Though I am normally in favour of markets rather than intervention, I think that privatisation has gone way, way too far - under both parties, incidentally. Royal Mail is a further example of this.
Government is hopeless at running industrial businesses, and it was absurd that the state ever made cars or built ships, for example. Energy utilities, arguably, are businesses, not public services, so should have been privatised.
But there is a vital difference between a business and a public service. Railways, water suppliers, prisons and so on should NEVER have been privatised, and there should certainly have been a golden share system to ensure that none of these activities EVER became foreign owned. Can you imagine the French allowing Brits to buy EDF, or Americans allowing the Chinese to buy Chevron? Both are inconceivable.
Royal Mail is not a business, despite the efforts of its managers to make it look like one (in order to justify higher salaries and bonuses than would ever be acceptable in the public sector, methinks).
Royal Mail is a public service, and should remain firmly in state hands. It is not a piece of family silver to be flogged off for short-term gain.
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Nick
1). When did Mandelson first have talks with TNT.
2). What has Adam Crozier achieved while CEO of the Royal Mail.
3). What % of the Royal Mail letter business is junk mail.
4). Will the government insist that junk mail stops when privatisation occurs.
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Hobbehod asks why the black hole. Well, it may have something to do with the pension holiday that Royal Mail took and which lasted more than 10 years. While not the sole reason it does represent a considerable amount. 9% (Royal Mails contribution) of the total wage bill over a decade is not small beer. Maybe Nick should pose the question to Adam Crozier.
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RoyalMailEmployee @ 67
If you know why the Crozier/Leighton idea of a partnership for the Royal Mail was turned down by the Government, then I'm sure that bloggers on here would love to hear the reason.
Reading between the lines of your post, it is clear to me that, if you are typical of the Royal Mail workers, then the partnership idea would have found a natural home here.
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66. kaybraes:
"Government funded final salary schemes must become a thing of the past, unless the required monies are invested by the government where they can't squander it".
Very true. In a normal pension scheme, each contributor's money is invested to provide him or her with a pension. Government schemes are unfunded - today's pensioners are paid from today's workers' contributions. It is quite possible that those contributing now might get a nasty shock when they retire.
This is a long-standing ponzi scheme - paying out to some people from the contributions of others. It is also an off-balance-sheet liability which is not included in public debt figures.
Anyone tryingeither of these things in the private sector would not be in office - they'd be in prison.........
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Is anybody concerned about the sell-off of British utility companies (even parts of them) to foreign investors? Our manufacturing base was decimated under Thatcherism, and the story continues under New Labour! There is no British car manufacturer; some of our utility companies are foreign-owned; the electrical industry is dominated by foreign companies. I'm not preaching xenophobia - but experience tells us (Peugeot and television manufacturing are two examples) that any company or industry under foreign-ownership profits will be directed to the foreign investor, wherever that may be, and, in difficult times, the British workforce will take a lower priority when it comes to cutbacks.
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Privatisation (or partial privatisation) may work, but I would not trust this Government to implement it properly.
You only need look at this trace of the FTSE:
http://uk.finance.yahoo.com/echarts?s=^FTSE#chart11:symbol=^ftse;range=my;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined
To see who has been responsible for boom and bust in the financial markets. For the second time in 12 years the FTSE is languishing well below the level it was in 1997 when this useless Government walked into Number 10 Downing Street with the sound of "things can only get better" still ringing in the ears!
Well things are NOT better, they are much worse and getting worse still.
Election NOW please!
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67. At 2:40pm on 24 Feb 2009, RoyalMailEmployee wrote:
"Lets face it management of Royal Mail has been poor for a long time and Royal Mail's position has been undermined by the EU postal laws of opening up competition, which has not occured in the rest of the EU surprise surprise and the date for this has been extended to 2013!!
Royal Mail's hands have been tied with having to take on business mail taken by TNT and other postal firms at a substantial loss. Do you realise that Royal Mail has to deal with competitors mail, before our own work, which company would do that and at a substantial loss.
You are being sold a big lie by the government and the EU as to the benefits of privatising or partly the Royal Mail. You can expect larger price increases and before long universal service as it is will be reduced and the public will pay different prices for postage within the UK. Look at previous privatisations did the prices reduce of increase?"
Absolutely agree - we need to hear from all those impacted by the EU - we should all listen and learn.
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The Royal Mail is owned by the government
Therefore the pension scheme is the governments
How can the government try to distance themselves from their part in the whole fiasco?
Like all good pension schemes the value of its contents may rise once we pass through these bad economic times.
There has to be a reason why the government wants to take over this vast pot of money, but who will then pay the pensions?
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"38. At 12:16pm on 24 Feb 2009, AnnoyedofHythe wrote:
Pension? what's one of those.
I have spent my entire working life so far (31 years and counting) working in private industry.
For most of that period, I have been paying into various pension schemes most of which are now worthless thanks to company bankrupcy, collapsing stock markets and finally government taxation."
----------------------------
Likewise it is too late for me, but I have advised my daughter to avoid private pensions like the plague and instead put 10% of her income a month away in an savings account that pays compound interest annually. It only takes about 50 years to mature to a reasonable amount, but a simple delivery driver who spent his entire working life doing this retired a multi-millionaire.
It takes a long time, but when it takes off, it REALLY takes off.
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Beleaguered Brown faces the biggest backbench rebellion of his premiership, while Mandelson lords it up over Royal Mail privatisation.
Yet all you can do is toe the government line with more on a carefully leaked pension fund letter designed to scandalously put the cat amongst the pigeons on the very day of a Westminster protest.
The Royal Mail back-door privatisation has split the Party. Bulging mailbags of hate-mail await ministers and pay-roll MPs. Mandelson's Royal Mail sell-off plans have outraged postal workers and more than 120 backbench Labour MPs.
The issue now is whether this could be Brown's downfall, as I've indicated here.
http://theorangepartyblog.blogspot.com/2009/02/will-mandys-mail-sell-off-leave-brown.html
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Just would like to add more to my comments each duty person lost from Royal Mail the duty either ceases or is reduced to part time and this can be as low as 1 hour per week i am not joking about this. TNT will look to reduce full time working hours and replace them with part time hourly workers which is happening now albeit at a much slower rate.
How to tun Royal Mail around is a tough question having a new Chairman on £200k per year for a two day week does not inspire confidence!!
The public must choose between Royal Mail being a public service with universal service at its heart and a one price goes anywhere in the UK system or:-
A privatised company which will reduce staffing substantially causing more unemployment and stress on public finances, higher increases in postage costs the reduction and elimination of the universal service.
This current government promises that Royal Mail will never be privatised fully which is a ridiculous claim the next government in can do what they want with Royal Mail and if that means full privatisation then Lord Mandelson and Gordon 'Bankruptcy' Brown will be retired on gold plated pensions from the UK / EU and am sure they will make more money from there links and book tours!!!
I am afraid that the current government is devoid of answers and genuine care for UK people as a whole and appears to be a government in major decline reduced to gambling future public finances on a failed gamble made by financial markets and banks.
Royal Mail does and has changed significantly but yes more is required to be done now and in the future.
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As regards to the Leighton /Crozier partnership proposal in which Royal Mail employees would have owned shares in the business.
The government rejected the idea unsure as to the reasoning as it would have given more impetus to staff to work and adapt to change as our wages would be directly affected by our performance.
I would have agreed to shares in Royal Mail as this would definitely motivate me to be more efficient and work harder as well as get colleagues to do same, which i do.
I would like to point out that there is an employee ghost shares scheme now that pays out dividends subject to continous profit making for 4/5 years but if this fails in the last year or any of the first years then all dividends accrued over the period of 4/5 years would be lost, not really much of a carrot for the employees.
Oh can you ask why Royal Mail spent so much money on brand new plasma screens for all mail centres and delivery offices only to keep them on standby permanently thus wasting money buying them as well as the electricity used!!!! This type of waste of Royal Mail finances is typical!
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The Post Office was reported to be back in black for the first time in a long time only recently.
It has done this by reducing the service it provides, eg reduced deliveries and closing post offices. It has matched this cost cutting exercise with significant price rises such as the forthcoming 39p stamp.
This is a commercially run company on that evidence, whoever buys the shares will struggle to find a better strategy to make a profit. Surely all they will do it take their share of the profit whilst encouraging the same policies.
The other issue is the inconsistent policy of the government. Failing manufacturers will not be supported despite the potential consequences.
The Post Office is making a profit so any money placed in it should give at least some sort of return. In these tough economic times investing in a profitable company should be a government priority.
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Royal Mails pension troubles are partly the fall in the stockmarket revenue, partly an historical "payment holiday" that was taken a few years ago, and partly the fact it was a final salary scheme until very recently - and everyone knows how those have faired.
LDV, sadly, doesn't deserve a "bail out" because it has been in trouble for a while, since nobody wants their vans. Interestingly, one of their big contracts was Royal Mail vans - but they don't use them anymore. I'm all for giving them a loan or something similar, but not really a bail out per se. Their rather well off russian parent should be doing more.
I see lots of companies using the recession/credit crunch as an excuse to grab money from the treasury, but it's both the treasury and the CEOs of these companies who are to blame.
Back to Royal Mail - the best solution is to take it in house, re-nationalize it, and keep it and the post office network as a service. Surely the Government can find some use for a facility that can reach every person in the United Kingdom and that has an unrivalled property network of shops and delivery/sorting offices in every town and city... :-)
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Nick, can we have a blog about what Jack Straw's trying to hide with the ministerial veto of the FOI request on the cabinet minutes for the iraq war. I mean, i think Yes Prime Minister covered release of cabinet minutes.
Still, not wishing to be pulled up about not being on Topic, but read Pratchett's Going Postal for a good look at thr Post Office
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As regards to Number 88 comments local Post Offices could be merged with Job centres and thus when you become unemployed you can pick up your giro at the same place saves costs and makes savings for the public finances!!!! I think a lot of different goverment departments and council ones could be merged to save money why have different funding and buildings for job centres immigration, consumer advice, special interest groups etc when these can be housed under one roof making them more efficient and reducing costs to the public purse who can access more in one place than having to go around different buildings or phoning more than one place or online.
Think wil become an MP join the gravy train not!!!!
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'Jack Straw vetoes the publication of minutes of key Cabinet meetings in the run-up to the Iraq war.'
Well, I wasn't expecting that!
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the Post office pension fund is bust because Gordon Brown took away pension tax credits.
The stock market has gone nowhere in twelve years because there have been no productivity gains in the UK in twelve years.
The only incentive given to business in twelve yers of Blair Brown boom and bust was to get as much cheap credit as possible. Those days are over and the sad fact that nothing at all happened in all those years except wave upon wave of government spending is there for all to see.
Gordon Brown might as well be as naked as the day he was born. Everyone can see it was all just a mountain of cheap debt; the largest Ponzi scheme in the world.
Forget Madoff, forget Stanford financial; the biggest financial scandal of the early twentieth century will go down as Gordon Brown's cheap credit boom.
Call an election. You are not welcome
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Dear Nick Robinson,
Please accept my apologies in advance for posting to the incorrect place, but I've just read about Jack Straw vetoe-ing the release of the Iraq-meetings info, and I am shocked!
I do not have your email, but would greatly appreciate it if you would forward my strong disapproval to Jack Straw and the government.
Mr. Straw & Millband: Come clean, we need the truth. Also about the Ethiopian just released from Guantanemo Bay.
Thanks.
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It's about time a few of our politicians started to embrace reality, starting with Supreme Leader Brown, but ideally the man who is most likely to be at the helm next:
[Unsuitable/Broken URL removed by Moderator]
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People talk about the payment holiday as contributing to the hole in the PO pension fund (and many others) However if there had not been a pension holiday, Gordon would have taken more out with his grab!
Tony Blair destroyed the post office when he brought in competition without making bidders agree to accepting letters.
We need an election !
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John @ 34
Yes, I read Tom Bower on Branson right after reading him on Maxwell. Very interesting.
Also read him on GB and am drawing to the end of his GB, PM which has left me very confused about the Leader's motivation other than power at any price and the people can go hang. Have you read it, and what do think?
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So Nick, your own comments about the WMD cabinet minutes may have been well off the mark after all.
What is it the Government keeps telling us plebs? Nothing to hide = nothing to fear???
It seems that they HAVE something to fear.... Perhaps an admission in cabinet that there is insufficient proof of WMD (none being a quantity that is normally considered as being insufficient) and there were people who actually had doubts about the legality and necessity of going to war when they did?
I hope that IF the Tories win the next election (IF we get one) then they will publish this and hold their long awaited full and open and public and independent inquiry into the rush to war.
Election NOW please!
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yellowbelly @ 47
Sounds as though we have the same MP who didn't originally support her local hospital?
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The reason for the deficit is simple - Royal Mail did not make a single contribution towards the fund for a shameful THIRTEEN years from 1990 onward. Obviously us employees never had such an irresponsible option available to us and it is totally unjust to threaten us with reduced pensions if we, and the British public, do not accept privatisation of a company who managed to make a PROFIT of a quarter of a billion pounds in 9 months as the country was heading into recession, despite having, by far, the lowest cost for a next day delivery service than our European counterparts.
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@72 garethm2 and 73 Sparklet
Yes it is sad about what happened to BMC and subsequently BL. I really don't think we can put this right by bailing out LDV (probably only for a while anyway) even if they might have been partners in a tender for supply of a prospective military vehicle.
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@92. At 4:04pm on 24 Feb 2009, RobinJD wrote:
the Post office pension fund is bust because Gordon Brown took away pension tax credits.
The stock market has gone nowhere in twelve years because there have been no productivity gains in the UK in twelve years."
========================
The graph on the yahoo page I linked to earlier demonstrates that only too clearly.
The FTSE rose steadily over the time when the tories were in power, with (by today's standards) small blips. Labour have created an uncontrolled boom and bust cycle that looks like a camel's humps leaving the FTSE lower today than when they came to power.
IF you had savings in any kind of policy linked to the FTSE in 1997, you would have been better off withdrawing them and keeping them under a pillow. Cash has been a safer haven than the markets under Labour. Unfortunately, labour has been in the bankers pockets and are very happy to see cash eliminated altogether. Removing ALL financial control and independence from all aspects of everyone's lives.
