Monday, April 02, 2007

Competition 3 - what did I say that was wrong ?

The Telly put up a new topic today on its "Your View". It asked the question: "How will Gordon Brown's pension raid affect you ? ".
Here was the preamble, which as you see asked supplementary questions that went further than indicated in the title, eg like whether Gordon Brown is suitable PM material.

"Gordon Brown was accused yesterday of overseeing the "failure" of the pensions system after ignoring officials' advice on a controversial tax reform.
Confidential memos - finally made public after a two-year battle - showed Treasury officials raised concerns that changing the way dividends were taxed would cost pension providers up to £4 billion a year and leave pensioners and low-paid workers worse off.
Mr Brown was also advised that the move would accelerate the closure of lucrative final salary pension schemes and cause share prices to dive by up to 20 per cent, according to the documents.
Shadow Chancellor George Osborne seized on the revelations, claiming: "It is time Gordon Brown faced the music for the damage he's done to British pensions."
What do you think? Should Gordon Brown face an independent inquiry into the impact of the tax reform on the pensions system, as the Tories suggest? How will Mr Brown’s pensions ‘raid’ affect you? Has his fiscal management caused you to doubt what kind of Prime Minister he would make?

Yours truly posted a comment that went up early in the first batch ( see below).

But I later in the day sent a second one, which did not appear. Grrr. A little reminder was sent, but still no success. Grrrrrrrrr.

Later, I responded to a point made by one "Michael", but that did not appear either.

So here's the Competition. Tell me what I said that stuck in the craw of those Telly moderators (who are usually so obliging !).

First reject: sent approx 15:30 London time

"Maybe Gordon Brown thinks he can ride this one out, or hide away in Afghanistan, hoping it will have all blown over by the time he gets home. Think again, Gordon Brown. There's a light at the end of the tunnel, certainly, but it's another express train bearing down on you at top speed.

It's our old friend from the 1960s called "Balance of payments crisis", like the one that forced Wilson to devalue the pound.

Here, verbatim, are the glad tidings that were in the Business section of That Other Sunday Newspaper:

"Britain"s current-account deficit rose to £43.4 billion last year, from £29.2billion in 2005. The deficit on trade in goods rose by £14.9 billion to £83.7 billion, due to a greater rise in imports than exports across all categories. (But this was only partly offset by) the services surplus, which rose by (a mere )£5.3 billion to £29.6 billion. The current account deficit was 3.4% of GDP last year, its highest since 1990, compared with 2.4% in 2005."

(The few extra words in brackets are my own).

Maybe we should forgive Tony Blair for staying long past his sell-by date: maybe he felt that his next door neighbour's chickens needed a little more time to come home to roost. Certainly these figures should put paid to any idea that Brown has managed all aspects of the economy.

What he has done is to massage the headline GDP growth figure, at the expense of pretty well everything else - pensions, house prices, red tape, bloated State sector and now - balance of payments.

The man should should tender his resignation forthwith. I would suggest calling in Frank Field as a caretaker Chancellor - a trustworthy and unifying figure, one who can start sorting out Brown's mess.

Second reject: sent approx 17:00 London time

"Michael says this is one of the biggest news stories of the year. How's that for British understatement ! One wonders if he has seen today's Times: here are the opening words in an article by Lord William Rees-Mogg, a former editor:

"In more than 220 years The Times has published many historic reports; few of them have been more significant than last Saturday’s exposure of the Civil Service briefings before Gordon Brown’s 1997 stealth tax on pension funds."

Answers to: please. All will be published, subject to them being within the bounds of good taste, as judged arbitrarily and subjectively by my team of minions at Blog Central.

First email (from Louise): What's the prize, Colin ?

Oops. One forgot about that small detail, Louise. Give us half an hour to ponder on that one. In the meantime, enjoy your meeting of the anti-hamster league ! And before you ask: not guilty.
OK, I've thought. The prize is ........ pause for effect ....... that pair of hippo socks that you so admired, Louise.

One small problem. How do we know you have the right answer, unless you are in a long term relationship with one of the Telly's moderators ? I can't see one of them posting here, can you ?

Update 22:00 French time: have just sent this as a "comment" to the Gordon Brown thread:

Dear Moderators
I have just this minute offered a valuable prize to the person who can come up with the best explanation for why my last two posts to this thread have been rejected. Competition details on my "Dreams and Daemons" blog:
It's all in good fun: that goes without saying, but I thought I'd better say it, all the same.

