Hiking taxes of the old to subsidise young is madness
HOW Philip Hammond must now regret the quip he made back in March about the spring Budget being his last – before announcing that henceforth the Budget would be moved to the autumn. With the vultures circling he knows full well that he needs to put on a pretty impressive performance on November 22 if he is to avoid going down as one of the shortest-serving chancellors of modern times.
But if he does want to preserve his job I suggest he quickly forgets one of the measures he is reported to be considering – jacking up tax rates for older workers and pensioners in order to fund a tax cut for the young.
Yes, there are ways in which the young now get a raw deal compared with their parents. The horrendously over-inflated property market has made it extremely difficult for them to get on the housing ladder. On top of that, those who go to university are having to take out loans to fund an education which was free to their parents – and worse, they are being charged a usurious rate of interest of more than 6 per cent.
Both these issues need to be resolved if the Conservatives are to attract the votes of the under 30s. But there is no justification for a tax raid on older people in order to fund lower tax rates for the young. The idea that Britain has become riven with “intergenerational unfairness” ignores the plight of pensioners who have lost out from interest rates which have been held at artificially low levels for nearly a decade.
WEALTHY pensioners may have done well as the value of homes and other assets have soared. But not every pensioner owns their own home or has a portfolio in the stock market. For many, the story of the past few years has been of trying to live off savings accounts which are paying a pittance in interest or of finding that their retirement plans have been ruined by a collapse in annuity rates.
Like most public sector workers, Hammond doesn’t have to worry about annuity rates – which determine the annual pension payments of millions of Britons who are not in final salary schemes. Thankfully, reforms carried out by George