I remember thinking that having the mark of the beast to be able to trade was an unreal and ridiculous bible story from the book of revelation. When all cash has been removed from society, what mark will we have to display at a register to purchase (trade) goods?
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Ah....
"The Conservatives said the decision was "right" since the release of the minutes would make ministers more reluctant to discuss controversial subjects in future, impeding good government."
So much for opposition then. I guess this support for protecting government secrecy, using labour's 'Freedom to withhold Information Act', shows us that the Tories really are preparing for government.
I hope someone leaks these minutes anyway. The ARE in the public interest.
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I am much more intrigued about why suddenly, the Post Office has become such an urgent issue with Mandelson and Brown.
At a time when unity in the party is such an important thing, why suddenly are they picking a fight with their backbenchers or at least risking dividing the party.
For someone like Brown who has thrown tax payers money at almost anything to keep himself in power. Why would he allow Mandelson to do this now, even if there is a black hole in the pension scheme. They must know also, that public opinion is against them, I find it a bit of a puzzle, when the polls are against them as well.
Labour have had 11 years to reform the Post Office why suddenly is this so important.
Could it be the money really has run out and we as a country are nearly bankrupt?
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I am sure this is a stupid question but who the hell - in their right mind - is going to buy 30% of a failing utility with a black hole for a pension fund in the middle of a depression?
Who is this Derry Pascoe and what's he got to do with Mendelssohn?
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Concerns over Glenrothes count transparency:
http://www.order-order.com/2009/02/glenrothes-electoral-commission.html
Good God.
Ballot stuffing. Opposition MPs arrested for doing their jobs. Total denial of any problems.
We *are* living in Zimbabwe!
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"As for pensions, how many like me were ruined in 1997 by Brown's ill conceived pension grab?" (oldrightie, post no. 11)
None and I doubt you were ruined, either.
The idea that removal of tax exemption on dividends in pension schemes destroyed them is a myth. Their effect was to increase costs by 22 per cent of the dividend yield on their investements - which were, at teh time, generally around 3 per cent on the Blue-chips.
22 per cent of 3 per cent is 0.6 per cent.
Inconvenient, yes, but not exactly earth-shattering.
Of much greater import have been living longer and lower interest rates. Average life expectancy is now about 78 for men, older for women - it was 67-68 when mass pensions came in, in the 1950s.
Interest rates - we know where they are; even on long-term Gits, they're about 4% - compared with 8%+ through the 70s to the 90s.
So low interest rates have to support pensioners for five times as long as they did in the past.
If you want to go back to the 'good old days' of early death and high interest rates, go ahead - go live in a drafty and damp house, contract pneumonia and barely have two brass farthings to rub togther. Looxory!
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100#
Why not, we've pretty much been baling out Westland for the last 25 years, keeping them on a drip feed of MoD contracts and others that they wouldnt/shouldnt ordinarily win - the taxpayer effectively being held to ransom for exactly the same reason, local employment and the fact that its in a marginal political area.
They should have gone bust at the same time as LDV did.
Lewis Page gave a damning indictment of the purchase of Apache helicopters from Westland... for what we spent on these from Westland and then waited god knows how many years for, we could have gone directly to the original manufacturers (Sikorsky in the US), bought the same amount of Apache's straight off the production line, had them delivered sooner, closed down Westland and given EVERY worker there a £1M redundancy payment....
..... and still have had ONE BILLION POUNDS left over in change afterwards, compared to what the original bill from Westland's was!
From what I heard this morning, LDV received £24M of public money 4 years ago and this still hasnt been repayed.
Let 'em go under. Sorry Birmingham, but thats how it is.
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As usual the member for Kingstone upon Hull (Alan Johnson MP)seems very quiet on the subject of Royal Mail. Come on Alan Johson find your voice - some of us remember the days when you were a trade union offical representing us. You may have forgotton your roots, some of us haven't.
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RoyalMailEmployee @ 96
So you work in the Royal Mail and do not know the reason why the Crozier/Leighton partnership plan was rejected by the Government.
Fair enough, that is understandable.
Only a handful of people probably know the reasoning behind this.
Nevertheless, I am going to find out what those reasons are.
We English might have one of the most pathetic democracies in the developed world but I rail against it.
For only the second time ever, I will request the information from my MP, via the They Work For You (in theory) website and report back.
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Puprpledogz (p 83):
"Likewise it is too late for me, but I have advised my daughter to avoid private pensions like the plague and instead put 10% of her income a month away in an savings account that pays compound interest annually. It only takes about 50 years to mature to a reasonable amount, but a simple delivery driver who spent his entire working life doing this retired a multi-millionaire.
It takes a long time, but when it takes off, it REALLY takes off.'
What absolute codswallop!
If you put money into an approved pension scheme, you get basic rate tax releif on the contributions - i.e., each £100 gets you another £25.
If you want to stick with cash rather than shares within the scheme, fair enough - but telling your daughter to steer clear of pensions will cost her far, far more than any benefit you may imagine she would gain. And take longer - your mythical delivery driver would have been able to retire at least 10 years earlier if he'd put the cash into a pension-linked deposit fund.
FYI - compound interest is what all deposit accounts pay. No need to look very far or specially ask for it.
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Here, is a great example of privatising a once great (government sabotaged) public treasure.
It is cheaper, faster (and likely to be more reliable) to buy second hand car, insure same, provide the fuel and drive yourself and three passengers from London to Newcastle than to travel to the same destination by rail.
I am no socialist, but a British businessman who believes that certain key infrastructure should remain in the public sector.
Private companies have to make profit. One only has to look at the privatisation of cleaning in hospitals to see taking profit from a fixed budget leads to lower standards and increased risk to our health.
I foresee this fate for the Royal Mail we will gradually get less bang for our buck!and if TNT or any other business is let into Royal Mail it will be WE that suffer.
The pension issue is a red herring, we are going to foot that bill anyway along with many other liabilities created by a succession of incompetent political decisions and the miss management of our nations affairs .
I am afraid that all politicians care about is serving themselves and only give us poor saps a thought come election time.
for the next five years they "Cop A Deaf un".
Which you will notice they are doing at the moment. (did they not "Cop A Deaf un" when warned about the impending bank crisis)
This was promptly followed by the "We were not aware, Nobody told us" plea.
I often get the impression that Britain is like a bus being driven down hill by a gang of blind and insane rats who are arguing over who has the steering wheel, how much they can get for it and which of their friends should get first refusal.
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Well!Well!Well! My Noble Lord Mandelson comes to the rescue! Bypassing that tiresome House of Commons,our unelected hero does his stuff again before vanishing into some cushy new career path.We seem to have two and a half Conservative parties running things.I have a better idea,as Royal Mail is losing volume to the internet why not let it invest into a telecoms company like say,BT.We could call the amalgamation the GPO,hows that for an idea.Sorry! I forgot only the banks qualify for socialist policies.
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Everyone should share the misery of Gordon's economic policies. Rich and poor, old and young, private and public sector, all should suffer. You and I. Even bankers and post office workers.
In the long run there should be no final salary pension schemes, and hence no pension shortfalls.
Most private sector workers have suffered since Gordon changed the tax rules ten years ago (90-100 billion transferred from future pensions to pay for Gordon's madcap current expenditure scams). Instead, Money purchase salary schemes tie pensions to national economic performance, though some change of regulations are required (only UK investments should be tax deductible)
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107#
OK Rory:
So.
If this was the case, as you say, that the grab carried out by Brown and Robinson in 97 resulted in a "inconvenient but not earth shattering" result...
Just how come then that the private pension funds are in the dire situation that they are in, with so many in deficit, etc?
Granted, we've had an answer for one of them, the Royal Mail - a 13 year holiday.
Are you seriously telling me that all of these pension funds were run in the same shabby manner? Including all the rest of the blue chip ones?
I can - to a degree - accept what Munich said earlier on in a previous blog about funds tracking the FTSE more than anything else and therefore suffering its vagaries more - but these alarm bells have been ringing for the best part of 10 years... during which, we've had the dotcom bubble, Gordons' Cheap Credit bubble - the FTSE soared to over 6000 - yet, these alarm bells have kept on ringing and the deficits, the holes in these funds have never gone away.
Can you tell me why?
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#106 - if you think that the dividend credit didn't make a difference, have a read of Robert Peston's book. His chapter on Royal Mail is also a good read.
#26 - spot on. All of this is Brown's incompetence and hubris biting him in the backside. Letting billionaire pals steam the system while turning a blind eye (pun intended) to regulation. Peston is right - billionaire private equity and hedge fund owners cream the economy tax free and the opportunity cost is the return on our pension funds.
Shame on them all. Brown's scorched earth policy to make the mess bigger for the tories is deplorable.
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Nick
The question that you need to ask is; why haven't the PO Pension Trustees demanded that their employer increased their contributions during the last 7 years to reduce the gap. They have a legal requirement as trustees to look after their members. Clearly they have fallen down on their job unless the Government have given them a legal undertaking to cover the losses in the fund.
This is nothing more than "Mandy Spin" his sticky ingerprints are all over it. Don't swallow the line Nick, it doesn't add up.
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Fubar_Saunders @ 107
It has been 15 years since I parted ways with the Defence industry.
But I can still guarantee that the reason why Westland are having problems has nothing to do with the Apache as such but EVERYTHING to do with those (I'm finding it very hard not to swear) Civil Servants at the MoD.
Who could not take a craft like the Apache and minimise the modified requirements for our military.
Let me give you an example from my own experience, when the Falklands war was brewing up, I was working on some Naval kit which it was decided was urgently needed in the South Atlantic.
The MoD bureaucrats 'disappeared' themselves and the job was then done extremely quickly and heading South in just over three weeks.
Under the normal MoD 'procedures', that work would have taken a year to do.
That is an example of the malignant effect the MoD often has on the procurement process.
Recently a retired Naval Rear-Admiral stated that he thougt the MoD was not fit for purpose.
I can easily believe that.
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What should happen:
1) Government keeps the Royal Mail in the public sector and, to make it efficient and profitable, i.e. 'lean and mean', sacks all the senior managers and 50% of complacent middle managers.
2) It resurrects twice daily (universal) deliveries - with first class deliveries before 0800 to most households and businesses, and second class mail (including all junk mail) being delivered in the afternoon.
3) It removes union-lead restrictive working practices such as pointless demarcation.
4) It retains Post Offices in rural areas.
5) All this wonderful service is paid by doubling the price of 1st and 2nd class stamps. (No private company can - currently - compete with a universal delivery even at 1.5 pounds a letter).
6) Everyone is happy: our post is delivered promptly at a reasonable cost; rural POs remain open; our (generaly) respected, trusty and reliable 'posties' are able to do the job they are paid for.
What will happen:
1) The government will push through legislation flogging off the profitable bits whilst keeping the dross (and the dross management) for the taxpayer to fund.
2) The 'universal' postal service will continue to deteriorate.
3) Rural Post Offices will be closed.
4) The price of stamps will - after a hiatus of a year or two - double anyway.
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@110 . At 4:55pm on 24 Feb 2009, RuariJM
Try telling your pro-pension nonsense to people retiring today, who have opted out of SERPS and have paid into a private pension scheme for the last 19 years and have NOTHING to show for it since the market crashed!
There is no doubt that putting money into a guaranteed savings scheme that compounds interest is safer than putting money into a pension scheme that can be worth less at the end, than at the start.
Remember the legal advice given when selling pensions, "The value of investments can go down as well as up and past performance is no guarantee of future performance."
That advice is legally compulsory for a reason!
The way things are going, my daughter will be better off putting cash under her pillow, or buying silver.
Considering that the global derivatives market is a 4 quadrillion dollar elephant in the room, and that is deflating very very very rapidly. Some analysts are warning in private that there MIGHT not BE a banking system left in 4 years time. The fact is, NOBODY knows where this crash is heading!
Back to bartering anyone?
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102. At 4:36pm on 24 Feb 2009, purpleDogzzz wrote:
Ah....
"The Conservatives said the decision was "right" since the release of the minutes would make ministers more reluctant to discuss controversial subjects in future, impeding good government."
=======
As a lifelong Tory voter, methinks it's time for a change.
If Tories can't be trusted to be an opposition, I simply don't see how they can be trusted to be in government.
The whole political establishment is corrupt. It is supported by a corrupt lobby and a corrupt media. And that corrupt media is being led by the BBC. I've listened to Pienaar and Peter Allen this afternoon when the news broke.
No more to say than it was an afront to journalism and an afront to my intelligence. The day of reckoning is appraoching for all those with their snouts in the trough.
And it can't come soon enough.
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This comment was removed because the moderators found it broke the House Rules.
117#
Wouldnt doubt it for a minute. Strange how those kind of "not fit for purpose" comments are usually accompanied by the words "recently retired", is it not?? :-)
I can certainly vouch for the MOD civil servants analogy. A bigger bunch of decision avoiding, jobsworth, papershuffling, bums on seats, bureaucratic pinheads you could not possibly find.
Well... except maybe in DfID or the rump of the Home Office. :-)))
Then again, if they were any good and could do anything approaching half of what we did in uniform before they all came along in the late 90's (God, I wonder who's watch THAT happened on????), IT contractors like me would be out of a job.....
.... so.... (thinks carefully....) thank God they're as hopeless as they are. (thinks again for a few seconds.....) "Long live Gordon Brown, the Dear (Dour?)Leader!!!"****
(****both sets of fingers crossed behind back)
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117. And the MOD has, since the end of the Cold War, been virtually an outpost of The Treasury. The cock up over the Apache training contract was a short sighted attempt to save money which has ended up costing far more than it should have! As someone who works in the Civil Service, my own opinion is that The Treasury is too powerful with government (especially under Brown) and is obsessed with short term cost control even if it results in bigger costs further down the line! Personally I would go for the Canadian system of a Department of Finance, to deal with macro-economic policy, taxation and financial services, and Treasury Board to be inc charge of spending.
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pupledogzz (119)
"Try telling your pro-pension nonsense to people retiring today, who have opted out of SERPS and have paid into a private pension scheme for the last 19 years and have NOTHING to show for it since the market crashed!"
People who opted-out of SERPS should have paid contributions into a GMP - guaranteed minimum pension - which was, in effect, a cash fund. If they chose to put it into equities then it was their choice - they should have been warned very strongly and followed the warning.