Update Tuesday: Well, you're apparently all as perplexed as I am as to why the Telly's suddenly blocking my comments. But I see that Louise is getting the same blue pencil treatment, simply for agreeing with comments made by the Telly's Trusty Trio. Having slept on it, here are two explanations. First one: they don't like my references to the T word. And no, that's not T for Telegraph. It's T for Toffee-nosed, or, more politely, and historically, Thunderer.

Second possibility: either they did not know about the scandalous, and under-reported balance of payments figures, and don't like us hoi polloi using "Your View" to point them out, or they did, and have a big story planned, and don't want someone stealing their thunder.

You see, David Smith in the Sunday Times makes scant reference to the figures, appalling though they are, saying no one gives a hoot about the balance of payments these days, that it's accepted that the UK always runs a chronic deficit, that its tolerable while there's great gobs of capital flowing into the country bla bla bla.

He makes it all sound like a psychological thing, akin to share prices. Well, it ain't - the exchange rates are governed by harder laws of supply and demand than that ,Mr.Smith, as I'm sure you know full well . If we go importing vastly more goods and services than we export, then sooner or later there will be a day of reckoning. At the moment, the pound is seen as relatively strong, because of the weakness of the dollar and the yen. But that could change, and then overnight the foreign exchange dealers wake up to what they have known and ignored for too long - that Britain has a tax-and-spend Chancellor who's been quietly spinning away for the best part of 10 years, putting a false gloss on things. The UK's system has allowed him to get away with that, though the Times's recent coup in getting the Freedom of Infomation Act finally to work in making the Treasury cough up the advice Brown was given on pensions may signal that his game is finally up. What else has this mega confidence trickster been keeping from us ? My advice, in a nutshell: : buy gold !

Oops, nearly forgot: this is the first of my three submissions to "Your View" that was accepted:

"I worked for a smallish organization for 12 years that ran into difficulties, and was subsequently "rescued" by a competitor. The final-salary pension scheme was closed to newcomers and then ring-fenced, so I thought all was well.

But after THAT budget one began to see signs that the scheme was not well. The new company had to go propping up it up with voluntary payments of tens of thousands of pounds a month in order to meet the Government's deadline for proof of future ability to meet liabilities. Brown's tax raid was cited by the Trustees as a major blow, though the fall in equities, increased longevity were other factors.

I had always assumed that my scheme was rock-solid, despite these difficulties, through knowing that when one reached retirement age, the fund purchased an annuity on one's behalf, to pay one's pension in perpetuity, and freeing one from the changing fortunes of one's employers. That is no longer the case. If my merged company went bust, then I am at the mercy of the safety-net schemes, and who knows how reliable they might be in the event of a major melt-down following, say, some international crisis ?

Brown's raid has undoubtedly contributed to the poor performance of other investment - the so-called tax-exempt payouts from "Friendly Societies" ( a misnomer if ever there was), of ISAs linked to the FTSE index, which have lagged some 30% behind those linked to a mix of European funds over a 6 year period since the dotcom crash.

And there's been a vicious circle between pensions and stockmarket values: pension funds, over-exposed to weak equities have tried to dump equities, to meet those Government tests of future viability, and in so doing have further depressed those same equity values; meaning more have to be dumped. Brown's raid was the equivalent of a ship being torpedoes, and holed below the water line. He got away with it, through exploiting his initial honeymoon period with the electorate, and with a non-too numerate media.

What appals me is the revelation that Gordon Brown set out to find his £5bn pot of political spending money even before winning the '97 election. He must have known that one cannot bleed that amount of cash from the nation's pension pot without there being long-term consequences, as clearly warned at the time. Yet he went ahead, and has caused untold anxiety and misery to millions who have seen a life time of prudent preparation for retirement essentially turned into a junk bond.

He should do the honorable thing and resign. There should be no possibility of him being considered for the premiership until we have seen how he performs in a different department of state, eg the Foreign Office or the Home Office. Personally, I do not consider him temperamentally suited to be PM: he never did inspire trust, and recent events have just shown the long term damage that can result from a individual exercising power in a system that lacks transparency and accountability."