"There is no doubt that putting money into a guaranteed savings scheme that compounds interest is safer than putting money into a pension scheme that can be worth less at the end, than at the start."
Either you didn't read what I said or you fail to understand. You can put money into a cash deposit fund, within a pension scheme, run by (e.g.) a life assurance company - although most private schemes have that option under money-purchase, too. If you do so, you will have what you seek - a 'guaranteed' (assuming the backing organisation is strong enough) savings scheme AND tax relief on what you put in. It will behave exactly like a buildign society deposit account - ony there will be much more in it because of the tax relief.
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No, 114 - Fubar
I've alerady given you the two major reasons - we're living too long and interest rates are too low.
But here are another two:
Companies took 'contributions holidays' - i.e., they stopped paying into them when times looked good. Instead, the money was distributed to shareholders as dividends and to senior executives as increased pay.
When the inevitable happened and times weren't so good, no-one wanted to pay back what they'd been given.
The 'holidays' were major and on top of declining returns, turned what could have been 'little local difficulties' into significant shortfalls.
Second: investment policy. A pension fund manager of my acquaintance looked at me pityingly when I suggested that, if your need is for income - a high yield from assets - then the investment should be in Bonds (Gilts, in this country). After all, they're designed to pay fixed income - and if interest rates fall, their capital value rises. So why not, with each retiring member's pension pot, buy Bonds (this is if you're not buying an annuity from a small group scheme or an individual arrangement). And when the individual shuffles off the mortal coil, you get the rmaining capital back. Prudent but reasonable, I would have thought, and somethign that would keep a handle on scheme costs.
Well, he huffed and he puffed but what it comes down to is - capital appreciation. Historically, equities (shares) have seen greater capital appreciation than Bonds and fixed-iterest. True - but why is capital appreciation important? So important as to override prudent income-yielding investment strategy?
Urrrmmmmm - might be because pension fund managers are paid a percentage of the fund's value? So the more it rises, the more they get?
Oh - hush my mouth! How could I think such a thing!
I'm cerain it's not entirely about that - it will be about grwoing so fast that the company can take a pension holiday...
I think that's where we came in.
But just a side note - the returns on equities haven't been shooting all over the place because we have a Labour government, as an earlier poster said. I doubt if the US cares very much, nor Japan, China, Mid-East or any of the other nations who have also seen their investements oscillating about so violently.
It's because of the rise of leveraged derivatives and their managers, including our dear old friends, the hedge funds. Actively-traded derivatives amplify and exaggerate small, natural movements in the markets into huge swings, back and for and up and down. And when the music stops - we end up where we are now.
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The thing is the post office was always subsidised by the telecoms arm Post Office telecomunications.
When BT was formed what was left of the Post Office was supposed to modernize.
The trade unions have always been against this.
This is a disaster that has been waiting to happen for decades.
The question I would ask.
Is the Post Office so far behind the game to sell off anyway?
If the post office was a private firm it would already be considered bust.
Is it fair to keep asking the taxpayer to fund the Post Office?
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Bluematter post 120
I thought it was only me! I have been saying to my wife that the Beeb seems to have lost the impartiality plot somewhere down the line.
Today I watched BBC news interviewers appear to give government spokesmen an easy ride over the Royal Mail issue.
Whilst the bold Scottish red head with very blue underwear shouted down one of the labour rebels on his program he gave the government spokesman an arm chair ride.
They never seem to ask the pertinent questions do they.
Like who appointed the senior management at Royal Mail ? why have the attempts by Royal Mail staff to modernize been thwarted by senior decision makers?
wouldn't be the same people that appointed a certain person to the FSA would it?
with regard to who to vote for next time we are caught between a rock and a hard place.
Monster Raving Looney Party may be the sane option. :-)
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Nothing to hide eh ??!!
Jack Straw vetoes the publication of minutes of key Cabinet meetings in the run-up to the Iraq war.
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garethm2 @ 123
The Treasury is supposed to be that place that takes the finest brains from Oxbridge and where intellects are graded like fine wines.
Yes, seriously.
However, even a cursory glance at their track record reveals a breath-taking level of incompetence.
Some of their decisions have been really appalling and in one case, the refusal to fund the development of the Hurricane fighter, almost fatal for this country.
More recent gruesome examples include the decision not to fund the original design for the M25 motorway, so today, it is having to be widened at vast taxpayer expense.
You mention Canada, a country that is awash with money and has virtually no people, relative to its size.
I have relatives there and other English born relatives are heading there too.
England could still be one of the best places on the planet.
But there is zero chance of that whilst the current democratic system and its associated politicians are in place.
We English need a political revolution in our heads.
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Those MP's and Trade Unions who fight this are doing no more than fight to delay the inevitable. I also believe I am expressing the view of the majority of people who do not see why as a Tax payer I should subsidise something that anyone who looks at the situation objectively can foresee must radically change.
I have lived in my house for 10 years and in that time had the same postman who is everything Mr Crozier would want from a customer service driven 'postie'. His job seems to me to all intents and purposes to be the same as it was 10 years ago.
Meanwhile in the same last 10 years i have worked in the white collar recruitment industry. In that time we have gone from receiving sacks of mail each day, (CV's, invoices, cheques, correspondence etc) to the vast majority of our business being conducted electronically. Massive nos of emails every day and minimal physical post! There has been a communication revolution in that time and this is replicated through every business and many households where the occupants embrace the internet.
I find it amazing that Royal Mail Trade Unions and Labour Party MP's are arguing about the need for radical change. It is a miracle given the massive reduction in postal revenues in this period that the company are surviving at all. Given a level playing field a private sector business would have gone to the wall a long time a go.
So I may like my 'postie' but I do not see as a tax payer why I should subsidise his pension which is much better than mine. Or why I should subsidise his life by not making it change like the rest of us who live in the 'real world'.
Public sector pensions are simply unaffordable and eventually some Government is going to have to grasp this 'hot potatoe'. For those of us in the private sector it seems obvious and it is a subject unlikely to generate any sympathy whatsoever in the world I live in.
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I see another government commitment has bitten the dust - open government. Jack Straw has vetoed the release of Cabinet papers on the build up to the Iraq War. Maybe he is watching the back of the then Foreign Secretary - one Jack Straw.
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IT'S OFFICIAL!
IRAQ WAR ILLEGAL!
Today the Government - by refusing to disclose the relevant papers - confirmed the illegality of the Iraq War
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RuariJM
I don't believe it a voice of SANITY on this board.
Well said you, posts based on some actual knowledge of a subject.
Clearly you'll soon be hounded off the board by the usual neo-con extremests, arm chair experts on every subject who think their opinions are facts.
Their political objectives can only be achieved by maintaining the "Brown to blame for everything" narative. Oh and every other post bemoans BBC bias. Oh and the recession is all down to Brown, apparently if Cameron and Osborn had been in power this wouldn't be happening in the UK, immune by Tory economic magic.
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98. At 4:24pm on 24 Feb 2009, PammyAnny wrote:
yellowbelly @ 47
Sounds as though we have the same MP who didn't originally support her local hospital?
===
Gillian Merron
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Wouldn't it be a delicious irony if postal workers decided to have a litle lstrike towards the end of May and beginning of June, which would quite coincidentally clash with the European elections. No postal votes, humiliation for Labour, the postal vote-friendly party!
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110. At 4:55pm on 24 Feb 2009, RuariJM
And how much of this accumulated pension fund is available to you at retirement as cash, to do with what you will?
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the only reason that the post is to be part privatised, and that will only be the profitable part, is beacuse BRUSSELS demands it.
This government will roll over with its legs in tha air when ever the Brussels dictators demand it.
We now have the EUROPEANS creaming of the profits from POWER, GAS, WATER and now the post. No wonder this country is bankrupt with amount of money being given to Brussels and the Europeans.
Time to bring POWER, GAS, Water and all the other companys given to Europe back into British ownership, without compensation to the foreign asset strippers.
I say no moreprivatisation of the post and renationalisation of all the utilities.
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131. At 6:18pm on 24 Feb 2009, threnodio wrote:
I see another government commitment has bitten the dust - open government. Jack Straw has vetoed the release of Cabinet papers on the build up to the Iraq War. Maybe he is watching the back of the then Foreign Secretary - one Jack Straw.
===
If they have nothing to hide, then they have nothing to fear!
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@131 and @138
The court said that this was an isolated requirement, not a change of the 30 year rule
So I don't fully understand what Jack Straw is standing up and saying. If this doesn't over rule the 30 year thing and this would help to explain things fully to the public what is the issue?
Maybe now we just have to await a "leak" and subsequent enquiry?
Is it possible to prosecute the leader of a country where they knowingly led their forces into an illegal war?
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127. At 5:50pm on 24 Feb 2009, stanagast
Excellent post, totally agree, apart from your last comment that is!!!
But I must admit it's a difficult choice when we don't have any party representing the views of the majority!!
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Just the type of convenient BLACKMAIL
one expects.
Our employee pension fund for UK staff
dropped 40% in 2008.
NICE ONE GORDY?
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137. At 6:44pm on 24 Feb 2009, SnoddersB
Absolutely agree.
We need an election NOW.
then
A Referendum on EU.
Time the people had a voice.
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136, yellowbelly:
"And how much of this accumulated pension fund is available to you at retirement as cash, to do with what you will?"
In a personal pension fund, I believe the current limits are 25% of the accumulated fund value can be taken as a tax-free lump sum; the balance used to purchase an annuity (steam of income) which can be guaranteed 5 yrs, 10 or longer.
It's the quid pro quo for favourable tax treatment, in effect.
The guarantee means that, on death, the pensioner's Estate gets the balance of the original purchase price that has not been paid out as income - so if you croak within a few days of signing the contract, your inheritors will get the entire accumulated fund. If you last more than 10 years, say, they will get nothing.
There is an exception: if the accumulated fund would buy only what is regarded as a 'peppercorn' income, it can all be taken as cash. Check with your independent financial adviser for full details (and no, I'm not one of those!).
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Eatonrifle (133);
Thank'eee, koind sorr! Don't worry about me - I have a thick skin and something else that will protect me - a life away from discussion forums!
Why, I have been living and conducting it over the past two hours and shall be returning to it right now!
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133 wrote:
'Their political objectives can only be achieved by maintaining the "Brown to blame for everything" narative. Oh and every other post bemoans BBC bias. Oh and the recession is all down to Brown, apparently if Cameron and Osborn had been in power this wouldn't be happening in the UK, immune by Tory economic magic.'
Give me strength! For the zillionth time NO! the recession is not all down to Gordon Brown and NO! The BBC is not biased and NO! we just don't know how The Conservatives would have handled the mechanics of the present situation but YES! Gordon Brown is partially responsible for making us uniquely weak to tackle our present predicament.
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Oh GORDY & THE GANG?
THIS IS ALL SO LIKE ANIMAL FARM!
The UK SOCIALIST REPUBLIC.
RUN BY THE WHATS IN IT FOR ME BRIGADE.
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Nick, nice of you to pop by every now and again.
Perhaps you can pop back within the week to let us know whats going on with LDV and the problems within Mandelson's office it causes him , or the fact we're losing Police jobs (even when there's a predicted "summer of rage", or why Jaqui Smith and Chris Grayling had the same scriptwriter last weekend, or how we're staring at a £4 trillion public debt by the end of the year?
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Cameron & The Tories?
GET YOUR ACT TOGETHER YOU'VE LOST IT
AS AN OPPOSITION.
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Caught Nick doing his turn on the News show the other day. Great material, anyone know who the writers are?
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WHATS MANDY UP TO??
Nick? Do you not dare GO THERE??
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The cabinet papers on the Iraq war will not be released until Tony Bliar has enough money in his retirement pot.
Then he can just shrug it off with the Nu Labour anthem "I did what I thought was right"
Freedom of information can only go so far to protect the establishment from public ridicule.
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143. At 8:30pm on 24 Feb 2009, RuariJM wrote:
136, yellowbelly:
"And how much of this accumulated pension fund is available to you at retirement as cash, to do with what you will?"
In a personal pension fund, I believe the current limits are 25% of the accumulated fund value can be taken as a tax-free lump sum; the balance used to purchase an annuity (steam of income) which can be guaranteed 5 yrs, 10 or longer.
It's the quid pro quo for favourable tax treatment, in effect.
The guarantee means that, on death, the pensioner's Estate gets the balance of the original purchase price that has not been paid out as income - so if you croak within a few days of signing the contract, your inheritors will get the entire accumulated fund. If you last more than 10 years, say, they will get nothing.
There is an exception: if the accumulated fund would buy only what is regarded as a 'peppercorn' income, it can all be taken as cash. Check with your independent financial adviser for full details (and no, I'm not one of those!).
===
My point exactly. On a personal pension you only get 25% of what you paid in back as a tax-free lump sum. The rest is used to purchase an annuity. If you don't build in a guarantee, or if the guarantee period has ended, then the insurance company benefits, not your estate. (Unless you have a drawdown contract, etc, etc, etc).
So, personal deposit savings, less overall growth, but more funds available personally, and no restrictions on when or how withdrawn.
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Can I just add my voice to those above wonder when Nick will give us a blog on Jack Straw's FOI veto?
All repeat after me:
"If you've nothing to hide, you've nothing to fear
If you've nothing to hide, you've nothing to fear
If you've nothing to hide, you've nothing to fear
If you've nothing to hide, you've nothing to fear
If you've nothing to hide, you've nothing to fear
..."
Or does that only apply to ID cards?
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Caught Nick on the evening news today. Tossing pancakes at the HoC.
Obviously no news then, all quiet inside the Westminster bubble.
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You know, failing a real Government, let's start a Fantasy Government thread.
Do we need a Prime Minister? If so, we should appoint a chariot slave, "Remember, Eminence, that thou art mortal". A job for Crash at last...the slave, I mean. Or perhaps food taster?
We've already decided Vince 100 Fathoms for Chancellor.
Gail Trimble for Foreign Secretary, pity she missed Condoleeza Rice.
Shami Chakrabarti for Police Commissioner.
Tony Robinson for Home Secretary.
Other suggestions are welcome. We have current vacant positions for Cardinal and Prime Minister.
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I cant help thinking the analysis of the Royal Mail's problems is getting over -complicated on here .. for several years in the 90s and into the present century, Royal Mail made a healthy profit... it was the loss-making Post Office they couldn't wait to hive off .. Was this profit invested in the Royal Mail pension fund? Of course not. It went straight into the Treasury coffers. ... and while I think about it, I heard Mandy this morning say " It's not the government's job to bail out LDV. In the first instance, that is a job for their owners, the shareholders." ... Couldn't we have said that to the banks and saved ourselves a huge amount of money?
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125#
RuariJM:
Though you might not be around to read it, thanks for your reply. Thats the kind of detailed answer I wanted. Now, I've learned something from it.
133#
Exactly the kind of detailed answer that you dont come up with I'm afraid Eton, just more and more "its nothing to do with us, it started in America, all you Tories (ie, anyone who is not a New Labour Accolyte) are s**t and dont know nuffink and wouldnt do nuffink".
People of all political colours cant stand Brown and know exactly what he is and is not to blame for. People of all political shades know exactly what he has taken the credit for and what has blown up in his face, what he has shirked, what he has lied about. It doesnt mean they're all Tories because they dont agree with you.
All well and good telling us how crap the Tories are - I think considering how most of us lived through the 18 years of Thatcherism and Major clinging on for dear life, we might just know that already - but considering that when NL took power they were meant to be whiter than white, things were only supposed to get better, there have been 12 years for them to deliver on all of their promises, an end to boom and bust - Gordon and his crew have had 12 years to make a significant difference to change all of our lives for the better.
I dont need to kick the ar$e out of it to tell you that on a number of things they have proved themselves to be no different to the mob they deposed in 1997.
THATS why he takes the amount of stick he does.
Try giving a straight answer to a straight question like RuariJM did and like Munich has been doing and you might find the rest of the posters a bit less anti.
Just trotting out the mudslinging party line of Gordy's propaganda is only ever going to get one result.
Brown is finished, its just a matter of when, rather than if. Cameron is by no means a shoo-in in 2010 and fine well he knows it as well.
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#106 RuariJM
You write lots of words and they scan tolerably well - but you don't have the slightest idea of what you are talking about.
The abolition of ACT was a mean minded cynical move on many levels., the loss to pension funds was just one of its consequences - but it was a serious consequence.
You suggest you do understand the situation, but say so much that demonstrates that you dont - can I ask your qualification to comment on this? (obviously no qualification is needed to comment on a blog, but I would like to know what authority you think you have on this subject).
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#98 #47
If so, theyworkforyou reveals she also voted strongly for the Iraqi war and against an investigation into it. Also very strongly against a transparent government and for anti-terrorism legislation, and strongly for ID cards. She's Parliamentary Under-Secretary for the FCO, but got a detail in her Brussels organigram wrong, she is also on the Electoral Fraud, Police Bill and Justice Bill Northern Ireland Committees. Strange for a Lincoln MP...
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Cracking show again Robbo, Glasses routine inspired. Is there a fan club?
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The Post Office was created before the internet and needs to be deregulated and allowed to use its asset base, no let me be right, our, the voters' and taxpayers' asset base, to trade effectively in the modern environment.
The real need is for a good internet delivery POST RESTANTE like we used to use.
Unfortunately the mugginses who split the Post Office from the Parcels and sorting business and then regulated them apart is now killing our investment and all the rural Post Offices which should be looking after the failed Tesco deliveries and staying open in the evening for Jo Public to pick the goods up on the way home.
Then we would have a viable Post Office network, a cost reduction in the supply chain and a more viable economy for all.
Who would say this is the wrong way to go?
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Just finished watching an item on BBC Online. Nick Robinson just gets better and better. How he keeps a straight face through it all I don’t know!
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133 Eaton Rifle and Ruari
I was just about to make that very post. Your comments have been illustrated very nicely by Alex "My what big capitals" Curzon - who I suspect isn't a real person.
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155 rahere
unfortunately most of the educated, knowledgeable people who I think would govern with integrity I know, are academics who know one has heard of, not tv personalities
Hammond for transport secretary tho
Somebody with entrepreneurial skill for PM - somebody like James Caan or Richard Branson, at least they know how to balance the books
Mark Easton should get home sec I think
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Why does the CWU bankroll Labour?
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Rahere's jealous.
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Just finishing my Jane Austin novel written almost 200 years ago... Marianne has been waiting in hoping the third post of the day will deliver Willoughby's acknowledgement.
An awful lot can be done by e-mail especially online shopping, but without a functioning reliable postal service to deliver the goods ordered, it's to no purpose.
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Hi
I would like to add my voice to the question
"what has happened to the Royal Mail pension fund?"
This is a serious question and deserves a full enquiry. The new managers like Adam Crozier were presented as cutting edge managers but have they given themselves bonuses based on profits driven by lower pension fund contributions?
If they have it rather sounds like the banks again in spirit anyway.......
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166. At 11:39pm on 24 Feb 2009, rahere wrote:
Rahere's jealous.
===
It couldn't happen to anyone nicer!
(Except Geoff Hoon!)
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Yellowbelly, post 152:
"My point exactly. On a personal pension you only get 25% of what you paid in back as a tax-free lump sum. The rest is used to purchase an annuity. If you don't build in a guarantee, or if the guarantee period has ended, then the insurance company benefits, not your estate."
Just as a matter of interest, what would you suggest your daughter (or anyone else) does with their accumulated pot of wealth (with or without tax relief) when they reach retirement age?
Live in penury so as to pass it on intact to their descendants?
Or use it to generate income?
If the latter, at what level would you suggest they draw income down? Obviously, they're not going to live forever, so how would you mix the interest element and capital? To last how long?
Personaly, I'm fresh out of crystal balls so I don't know how long I'm going to live and therefore, in what proportions to mix them. But I know a few quite bright actuarial types who may be lacking in social skills but are very good at balancing expectations across a large group and coming up with an answer that is, if not so profitable for me (in the current circumstances and interest rates), at least understandable.
And they will keep paying an income till I die, whenever that may be. As many of my ancestors were quite long-lived, that could be some time...
So that's what I would go for!
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Post 158 the-real-truth
You say I don't know what I'm talking about and then ask for my qualifications. I would have thought a better course of action would have been to proceed the other way round - and perhaps wait for an answer first.
While, as you say, no qualifications are necessary to post to a blog I have to confess that, many years ago, I worked in financial services. I hold FPC (Finanical Planning Certificate) I, II and III. The first was quite simple and nothing to brag about. The second and third I found quite easy, too - but then, I had spent time studying the matters to be examined, including various taxation regimes and treatments - and it was a bit more compicated then, as you may be aware, what with Group schemes, 'executive' schemes, Hancock annuities, Section 226 self-employed deferred annuities, section 226A (death benefit) - which came out of the same allowance - and then Personal Pensions, which were different again!
Not to mention the special regulations relating to controlling directors.
And - lest we forget - voluntary contributions, additional voluntary contributions (AVCs), GMPs (guaranteed minimum pensions), unapproved pension schemes and the like.
But I managed to get through it all - quite quickly, in fact.
Since I left the sector (without regret) I have maintained a degree of interest. While I can no longer claim to be completely au fait on the current taxation regimes, I get by.
What do I do now? I write for a living. I happen to have written about pensions and the upcoming changes (scheduled for 2012) several times, the most recent being last September. As I'm no longer involved day to day I spoke to a number of people who are, including representatives of the National Association of Pension Funds Managers, some 'boutique' managers, investment managers, life assurance company executives and anyone else in the business who would take my calls and have a chat.
I don't know everything - and don't claim to - but I know a few guys who, together, do...
Yes, I asked them about the removal of exemption from income tax and, having done some basic sums, pressed them on the actual effect. That's where I got the info from.
But I'm quite willing to bow to your greater knowledge if you can explain how a 0.6% annual take from fund values - no matter how big the numbers of £s are - brought the pensions industry to its knees. A 'mean minded and cynical move' it may have been - that's a separate point for discussion - but I believe (and have pressed people on the point) that it has been a useful distraction from the real issues - longer life expectancy and lower interest rates, plus some pretty bad financial and investment decisions.
But that's just me.
(I also have a raft of O-levels, A-levels in English, History and Geography, and studied English and Sociology at university. Some rock'n'roll, politics and applied narcotics may have got in the way but I picked up some useful stuff, as well. But that's by the by.)
"You write lots of words and they scan tolerably well
(Thank you - RJM)
- but you don't have the slightest idea of what you are talking about.
(See above. I respectfully do not concur - RJM)
The abolition of ACT was a mean minded cynical move on many levels., the loss to pension funds was just one of its consequences - but it was a serious consequence.
You suggest you do understand the situation, but say so much that demonstrates that you dont - can I ask your qualification to comment on this? (obviously no qualification is needed to comment on a blog, but I would like to know what authority you think you have on this subject)." (See above - RJM)
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the-real-truth 158
Good name for you I feel as you are exactly right on this. Advanced Corporation Tax (ACT) is to blame for a great many pension schemes collapsing. In 1997 when G. Brown as chancellor removed the tax credits on share dividends in the budget it caused a huge shortfall to occur in pension pots.
This ongoing raid on assets cost the Uk pensions schemes approximately 150 Billion. It caused a lot of end of final salary schemes to close.
There is no doubt at all that G. Brown is to blame for a huge loss of retirement savings.
Brown himself would have gone much further with this tax on pensions, but Blair was very much against any more retirement savings being raided. The CBI advised the Government very much against this particular move saying it would damage pension pots for ever, which has indeed proved the case.
If you remember this all blew up again, just before Brown became PM, and some MPs thought it would ruin his chances of becoming the PM.
In this country we had some of the best pension schemes in the world, now we are being reduced to some of the worst.
I do not know who RuariJM is or what his qualifications are but he is completely wrong on this, and you are right.
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Yellowbelly1959 136
You can draw up to 25% as a tax free sum. However it is to be remembered that you need a heck of a big pension pot these days to buy a decent annuity. They are beginning to get a little better but not much. Probably would be wise to say you are smoker it improves your chances of getting more money, because they expect you to die sooner.
The final salary schemes were the golden goose killed by Brown.
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Come on Jack ,
If they have nothing to hide, then they have nothing to fear!
Open and transparent government was the promise , so lets have some !
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I confess that I am utterly confused on this one. They say the pension pot deficit is dragging RM under but then say they want to keep this burden with the taxpayer and sell the bit of RM that makes a profit (sorry I meant go into "partnership" - more Labour semantics to prove they are not reneging on a promise). We are told it needs to be part-privatised to be modernised yet there are many instances where this approach has cost more money in the long run (PFIs, TFL). I just do not see the case for it.
Clearly it needs to be improved but this is more about the team they put in place rather than public/private ownership. It also needs a firmer hand from the Gov to allow fair competition and not to ham-string RM. Personally I would like it to remain in public hands otherwise I cannot see the same level of delivery service being maintained. Take rural bus services (if you can find one!). They have ceased to be a service and are now a commodity. No profit = no service = more cars.
PS Qualifications to speak on this matter : posted a letter last week.
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Nick
Alan Duncan is reported as saying that the Government has its eye on the Royal Mail Pension scheme's assets of £22 billion. Why aren't you making more of this please?
See following article for details:
http://www.timesonline.co.uk/tol/news/politics/article5338121.ece
Surely this gives more ammunition about the motives of Mandelson and co
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#172. In the run up to the 1997 election, Brown used public anger over the huge profits of privatised utilities to whip up support for the windfall tax (which was probably justified IMO), he also made vague statements about how he was going to close "tax loopholes" that he claimed the rich were using to avoid paying tax. Well with the benefit of hindsight we can now see that "the looholes," were actually the tax breaks given to the pension funds which instead of benefitting the rich alone, helped out millions of ordinary people!
None of this mattered to Brown, in his class obsessed mindset, he probably thinks anyone who has a private pension votes Tory! The other people at blame here are the media. They fawned over Blair in the run up to 1997 and New Labour's agenda and plans were never given any in depth scrutiny. Had they done so they might have picked up Brown's pensions robbery.
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The political psychology of this whole episode deserves a great deal more analysis. The pension issue is a complete red herring - of course the government can pay pensions to its own employees - and Brown's (Mandelson's ?) entire strategy is near-suicidal.
So - more analysis, please Mr R !
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At least they have garanteed final salary pot that the goverment WILL bail out.
IN Jan 2008 my private pension pot was valued at over £250k
In Jan 2009 Iits value had fallen to below £100k.
In Jan 2008 my predicted pension was a livable 20k per year, this year its predicted to be under 3k per year.
As with all private pension savers i have been hit by the following;
massive drop in share prices
massive fall in anuilaty rates
loss of dividened tax credits
having to pay insurance incase other funds collapse (on my two small ocupential pension funds)
massive rise in fund managerment fees (gone from 1-2% 10years ago to 3-6% now)
Also indirectally massive council tax rises to pay for civil servents pensions.
I'm not allow in having been hit hard on my funds and there is a LOT of resentment that civil servents are having their pensions gold plated and garanteed when us the work man is getting sharfted.
My 15years of pension savings will give me a pension that just about cover my council tax! IE my savings and cut backs for 15years will go directally to paying some ex council workers pension!
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garethm2 177
What is so annoying about this, is that MPs pensions are ring fenced and they keep topping theirs up with tax payers money. Brown himself will leave office with huge pension. Brown rambles on about social justice while taking ordinary peoples future away from them.
No wonder MPs do not do the job as a vocation anymore, what with expenses like Balls and his wife get and then a nice pension, its a 'good little earner' as they say.
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Nick,
surely there is a simple solution to the the problem of the Royal Mail Pension Fund.
The government sets up a holding company to manage the assets of the Fund, the whole of the assets are then transferred to this this new holding company. The government then sets a maximum pension that will be payable, remember it would be augmented by the state pension. Therefore, all of the assets comeunder government control, independent control of course.
Now, this could be done for all pension schemes, all contributions go into the Fund and are managed by the state. The same with the coal miners, the gas board, British Airways, all the former state companies which have been privatized. The state can run the economy through this holding company. The state will control all companies because eventually they would have majority holdings in all companies. The plan will have succeeded, a socialist state, completely wrecked, we are all serfs now.
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RuariJM
You mix up lots of things and get the wrong answers.
20% of dividend income disappearing is still massive, especially when compounded on a long term investment (like a pension fund).
You are also assuming an extreme position where a pension funds holdings remain static (one dividend payment per year).
The other extreme would be (averaging out, 100 ftse companies, 1 dividend a year each) - so theoretically a fund could be moved around to receive 100 dividends a year each of which would be worth 20% less, and the compounding loss increased twice weekly.
Neither position is going to occur in reality, but the truth will be in between - it just isn't as 'simple' as you see it.
The ACT issue isn't the only thing that killed pension values - but it was a significant and unnecessary/unexpected hit that was entirely the responsibility of our clown in chief. Its not his only crime against pensions (others include him artificially raising the price of gilts), but one of the most notable ones.
Life expectancy changes, stock market movements etc were all known considerations and allowed for (to some extent) - Browns raids were not.
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wombateye 179
Do you know pensions is a subject that gets me hoping mad. The erosion of pensions in this country is a disgrace, most people now will not be able to retire at all in the future.
This Government has encouraged people to spend instead of saving for their retirement. They have raided the pension pots. So a lot of people will have little or no provision at all for old age. I see a great deal of poverty in the future. After all there will be trades where you cannot work until old age, building trade etc
The public sector should be subject to exactly the same pensions as the private, after all it is tax payers money. This Government has been so in bed with the unions it has been afraid to take this on, for fear of strikes.
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#
171. At 01:19am on 25 Feb 2009, RuariJM
Do you have access to data showing the average annual incomes of pension providers?
I've tried but cannot find a reliable source.
It may be useful to see what percentage of average income the 0.6% represents.
Could you also confirm that such a ratio is valid?
My thinking is that if average income is (say) 5% then the 0.6% take represents a 12% theft by the Government.
Thanks
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Dear Nick,
Thanks for posting my last message regarding the "Straw veto" scandal.
Re: 120 (Bluematter).
Indeed a fresh wind is needed to blow all the old poisoning attitudes away. Take a look at the Obama manner. At least he's genuinly trying to reform with the goal of a fairer society and more HONESTY. Yes, also for the ruling classes.
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I've read quite a few comments on here about the loss of pensions. I fall in to that category and I rue the day I ever listened to government when I voluntarily increased my contributions, which had a detrimental effect on our standard of living.
What really grates, is when I hear about a black hole in the pensions of MP's which was plugged, very quickly, using taxpayers money!
I need 2 minutes with GB, and then I need a good lawyer!
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#180 Susan-Croft
But how do you ensure that MPs feel the pain they are inflicting on us?
Anything that makes their job harder will be rejected as damaging their constituents...
One measure that seems reasonable (as a start) would be to ban MPs from taking foreign holidays until things are sorted. It would demonstrate support for the UK economy, reduce their carbon foot prints (which some people seem to care about) and for many be a substantial reduction in their 'quality of life' so giving them a bit of a taste of our pain.
Any ideas?
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Nick,
I must confess to a certain amount of schadenfreude with regard to this issue. El Gordo has been asking for this as a consequence of all his past misdeeds.
The PO pension pot has been in trouble for some time, but the GOVERMENT, as owners and paymasters, has done nothing. In any event it was his action regarding tax credits which has exacerbated the problem, not just for PO pensions but for all.
The state is going to have to pay, one way or another. Are we really expected to believe that a foreign investor, such as TNT, will pay £6 billion for a 30 pecent stake? If not, how much is envisaged for the 30 percent stake? Any shortfall will be what needs to be picked up by the poor old taxpayer.
Is this the right time, in an economic downturn, to be selling off a national asset?
Will any price that is realised not be "too cheap", given that there are few immediate prospects of major profits, so nobody will pay "top dollar".
I saw that Meddleseome being interviewed on TV yesterday, and he had the gall to deny that the plan was to part privatise the Roal Mail. Instead he planned to "use" foreign investors, in what way we can only guess, given his past form.
Two things strike me - one, he's certainly not being honest, open and above board in whatever his dealings are, and two, he seems to be unaware that British TV programmes can be picked up anywhere in Europe. If TNT, or any other major company, is envisaging getting into business with HM government, then they will have somebody monitoring bsuiness and political news, since they are almost indivisble now, and it is inconceivable that they would miss comments like that. Crass isn't the word for it.
Seems to me, with backbench Labour MPs in open revolt, that this is the ideal time to get the government defeated on this issue when it comes before parliament, despite having an almost instinctive antipathy to state ownership of any enterprise. That's where the schadenfreude comes in.
The problem for the government is that it doesn't do joined up thinking, and it certaily doesn't look beyond the immediate soundbites when it comes to making policy to handle the current crisis.
Bailing the banks out in the way that was done was a mistake, but its done now. To turn down a plea for financial assistance from a foreign owned "British" business makes no sense, and certainly is inconistent with staements that the governemnt will do whatever it takes. And attempting to sell off some of a state owned business in the curent economic climate makes even less sense, and is even more inconsistent.
Of course there is another issue here that seems to have slipped past the consciousness of the Labour leaders - this dredging up of the state of the pension funds affects a lot of retired PO workers. AND, by connotation, other retired workers will feel threatened, since the government doesn't seem to undrestand simple justice or common sense.
We'll see if El Gordo has the nerve to push on with this, since it seems to me to be the issue that will ondemn him to history as the worst PM we've ever had, and will contribute to the unravelling of his mythical powers as a chancellore, something that is already happening.
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#187. At 09:40am on 25 Feb 2009,
shellingout wrote:
I've read quite a few comments on here about the loss of pensions. I fall in to that category and I rue the day I ever listened to government when I voluntarily increased my contributions, which had a detrimental effect on our standard of living.
What really grates, is when I hear about a black hole in the pensions of MP's which was plugged, very quickly, using taxpayers money!
I need 2 minutes with GB, and then I need a good lawyer!
Save money on the Lawyer - opt for a trial by Jury.
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Good grief. What is up with this browser? I can post a test message, but not reply in a polite curteous manner to 3 other posters about a subject that is on topic!
Might as well try it again.
Can Ruari, Susan, Realtruth and I all agree that what has done the damage to the pensions industry is a combination of factors then, some which were overtly political decisions and others that were a combination of market factors and inept fund management?
Ruari appears to have stated his qualification for understanding the subject matter, which none of the rest of us have yet. Its not my specialisation, which is why I asked in the first place and why I was glad that Ruari gave a straight answer to a straight question.
Question is, what do we do about it? What do we want the next Govt, who ever they may be to do to put it right?
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Why no mention of this Nick, which is the REAL reason for the privatisation - the EU demands it.
EU demands opening up the PO to the market
Why are the BBC bloggers (Robinson, Peston) incapable of telling the full story? If a layman can do the research and find this easily, why not the BBC?
Maybe because it casts a shadow on New Labour's craven submittal to the EU?
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187#
Dunno about two minutes and a good lawyer... more like 5 seconds, within 20 yards and a carefully lobbed Hanoi pineapple.
The phrase "Fire In The Hole" springs to mind!
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171. At 01:19am on 25 Feb 2009, RuariJM
"But I know a few quite bright actuarial types who may be lacking in social skills but are very good at balancing expectations across a large group and coming up with an answer that is, if not so profitable for me (in the current circumstances and interest rates), at least understandable.
And they will keep paying an income till I die, whenever that may be. As many of my ancestors were quite long-lived, that could be some time..."
===
Where do you think Insurance Companies are making all their profits these days? Their annuities departments, where they operate a cartel.
===
"Terry Arthur is an actuary whom some describe as a "maverick". But, having taken extensive soundings across the profession, I found no one who could question either his ability or integrity.
So when Arthur, a fellow of the Institute of Actuaries, calculates that Brown's 1997 policy move has cost pension schemes between £100bn and £150bn, much more than previous estimates, we should take him seriously. And when a smart outfit such as Watson Wyatt backs him up – as it now has – we should listen very carefully indeed.
Until now, estimates of the impact of the ACT change have simply totalled up the annual loss to pension funds – around £4bn-£5bn – over the nine years since 1997, then added some compound interest. That produces estimates of £40bn-£50bn.
But Arthur says Brown's 1997 move had an immediate one-off impact on the value of equities owned by pension funds.
"That's because share prices represent the sum of discounted future dividend payments," he says. "But the Chancellor removed the future tax relief assumed in those 1997 share prices – an amount that would itself have grown over time as the dividends were retained."
This is complicated stuff. But Arthur argues – and every other actuary I've asked agrees – that it is this "one-off hit" on shares invested in pensions that should be compounded up over the past nine years. That produces a total – depending on the discount rate you use – of £100bn-£150bn."
http://www.telegraph.co.uk/finance/2948958/The-would-be-PM-who-cost-us-andpound100bn.html
RuariJM, are you saying that a loss of GBP150 billion is insignificant to pension funds?
I recommend thae above article to you.
Oh, and by the way, AFPC, with G10, G20, G30 and G60 (Advanced Pensions).
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On the matter of the pensions, my partner is delighted to help out. She's self-employed and cannot afford to save for her own pension, but is nevertheless expected to contribute c25% of her council tax towards council workers' pensions, and soon she'll be contributing to Royal Mail workers pensions. And that's ignoring that part of her taxes which go towards all public sector pensions.
Good stuff.
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I wonder if an member of the Labour government over the past 11 years has a sense of irony.
Mr Straw, who for some inexpicable reason has been given every opportunity to show how poorly eqippped he is for every major position in government, now tells us that we cannot view cabinet decisions that have had a major impact on our lives (the citizens lives, that is) under the FOI act that this government passed. This is despite the fact that the body they set up to ensure the act would work as described said we should see them.
So we can see Labour democracy at work. Is it any wonder that everybody is so sceptical about the "supposed" benefits of ID cards, and that they would not misuse 42 days detention? And we currently have evidence about compllicity in torture of terror suspects.
Trust in this bunch of incompetents has long since been eroded, and all we are waiting for is the chance to condemn them to ignominious defeat at the next election.
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188#
Simple. Make anyone who holds public office stand for either re-election every year or subject them to the same kind of invidious "performance review"/appraisal as the rest of us mortals.
Overwhelming opinion being that you aint up to it? Not engaged enough with the public that put you there to do the job? Not explaining why you're doing what you're doing so that the public understand that they're in for crap times?
Then out you go.
That'd focus their minds a bit less on lining their own pockets and more on representing the electorate. If they wont engage with us voluntarily, then we must force them to.
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Fubar_Saunders 193
I do not often disagree with you, but find myself doing so.
You have no idea what qualifications people have on here and I am certainly not going to list mine just to impress people.
Sometimes people may come across as being clever, because they do not speak in plain language, but if you take that out of it ,you may see the truth.
Also you need to look up certain qualifications to find out what they amount to.
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Just seen PM's statement on the subject. Very sensitively dealt with.
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Just read some info from a royal mail worker about this pensions thing. He says:
The final salary scheme ceased in April 2008
Royal Mail took advantage of a pensions payment holiday scheme during the 1990's and into the 2000's. The monies were going directly into government coffers. This gentleman believes the reason was to help keep taxes low.
Does this mean their pension fund has been plundered by parties unknown?
Wonder who/what is interested in buying the government stake in Royal Mail? And will the proceeds all go into the black hole for the pensions?
Or is this worker barking up the wrong tree?
Moderators-FYI this article is on the BBC Kent site, so please don't moderate this post!
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""190. At 09:50am on 25 Feb 2009, Fredalo wrote:
#187. At 09:40am on 25 Feb 2009,
shellingout wrote:
I've read quite a few comments on here about the loss of pensions. I fall in to that category and I rue the day I ever listened to government when I voluntarily increased my contributions, which had a detrimental effect on our standard of living.
What really grates, is when I hear about a black hole in the pensions of MP's which was plugged, very quickly, using taxpayers money!
I need 2 minutes with GB, and then I need a good lawyer!
Save money on the Lawyer - opt for a trial by Jury.""
-------------------------
You mean while it is still applicable in English law.... before the EU abolishes it....
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the-real-truth 188
What can we do to pull MPs in line here we go.
I would make them subject to the same pensions as the private sector.
I would cut all housing allowances, by buying up housing stock owned by the state, within the London area for those who need a residence outside their constituency. As one MP leaves office another takes up residence. Therefore there should be no need for expenses for housing or for furnishing, rather like number 10 and 11 works. Any expenses over a certain amount say £25 would have to be accounted for.
Next I would make them work more of the year, for instance when this banking crisis began MPs were on holiday. We cannot have a country without Parliament for so long.
I would stop all unnecessary trips abroad, just for spin, like who got to meet Obama first.
I would curtail free lunches, only lunches which are necessary to the workings of Parliament should be allowed.
This would be my starting point for reform, you may then get back to having MPs who really want to be there.
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203#
Susan:
Fair enough, agree to disagree, thats fine, I have absolutely no problem with that. We cant all see things from the same perspective.
If there are subjects that I dont know anything about then I think it is prudent to listen to a variety of opinions and perspectives from people who do have a sounder footing in these subjects and then make up my own mind. From experience and you may have also found the same, the first instinct is usually the correct one. I personally find it comforting to have that instinct either validated or vindicated. But thats just me.
Ruari's is but one perspective. He made a statement that I wasnt sure of and I didnt initially agree with and I asked him politely to explain himself. This he then did with no quibble and that was fine, thats all I wanted. He stated what qualified him to speak on the subject and that I also accept. I note in a post above that YellowBelly has done something similar presenting a different perspective. Again, absolutely fine, thats one of the ways I learn about things. Both of them presented their views with evidence to back it up, without it turning into a bunfight.
I can now read between the lines on both perspectives and make my own mind up. Isnt that what we should all do? None of us have an exclusive on the truth.
Deep down, I still retain the view that Gordon becoming Chancellor, he and Geoffrey Robinson removing the dividend tax credit and the predicament that the pension funds have found themselves in over the last few years to be inextricably linked. Cause and Effect. That much hasnt changed.
But, now I'm beginning to understand that there may have been other factors that came into it too, like ACT, which I wasnt aware of and I have learned from fellow contributors.
You're right, I dont know everything, certainly about peoples qualifications, but thanks to taking an interest and having a pretty decent comprehensive education, I can take a pretty good semi-educated punt at a number of subjects.
Thats just the way I find stuff out. By all means, feel free to disagree, thats cool. Its what a free society is meant to be about, after all.
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Yellowbelly 1959 196
Absolutely correct.
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Fubar-Saunders 193
Yellow is saying exactly the same as I did in my post.
Where I disagreed with you was not on the topic that is up to you to decide. It was that you made a statement saying can we all agree that it was a combination of factors. The answer is no we cannot.
Next you said RuariJM has the qualifications, which none of us has, that was a sweeping statement and I felt it needed addressing.
I can tell a political statement a mile away and RuariJMs was such. I have heard this claptrap from Labour MPs before.
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Why on erath would anyone believe anything that Mandelson says?
What I don't understand is how after leaving government allegedly in disgrace, he is now back in with a title to boot.
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Yellowbelly -
An interesting article, if clearly tilted to one side. I think you should have also included the crucial line "the total loss – when summed to perpetuity..."
Well, my total earnings, when summed to perpetuity, are into the Billions of Pounds. Sadly, my bank doesn't agree!
I don't argue that the impact of removal of tax relief was without impact - I do argue that it was the single thing that brought the industry to its knees and led to the closure of 'thousands of pension funds'. Its actual impact is open to debate - but I think terry Arthur needs to check his calculator, or his assumed rate of compund interest. For the first 'hit' (GBP6bn) to have had an impact of over GBP100bn, over nine years, it would have to have been compounding at a rate in excess of 30 per cent. I don;t know where he could ahve got that rate of return.
I repeat again: of much, much greater impact are increased lifespan - so any pension has to be paid for much longer than envisaged even as recently as 15-20 year ago - and and low interest rates, which mean larger sums are needed for funding. Also of importance wa the change in guaranteed minimum funding regulations, as the article alluded to. Going from a 20-year look to just 10 years has placed intolerable burdens and is why the big schemes - like the Post Office's - swing from mouthwatering surpluses to eye-watering deficits in very short order.
The removal of tax relief is being used as a political stick, on the one hand, and a distraction from realities on the other. There is an overwhelming need for the realities to be faced and one of them is that our working lives should be longer - I expect to work till I'm at least 70. If we went back to the situation when mass pension schemes came in, it would probably be 75, lifespan has increased so much - and I have no doubt you realise that is the case. It would be very, very difficult (politically) to introduce it. Remember the headlines when Bliar suggested raising standard retirement age was a topic worth discussing?
Thanks for letting us know your quallies. I didn't ask but it's nice to know!
Susan-Croft: if you think you can tell a political statement a mile away, then I suggest you visit Specsavers.
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229#
Susan, I apologise unreservedly if that is the way it came across. That is not what I intended. I do not mean to belittle anyones contribution, but it has struck me that knowledge of the subject matter can sometimes help one be more convincing.
When I was saying "can we all agree" it was a genuine question. The answer, as you rightly say is no we cannot. That is fine, as I said before, we can all make our minds up with the different information and perspectives presented before us.
I certainly had no intention of putting anyones nose out of joint.
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Just a quick calculation from an interested layperson to illustrate the point about interest rates/longevity.
At an annuity rate of 10% (the Equitable Life's guaranteed minimum, for interest) and average life expectancy of 7 years at age 65 - extended in a normal conservatively actuarial way to 10 years - then a fund of £200,000 would have bought a level pension of around £35-£40,000 a year.
At an annuity rate of 5% (if you can get it) and life expectancy of 20 years at age 65 (actuarial conservative principles again) the same £200,000 would get you about £11,000 a year.
A decrease approaching 80%.
Just an interested layperson's calculation but it illustrates the point - longevity and interest rates are far more devastating than the ACT issue.
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233. At 12:15pm on 25 Feb 2009, RuariJM
"I do argue that it was the single thing that brought the industry to its knees and led to the closure of 'thousands of pension funds'."
===
I never said it was. Medium dated gilt returns and increasing longevity will also have had an adverse actuarial effect on annuity rates.
My contention is that taxing previously untaxed funds have a significant and negative effect on pension funds, from the long term assumptions used for defined benefit schemes right down to the investment returns on defined contribution schemes.
===
"but I think terry Arthur needs to check his calculator, or his assumed rate of compund interest. For the first 'hit' (GBP6bn) to have had an impact of over GBP100bn, over nine years, it would have to have been compounding at a rate in excess of 30 per cent. I don;t know where he could ahve got that rate of return."
You didn't read the article, did you?
"Until now, estimates of the impact of the ACT change have simply totalled up the annual loss to pension funds – around £4bn-£5bn – over the nine years since 1997, then added some compound interest. That produces estimates of £40bn-£50bn.
But Arthur says Brown's 1997 move had an immediate one-off impact on the value of equities owned by pension funds.
"That's because share prices represent the sum of discounted future dividend payments," he says. "But the Chancellor removed the future tax relief assumed in those 1997 share prices – an amount that would itself have grown over time as the dividends were retained."
This is complicated stuff. But Arthur argues – and every other actuary I've asked agrees – that it is this "one-off hit" on shares invested in pensions that should be compounded up over the past nine years. That produces a total – depending on the discount rate you use – of £100bn-£150bn."
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233. At 12:15pm on 25 Feb 2009, RuariJM
If we went back to the situation when mass pension schemes came in, it would probably be 75, lifespan has increased so much - and I have no doubt you realise that is the case. It would be very, very difficult (politically) to introduce it. Remember the headlines when Bliar suggested raising standard retirement age was a topic worth discussing?
===
Politicians interfere in pensions matters all the time.
What other reason is there for going against nature and actuarial convention by insisting on unisex annuity rates for securing Protected Rights pensions.
An absurdity if ever there was one.
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236. At 12:33pm on 25 Feb 2009, RuariJM
Just an interested layperson's calculation but it illustrates the point - longevity and interest rates are far more devastating than the ACT issue.
===
Two final questions for you then on this subject.
Do you think pension funds would have been BETTER off or WORSE off than they are now if ACT relief had not been removed in 1997?
Do you think that GBP100 billion is a significant amount of money?
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RuariJM 233
I have perfect vision thank you for your concern. I note that your reply is in more moderate terms now, which is much more pleasing.
I believe in your earlier posts you claim that the removal of tax relief had very little impact, nothing earth shattering I believe you said, made little difference. Now you agree that it did.
As to a political statement obviously Eatonrifle thought the same as me, he is a well known Labour supporter.
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Before giving the Royal Mail to TNT, please have a very close look at what they did to the previously excellent Dutch Postal Service.
Profit is OK, but what about providing a public service: simple things like delivering letters and keeping local post offices open for sending and collecting parcels.
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Yellowbelly (241) -
The funds would clearly have been better off with ACT relief than without. If you look at my postings on the subject, I never argued otherwise, nor that it didn't make a difference - my argument was one of the actual impact, in context.
One can go into investment strategy and ask why the fund managers didn't shift their emphasis to growth, rather than income stocks (as they do in the USA, for example), or why not switch to income-producing Bonds at retirement for pensions in payment but that is another discussion.
As for the 100bn - of course it's a lot of money in absolute terms but I would hope that I made clear that I don't accept Terry's parameters - where on Earth does he suggest that the funds would have got annual returns in excess of 30 per cent? Maybe Zimbabwe (or latterly, Iceland) but inflation would have more than rendered that worthless.
But one must bear in mind the relative value. As I said, the impact of the withdrawal of ACT relief actually had an effect of less than 1 per cent of the funds' value, annually (0.6 per cent, to be precise). I also said that, no matter how the (raw) numbers add up, that impact was not earth-shattering.
The greater impact - the vastly greater impact - is longevity and interest rates. I hope you will, in your turn, accept that fact.
Even if it doesn't fit in with any particular political or other agenda you may have. It is noticeable that a number of posters on this forum have a very clear political agenda in this discussion. Just a word of warning to them - if you are distorting the facts, or ignnoring them for expediency, then the argument you seek to make will fail, because it is - quite literally - unrealistic. When/if the Tories return to power, they will face exactly the same reality in the pensions universe - increased longevity and low interest rates. If a new government was to reverse the abolition of ACT relief, it would not get anywhere near overcoming those overwheming realities.
It would be much, much better if we had a revival of the post-War consensus in this area, if all parties recignised and accepted reality and worked together to create a framework on which all were in agreement. Pretending that the elephant isn't in the room leads to broken promises, disappointment, despair and anger. Especially when people realise they have been either lied to or treated like children, unable to understand the complexities of the big peoples' discussions.
The people should be taken into the confidence of the industry and the governing classes. The facts should be explained, clearly, and a realistic discussion of options - such as raising standard retirement age - should not be seized upon as a 'gaffe' or something outrageous, but discussed in an adult manner.
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Susan-Croft (242):
With the exception of the odd 'codswallop', I don't think I have been anything other than moderate and reasonable. I have not been trying to make any political points whatsoever and I would ask you where, exactly, I have. Being congratulated or thanked by someone I have never met and do not know personally doesn't qualify as a political comment from me.
If you maintain that I said "the removal of tax relief had very little impact...made little difference" then please point out where - from my writing, rather than asumption. I never denied it had an impact; what I have said, repeatedly, is that in context it was not earth-shattering, no matter how big the sums look. The pensions industry is worth in excess of 1 trillion Pounds: that's the context.
Longevity and low interest rates have had a vastly greater effect. It may not suit certain political agendas or prejudices but it is, indeed, the case and the sooner everyone accepts it, the sooner we shall be able to work out an effective resolution. Whatever perrsonal or political beliefs people may hold.
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I see some of my post today have been removed.
May I remind you of your own house rules:
"If one of your messages is removed you will be sent an email explaining why. If you feel one of your messages has been removed unjustly, please reply to that email"
I await your emails, none received to date.
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It's the Directives, stoooopid!
Long and tedious discussions from political hacks have been devoted to Gordon Brown's "controversial" plans to part-privatise the Royal Mail. Not least has been the oft' posed question, "why is he putting himself out on a limb like this, when it is so unpopular?"
The subject is heavily rehearsed in the print media and online, where the likes of The Guardian purport to give us a complete background briefing, while Edward Heathcoat-Amory tells us in The Daily Mail that privatisation is essential for the survival of the service.
But nowhere will you find any mention of the real reason for Brown's "enthusiasm" (at least, not anywhere I can find). What you do see though, is news that the Tories are considering helping out Mr Brown in his endeavours to implement the Postal Services Directives. And he really needs their help. The "full market opening", under EU rules, must be in place by 2010.
It thus comes as no surprise to learn that Kenneth Clarke has promised to vote for the part-privatisation plan. That really tells you all you need to know. But are the Tories really that stupid? Or is it, as Iain Dale suggests, they don't know how to spell o-p-p-o-s-i-t-i-o-n?
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Yellowbelly and I agree on something - having checked the House Rules I can see no reason why my post no. 234 was removed, nor those that it related to (either before or after)
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yellowbelly 1959
I saw the report on Lord Ahmed.
Twelve weeks for killing a man is not justice - and I've heard reports that he will probably only serve half of that sentence. He was charged with dangerous driving. It should have been manslaughter.
There really are laws for people in parliament which can be flouted and bent, and separate laws for the rest of us, which can't!
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248. At 2:23pm on 25 Feb 2009, RuariJM wrote:
Yellowbelly (241) -
...where on Earth does he suggest that the funds would have got annual returns in excess of 30 per cent? Maybe Zimbabwe (or latterly, Iceland) but inflation would have more than rendered that worthless.
===
He never said that. Where on earth do you get that figure from? I suggested that you reread the article, and even posted the relevant part for you to make it easier.
Did you reread the article? If so, you would see where the GBP100 billion figure came from!
===
"Until now, estimates of the impact of the ACT change have simply totalled up the annual loss to pension funds ? around ?4bn-?5bn ? over the nine years since 1997, then added some compound interest. That produces estimates of ?40bn-?50bn.
But Arthur says Brown's 1997 move had an immediate one-off impact on the value of equities owned by pension funds.
"That's because share prices represent the sum of discounted future dividend payments," he says. "But the Chancellor removed the future tax relief assumed in those 1997 share prices ? an amount that would itself have grown over time as the dividends were retained."
This is complicated stuff. But Arthur argues ? and every other actuary I've asked agrees ? that it is this "one-off hit" on shares invested in pensions that should be compounded up over the past nine years. That produces a total ? depending on the discount rate you use ? of ?100bn-?150bn."
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Business Secretary, Lord Mandelson has introduced the controversial bill which would part-privatise the Royal Mail, a day earlier than expected.
The plans to sell off 30% of Royal Mail were not debated and were given a First Reading in the House of Lords.
There were protests against the plans on Tuesday and 130 Labour MPs have signed a motion opposing them.
Labour peer Lord Clarke, a former postman, shouted "shame on you" as Lord Mandelson introduced the bill.
Details of the Postal Services Bill will not be published until Thursday but the government wants to sell a 30% stake of the Royal Mail, to help fund modernisation but insist overall its ownership will stay in public hands.
http://news.bbc.co.uk/1/hi/uk_politics/7910876.stm
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Why has this announcement been made a day early?
Surely, surely not another "good day to bury bad news" moment?
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yellow @ 134
Clare Ward, so just in the same mould ....
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248. At 2:23pm on 25 Feb 2009, RuariJM wrote:
Yellowbelly (241) -
The greater impact - the vastly greater impact - is longevity and interest rates. I hope you will, in your turn, accept that fact.
Even if it doesn't fit in with any particular political or other agenda you may have. It is noticeable that a number of posters on this forum have a very clear political agenda in this discussion. Just a word of warning to them - if you are distorting the facts, or ignnoring them for expediency, then the argument you seek to make will fail, because it is - quite literally - unrealistic.
===
What exactly are you implying with that statement? What are my politics, do you think?
And check my post below timed at 12.47pm which answered the question you raised about interest and mortality rates two hours before you raised doubts about my position on that matter.
238. At 12:47pm on 25 Feb 2009, yellowbelly1959 wrote:
233. At 12:15pm on 25 Feb 2009, RuariJM
"I do argue that it was the single thing that brought the industry to its knees and led to the closure of 'thousands of pension funds'."
===
I never said it was. Medium dated gilt returns and increasing longevity will also have had an adverse actuarial effect on annuity rates.
===
I suggest you read things properly before making unfounded comments on them. As you have clearly misunderstood Liam Halligan's article for a start, and misrepresented my political beliefs as well.
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I see the sombre occasion in the house didn't stop Mandy from delivering his plan.
Must have helped to have most things suspended and be able to deliver it in the Lords away from most of his critics
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I hear that Lord Ahmed may be thrown out of the labour party because of his conviction.
I had thought a conviction meant instantly being unable to hold public office. Maybe the rules have changed?
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Yellowbelly (255) I read the article and understood what wa sgoing on. I think I was quite polite about it, to be fair.
When you cut through the flim-flam (there's a lot of that - designed to bambozle the unwary and make it look authoritative, I suspect) and analyse the central claim made - as I have - it starts to unravel. As I have already indicated in post 233
"For the first 'hit' (GBP6bn) to have had an impact of over GBP100bn, over nine years, it would have to have been compounding at a rate in excess of 30 per cent. I don;t know where he could ahve got that rate of return."
Quoted verbatim, complete with mis-types.
Repeating an assertion ad nauseam doesn't make it true - it merely activates the 'nauseam' bit.
He claims that the original hit has had a cumulative effect exceeding GBP 100 bn, perhaps as much as 150bn. I quoted the article "the total loss ? when summed to perpetuity..."
Perpetuity? Come on - I can spot flannel, obfuscation and active pulling of the wool when I see it. The argument is switched from 9 years to perpetuity and the distinction is blurred, so the unwary will be taken in. On close analysis, of course, he can claim a form of words that he's not actually saying the abolition of ACT relief resulted in 100bn-plus costs over 9 years (the article was published in 2006). It's kite-flying, running a big and frightening number out into the public domain and seeing who will fall for it, which news organisations will take it up and give it publicity.
There weren't many. And none without a sympathetic agenda.
He may be described as a 'maverick' - that's quite restrained. One of the definitions of the word is 'trend-setter' - I don't see many people following any of his trends; he's pretty much on his own amongst his peers. His claims are just too ridiculous.
An earlier definition of 'maverick' was something along the lines of a wild bull or uncorralled steer. He's not just out of the corral, he's on a different farm entirely, one that isn't heavly populated by others of his practice. It may even be on another planet. He may be a Fellow of the Instutute of Actuaries; that's a distinction achieved by passing the exams under the terms set at the time. It doesn't prevent one from spouting garbage afterwards.
BTW - if you're so much of a fan of Mr Arthur, could you remember to mention next time you quote him that he's a prominent member of/contributor to both the Libertarian Alliance and the Taxpayers' Alliance? I have no objection to people belonging to or supporting either of those organisations (tiny as they are, they need all the friends they can get) but it would aid general understanding if his involvement was mentioned.
The article in the Telegraph was published in 2006, while it was still striving to escape the enduring Conrad Black influence. It's a much better paper, these days, and less likely to publish such things as that.
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RuariJM 249
The post I refer to is 106.
I do not agree with you on pensions and Yellow has provided you with all the evidence you need. Therefore we must agree to disagree as I do not think you are a person who will change your mind
It may be just your manner, so I apologise in advance if it is, but you do come across as a bit arrogant.
You state that it is a not a political statement. However, it is the usual argument most Labour MPs make on pensions including Brown.
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Robert Pestons blog is an eye opener, more trouble ahead for Brown.
I knew it was a failure in regulation but this is mind blowing.
Here is the proof it was all Browns fault.
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145 Sicilian
wrote
"Give me strength! For the zillionth time NO! the recession is not all down to Gordon Brown and NO! The BBC is not biased and NO! we just don't know how The Conservatives would have handled the mechanics of the present situation but YES! Gordon Brown is partially responsible for making us uniquely weak to tackle our present predicament."
Hey my teacher friend, my views of this board are not aimed exclusively at you.
Are you honestly saying you haven't noticed the absolute obsessive paranoia on here about BBC (left wing) bias??
Glad to see we share the same view that the BBC is in fact not biassed.
As far as the UK being "uniquely weak" I think if you asked the Irish, Icelandic, Greek, Spanish and possibly even the French, Germans and Japanese they probably feel the same about their own economic woes themselves.
From yesterday, Japanese exports down 45% and their worst trade deficit in history!!
Its tough everywhere in almost exactly the same ways and extent.
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How about - OK we agree to lose our pensions but in return you don't privatise Royal mail one bit.
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MPs are today calling for home secretary Jacqui Smith to release a report detailing the police's handling of the Damian Green affair.
The Press Association reports a cross-party motion signed by senior MPs such as David Davis, Menzies Campbell and Keith Vaz asks for a report by British Transport Police chief constable Ian Johnston to be made public.
According to the motion, signed by 96 MPs, the report "has been withheld from public scrutiny and from Parliament despite the fact that parts of the report were released by the Metropolitan Police on 16 December and used in comments by Assistant Police Commissioner Bob Quick".
The Metropolitan police have admitted that the report had raised question about whether "elements of the investigative approach meet current policy and best practice".
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Two days running we have had senior government ministers suppressing information that would clearly be in the public interest.
It really is shameful behaviour.
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Fred Goodwin could advise Crozier and Mandelson on the pension problem.
For those that don't know, Crozier is the highly successful CEO of the Royal Mail.
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Susan_Croft (262)
"You state that it is a not a political statement. However, it is the usual argument most Labour MPs make on pensions including Brown."
If they did (and I don't think the majority did) then they were correct. I suspect your belief they did is a chimera, a construct. Reality - the truth - is not a political position. Unless you're Pontius Pilate.
Do I come across as arrogant? Well, I shall try to live with it.
And with that - adieu.
For the moment!
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261. At 7:26pm on 25 Feb 2009, RuariJM
Who said I am a fan?
"Terry Arthur is an actuary whom some describe as a "maverick". But, having taken extensive soundings across the profession, I found no one who could question either his ability or integrity.
So when Arthur, a fellow of the Institute of Actuaries..."
...but he is a fellow of the Institute of Actuaries and served as a member of Council of the Institute of Actuaries for almost 20 years until 1994, so I would take his word over yours.
"could you remember to mention next time you quote him that he's a prominent member of/contributor to both the Libertarian Alliance and the Taxpayers' Alliance? I have no objection to people belonging to or supporting either of those organisations (tiny as they are, they need all the friends they can get)"
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I am sure he is mightily relieved that you have no objection to him being a member of these organisations!
The Labour Party had 198,026 members on 31 December 2005, I am sure they they need all the friends like you that they can get!
===
What relevance does his membership of The Libertarian Alliance and The Taxpayers' Alliance have, by the way?
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Yellowbelly (270)
"Who said that I'm a fan?"
I did.
Just an impression I got from your devotion to something written 2.5 years ago, extremely fringe then and largely ignored subsequently - except by fans.
When quoting something, could you remember not to omit important bits, like "but it would aid general understanding if his involvement was mentioned." (me)
He can think whatever he likes, even if it's flat-Earth nonsense: I support free speech, especially for those I disagree with. But it's equally only fair, after all, to let people know where the opinion is coming from.
"What relevance does his membership of The Libertarian Alliance and The Taxpayers' Alliance have, by the way?" (you)
They're both pretty extreme anti-state, right-wing 'libertarian' organisations. They're against taxation in all forms and in favour of total individual 'freedom' - that which only the rich enjoy. But the paradox is: they're not rich! They may be complacently comfortable, speak well and feel they've gone to the right schools and have the right connections but that isn't rich. Come the Revolution, comrade, they'd be up the creek without a paddle, because they have nothing to offer.
They fail to understand that the 'freedom' they espouse leads, inevitably, to the worst kind of anarchism - dog eat dog, devil-take-the-hindmost, law of the jungle anarchy. And although they may feel well-connected and maybe privileged, I'd back a couple of street-smart brawlers against them any day.
Even the Adam Smith Institute tends to brush past, looking the other way.
Membership/suppport of those organisations is something that should be mentioned in discussion, because surely there's no shame attached, is there? Or don't they want people to know where they're coming from?
The espousal of a spokesperson of those tendencies leads me to the conclusion that supporters are beyond the Tory right wing, though they may think of themselves as something like 'Thatcherite Conservatives' - a bit like the Society of St Pius X thinks of itself as the 'true Catholic Church', when all they are is another bunch of destructive, self-righteous, egomaniacs. Talking of which, the Communist Party of Great Britain (CPGB) has more paid-up members than the two of them (Libertarian Alliance and Taxpayers Alliance) lumped together - and the CPGB is irrelevant. I suspect the CPGB has split into more factions than the membership of either of those two bunches of lunatic fringers.
Only partisan, tunnel-visioned right-wingers could fail to see through the veil of inadequacy in Arthur's argument to the core beneath: fanatical, partisan, unrealistic, distorted, self-serving rubbish.
His membership of the Council of the Institute of Actuaries is worthy of note. Sadly, other prominent people have blotted their copybooks and obscured distinguished careers by falling foul of foolishness in their dotage, too.
FYI - I am not, and never have been, a member of the Labour Party. I was, however, chairman of my local Conservative Party association, for a little while. People like the Taxpayers Alliance, the Libertarian Alliance and others (mayhap, including their supporters and fans) give the Tory Party a bad name.
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What prospects have our loyal Royal Mail? For 23 years up to the year 2000, the Post Office organisation (Royal Mail) had successfully made substantial profits. In that year, Chancellor Brown deliberately took those profits from Royal Mail and left them severely disadvantaged. He also held secret talks with a Dutch rival, TPG, with a view to selling Royal Mail, then known as Consignia.
However, the cross-party watchdog Postcomm, set up by an Act of Parliament, had no intention of presiding over a postal service that was to be ‘flogged off’ to the Netherlands. This conflict with Brown has come back to haunt his Government. Mr McGovern MP Dundee East, resigned as PPC to Postal Minister McFadden (17/12/08) because hectoring Mandleson is again trying to sell to another Dutch rival, TNT, breaking another Labour Party Manifesto promise.
We now have a dysfunctional Government determined to sell off a vital industry with the loss of 16,000 thousand jobs. This will unleash further industrial unrest on a collapsed economy. The base line is Royal Mail is finished under this Government. History shows Labour voted for the Post Offices Services Bill (which led to the closing of thousands of local post offices) and also agreed covertly to support EU Directives 97/67/EU and 2002/39/EC. This effectively put Royal Mail under unfair competition from German controlled DHL and other Dutch firms and has steadily eroded the profitable parts of the business ever since.
Lets face facts; this Government has turned Royal Mail, since 2000, into a financial basket case, unable to operate an efficient business plan and a mounting pension fund deficit of approximately £7 billion.
They now desperately seek to hide Brown’s years of interference behind a sell off. Hopefully the long-suffering postal workers and public will realise this ‘fire sale’ is a continuation of Labour’s vandalising policies towards the postal service in this country. They have again broken a Manifesto commitment to preserve Royal Mail and tens of thousands of postal service workers’ jobs another example of this Government’s gross incompetence.
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271. At 02:05am on 26 Feb 2009, RuariJM
Thanks for clearing this up.
We can all see now where you are coming from!
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Mandy apparently is attempting to soften up the rebels with some concessions. I wonder what they might be?
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271. At 02:05am on 26 Feb 2009, RuariJM
Interesting post, RuariJM, but more enlightening on your own views rather than the organizations which you 'describe'.
As I've said before those who cannot win an argument with logic and truth, seek to discredit and undermine their opponents with inaccurate and misleading information.
And I certainly see no semblance of truth in your description of Taxpayers Alliance, one of the organizations you describe that I have referred to in the past.
Taxpayers Alliance is a valuable source of information as they 'campaign for lower taxes and better government' - something I would have thought we would all support.
I can only advise any interested to visit the source sites and make up their own minds.
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272. At 05:31am on 26 Feb 2009, BGarvie wrote:
"...History shows Labour voted for the Post Offices Services Bill (which led to the closing of thousands of local post offices) and also agreed covertly to support EU Directives 97/67/EU and 2002/39/EC."
An interesting post BGarvie and a good point not well covered in the mainstream press.
An article which may interest those who are not aware of this
http://eureferendum.blogspot.com/2009/02/its-directives-stoooopid.html
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Further to my posting at 276 I would like to add that the Postal Service performs a crucial service and should not be privatised. This would inevitably lead to higher prices, as it has done in the past, and could very adversely affect those living in remote locations.
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#271 ruariJM
So many words, yet so little meaning. You do appear to have a big chip on your shoulders.
Did Mr Arthur run over your puppy when you were little, by any chance?
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Theres one thing I do not understand in all of this and I would appreciate it if someone would explain it to me about the EU and this Government.
When Brown was Chancellor everyone agreed he was mostly anti Europe. Indeed his behaviour toward the EU whenever he visited there was known to be arrogant, turning his ear phones off in meetings, leaving early when it did not agree with them. Always talking about the 3 tests when Blair was interested in us joining the Euro etc.
How come he has suddenly turned so pro EU, bringing in Mandelson who is known as a great supporter of the EU. Giving Mandelson such power over business which will directly link him to the EU. Now the Post Office which again is said to be about the EU when Brown knows how unpopular this is with his party and voters.
Brown always talking about our future lies in the EU. We obviously as a nation are being pushed towards the EU. The Lisbon Treaty etc.
Now is this because we are a failing nation and Brown sees no other way out. Is it that EU provides cover for his failing over the banking crisis. Or is it that its political, again and that he knows the Union is fallling apart ie Scotland and Independence who favour the EU. That if we join the EU fully this may fade away.
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Sparklet 275
You are right about this I have visited these sites and I know what I think. However I came to the conclusion that there was no point in having an argument with someone with such entrenched views as ruariJM has.
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The economy started to shrink in the second quarter of last year rather than the third, the Office for National Statistics said. It means that the technical recession began in April.
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So we went into recession before the US, now the official figures have been adjusted.
Do you think Gordon Brown will mention this?
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254#
Subject to confirmation mate, I think the geezer was brown bread before Ahmeds car hit his. The victim had done a 360 into the armco and been hit by at least one other vehicle before Ahmed turned up.
So, he hasnt gone down for causing a death on the roads, because he didnt. He went down for texting whilst doing 60 on the motorway.
As a former motorcyclist and someone who still does a lot of motorway miles, I dont think he can be too put out by the sentence and I applaud the fact that he has been made an example of.
Its been an offence for quite a while and he should have no excuse for not knowing that.
Now if the cops could get the other million plus unlicensed, untaxed, uninsured, unsafe bangers and their "drivers" off the road as well, instead of "running constabularies like their own private unaccountable fiefdoms", maybe we'd be getting somewhere.
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Gordon Brown helped fuel Britain’s banking crisis by pressuring the City regulator not to intervene and stop reckless lending, Lord Turner, the head of the Financial Services Authority, said.
The authority’s chairman claimed the regulator was under political “pressure” not to be “heavy and intrusive” with banks such as HBOS and Northern Rock.
Instead, it was told to operate a “light touch” approach, which had now been proved to be “mistaken”, he told a Commons committee.
The failure of the regulator to intervene earlier has been blamed for the banking crisis, which has led to the near-collapse of several of the country’s biggest banks.
Lord Turner’s remarks, made to MPs, are deeply embarrassing for the Prime Minister, who oversaw the FSA while he was Chancellor.
Mr Brown has repeatedly been accused by political opponents of failing to take responsibility for his role in the banking scandal. The latest allegations came as the Treasury prepared to unveil details of another bail-out package to rescue ailing banks.
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/4808373/Gordon-Brown-helped-fuel-banking-crisis---FSA-head.html
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Both the current and previous Governors of the Bank of England, and now the chairman of the FSA all point the finger at one person.
It is becoming clearer by the day who the architect of this UK recession was, Gordon Brown as Chancellor and the Prime Minister.
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Question: When is a bonus not a bonus?
"Gordon Brown said banks seeking help from the government's rescue package had agreed conditions which would "bring an end to rewards for failure" and pledged that directors at Royal Bank of Scotland and soon-to-be-merged Lloyds TSB and HBOS would not receive cash bonuses this year and would get any bonus next year in shares."
Answer: When you call it a pension!
"Royal Bank of Scotland’s disgraced former chief executive Sir Fred Goodwin
has picked up an £8m pension top-up after being sacked by the lender for leading it to a £28bn loss last year, the largest in UK corporate history."
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It really is the last straw for those who have been trying to defend labour.
A labour government using public funds to save the private banks and OTOH it is privatising the royal-mail, something Thatcher didn't even try?
Many people who own the banks nothing will have to pay for their mistakes and many of those people will come from working back-grounds like the royal-mail.
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Fredalo, 185.
I didn't reply to your query - my apologies.
The 3 per cent number (22% of 3% is 0.6%) was the rough average of yield from the FTSE-100 at the time. I don't know what it is today - I haven't checked, I have the other bits of my life to lead!
if the yield was 5% then the impact would be, at current rates, about 1% of fund values.
What is the average income/yield coming in to pension funds? I don't know offhand but you may be able to get that figure from the National Association of Pension Funds. It will probably be a bit higher than 3% because of a proportion of funds will be invested in Bonds, both corporate and governemtn. But nothing like enough, or the funds would not have suffered falls in value as big as we have seen. They are - in my opinion - way overweighted to equities, which are the holdigs that have plummeted in value. Had they held more in Bonds, they would have had a stronger income stream and the overall fall in capital values would have been mitigated by the rise in the value of fixed-interest stocks.
Just as an interesting aside, to illustrate the point: an investment in War Loan 3.5% in 1992 would have produced a yield on the original investment of around 9%. As interest rates have come down, the capital value has risen; it would now be more than twice the original capital, with no income reinvested. And it would still be producing the same income amount, in cash terms.
Your point about 'theft' by the government: your number is wrong but there are some, including voices associated with the Adam Smith Institute and beyond, who argue for the abolition of all tax reliefs and a single rate of tax. I'm not of that persuasion but those who suggest that tax relief benefits large institutions and the better-off, at cost to the majority, do have a point.
And now - back to real life! Adios, amigos.
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Susan_Croft wrote (280)
"I have visited these sites and I know what I think."
Well - I'll go to the foot of my stairs!
I suspect others know what you think, too, Ms Croft.
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285#
Hey Del boy!
You're going to have your work cut out today ol' chap!
Where d'ya wanna start?
Fred The Shred's pension?
Adair Turner?
Police reform?
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285#
Derek:
Indeed compadre; I think they ought to go into pedigree Camel breeding once their time in government is up.
After all, the current stud Camel hasa a proverbial mountain of straws on its back and it still hasnt collapsed just yet.
Its poor old knees have been wobbling like hell for the last 8 months though and its still spitting at anyone who comes near it, particularly if its dressed in anything blue!
I think your undercover work at Draper Towers is almost done mate. Time to return to the fold, where you'll be mentioned in dispatches..... (no, not the one on More 4 on a Tuesday night!)
You know it makes sense. :-)
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Yellowbelly 1959 283
Yes but where is the proper reporting on it today. Fubar and I were talking about this last night after reading Pestons blog.
It all very well us knowing it, but what about the general public.
The banking system was left completely unchecked and it is entirely Browns fault. The FSA and BOE were powerless because of political pressure and the narrow remit they were given.
In my opinion they must not undertake this latest bail out until the toxic debt has been dealt with. The tax payer must not underwrite any more debt, this is madness. The last bail outs have not worked for this reason. RBS must be broken up and ran agressively, calling in debt.
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RuariJM 287
I note you decided to answer a post which was not to you, rather than the ones that were. Sparklet 275 and Yellowbelly 278. Wonder why that would be.
Pardon me if I am wrong but I thought the idea of the blog was for people to know what I think, otherwise what is the point.
However the lesson to learn is that once having given your opinion, and others do not agree, to accept to disagree and move on. Not try to use methods to discredit their sources, and press them on the same subject, in an effort to force them to agree, because you believe that only you are right.
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282. At 09:59am on 26 Feb 2009, Fubar_Saunders wrote:
"Subject to confirmation mate, I think the geezer was brown bread before Ahmeds car hit his. The victim had done a 360 into the armco and been hit by at least one other vehicle before Ahmed turned up.
So, he hasnt gone down for causing a death on the roads, because he didnt. He went down for texting whilst doing 60 on the motorway."
Fubar,
Further input on this from The Times
Of particular note...
"....Mr Gombar and a passenger had escaped to the hard shoulder but Mr Gombar then dashed back to retrieve his mobile phone. One driver saw the Audi at the last minute and managed narrowly to avoid a collision. Another clipped the Audi before Lord Ahmed’s car ran into it."
...
"The peer pleaded guilty to dangerous driving after a police investigation plotted his phone use. He exchanged at least five messages with a journalist as he drove his Jaguar from Junction 40 to Junction 35, where the accident happened."
...
"The court was told that Lord Ahmed sent his last message about two minutes before colliding with the Audi."
ie. that wasn't to say he was not reading or composing the next message.
"Ahmed pleaded guilty to dangerous driving but Mr Justice Wilkie made it clear that the offence had no causal link with the fatal accident. "
(no causal link? - does he mean to the initial accident?)
"The dangerous driving “involved driving at an earlier stage at speeds of around 60 mph along the M1 receiving, reading, composing and sending a series of text messages”, Mr Justice Wilkie said at Sheffield Crown Court."
I think there are still questions to be answered.
Source:
http://www.timesonline.co.uk/tol/news/uk/crime/article5801891.ece
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287. At 11:34am on 26 Feb 2009, RuariJM wrote:
(Re Taxpayers Alliance)
Susan_Croft wrote (280)
"I have visited these sites and I know what I think."
Well - I'll go to the foot of my stairs!
I suspect others know what you think, too, Ms Croft.
#####################
Perhaps those who are interested would like to see the criticism levelled at Taxpayers Alliance by Cllr Daniel Moylan, the Deputy Leader of Kensington and Chelsea Council and compare his view to that of most of the grass roots!!!
And draw their own conclusion
http://conservativehome.blogs.com/localgovernment/2009/02/taxpayers-allia.html
And TPAs response -
http://conservativehome.blogs.com/localgovernment/2009/02/matthew-elliott.html
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I have just received an email from Gordon Brown:
We received a petition asking:
“We the undersigned petition the Prime Minister to resign due to gross financial incompetence in running the British economy.”
Read the Government’s response
The success of the Government’s macroeconomic framework, introduced in 1997, means that the UK is facing the international financial crisis and the recession it has caused around the world from a solid foundation. Credible medium term objectives and mechanisms for short-term flexibility mean that the Bank of England and the Government can deliver the necessary support to the economy without compromising their commitments to low inflation and sound public finances.
The Government’s priorities to get Britain through the recession fairly are to prevent the collapse of the banking system, so that people’s savings are secure and the banks can do their job; to get the financial system lending responsibly again so as to support businesses, jobs and growth; to support the economy and jobs through direct government action, including tax cuts and important investment projects; and to help people through these tough times, from homeowners with difficulties paying their mortgages, or people seeking employment or training, to small businesses with cashflow problems and larger businesses needing working capital.
Action has also been taken to boost our economy by putting money in people’s pockets and bringing investment plans forward. This includes:
· income tax cuts of £145 for every basic rate taxpayer;
· £60 extra for every pensioner in January 2009;
· a VAT cut worth on average over £200 to every family this year; and
· an extra £3 billion investment in projects that will protect and create jobs.
Further details of the measures the Government has put in place to provide real help now so that homeowners, families and businesses can get through the downturn fairly are available online at http://www.realhelpnow.gov.uk/
In addition to discretionary fiscal policy to support the economy through these difficult times the 2008 Pre-Budget Report announced a sustained fiscal consolidation from 2010-11 when the economy is expected to be recovering and able to support a reduction in borrowing:
· restricting the income tax personal allowance for those with incomes over £100,000 from April 2010, and introducing a new additional higher rate of income tax of 45 per cent for those with incomes above £150,000 from April 2011;
· increasing the employee, employer and self-employed rates of national insurance contributions by 0.5 per cent from April 2011;
· to offset the effects of the temporary reduction in VAT, increasing alcohol and tobacco duties, maintaining these increases after December 2009 to support fiscal consolidation; and following a fall in pump prices of over 20 pence per litre from their summer peaks, a two pence per litre increase in fuel duty from 1 December 2008; and
· an additional £5 billion value for money target for 2010-11 and setting assumptions for spending growth from 2011-12 onwards.
We will continue to do everything we can in the current difficult times to give real help now to families and businesses, and help our economy to come through this recession as quickly as possible, and we will take the tough decisions in the medium-term to maintain low inflation and sound public finances. This will ensure the UK is well-placed to prosper in the new global economy which will follow the current global recession.
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I'll take that as a NO then!
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This comment was removed because the moderators found it broke the House Rules.
"Standard Chartered, a British bank that was run by Lord Davies, the trade minister, has been accused by the Foreign Office of 'propping up' President Robert Mugabe's government in Zimbabwe.
Internal Whitehall emails seen by The Telegraph show the concern at the Foreign Office about the involvement of Standard Chartered Bank in Zimbabwe.
Lord Davies of Abersoch was chief executive and then chairman of the bank until last month when he became a trade and investment minister. Standard Chartered is among a handful of foreign banks operating in Zimbabwe. It employs 860 people and has 24 branches there.
However, an internal Foreign Office briefing document accuses Standard Chartered of diverting money to the Mugabe government.
The documents, released under the Freedom of Information Act, say that Standard Chartered had been "diverting" cash to the regime through a loans scheme."
http://www.telegraph.co.uk/news/worldnews/africaandindianocean/zimbabwe/4808007/Zimbabwe-British-ministers-bank-propped-up-Robert-Mugabe-says-Foreign-Office.html
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And people on here were thinking that the ZaNuLabour references were a joke or offensive!!
Maybe Lord Davies is now advising Gordon Brown!
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Here is an interesting Early Day Motion from the House of Commons. The motion has been tabled by the DUP MP, Gregory Campbell and at time of writing has one other signature on it, that of his DUP colleague, David Simpson. The motion is titled "Politicians and the Economic Downturn" and reads,
That this House notes the extent of the economic downturn right across the United Kingdom; realises the significant degree of cynicism that exists among the general public in relation to how politicians are responding to the effect the downturn is having on average families, many of whom are facing uncertainty regarding employment and their standards of living; and recognises the need for politicians, irrespective of party labels, as well as all others paid for out of the public purse, to have an obligation in demonstrating value for money approaches in whatever capacity they are employed and to show cost reductions where possible as a contribution towards the exceptionally difficult economic times in the nation."
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I have emailed my local MP via
http://www.theyworkforyou.com/
to make them aware of this EDM and to ask if they will be signing it.
Why not do the same?
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#293 Sparklet #280 Susan Croft #271 RuariJM
"Re Taxpayers Alliance"
Is this the same Tax Payers Alliance?
http://news.bbc.co.uk/1/hi/uk_politics/7606907.stm
Well then they obviously know what they are talking about!
Yes, I would agree the formula is unfair, fiscal autonomy would certainly clear up this issue.
http://www.scotland.gov.uk/Publications/2009/02/23092643/0
Can anyone provide the statistics which show the amount of revenue collected within each nation? Thought not, as this data is not collected for each region specifically. However here's the best estimate:
http://www.scotland.gov.uk/Publications/2008/06/18170334/0
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293. At 2:15pm on 26 Feb 2009, Sparklet wrote:
287. At 11:34am on 26 Feb 2009, RuariJM wrote:
(Re Taxpayers Alliance)
Susan_Croft wrote (280)
"I have visited these sites and I know what I think."
Well - I'll go to the foot of my stairs!
I suspect others know what you think, too, Ms Croft.
#####################
Perhaps those who are interested would like to see the criticism levelled at Taxpayers Alliance by Cllr Daniel Moylan, the Deputy Leader of Kensington and Chelsea Council and compare his view to that of most of the grass roots!!!
And draw their own conclusion
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My conclusion is that ruariJM and Cllr Daniel Moylan are two peas in a pod!
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#295
Regarding my post removed at 295.
I have received no email so once again you are in breach of your own house rules.
"If one of your messages is removed you will be sent an email explaining why. If you feel one of your messages has been removed unjustly, please reply to that email."
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you are denying me a right to reply and to appeal.
That is censorship.
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292#
Sparklet:
Ah, I hadnt seen that. That puts a different spin on it... Hmm. That previous post was me adding 2+2 together and getting 4.5...
Youre right, there are still questions to be answered.
Arent there always with this lot!!!
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Derek, what happened?
You not sticking around for the fun???
Or has the poor old Camel's knees finally given way???
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