Could the 1997 pensions raid come to haunt Gordon?

March 31st, 2007

    Times wins two year battle to force the Treasury to hand over papers

times pension.jpgWith Labour’s leadership changes only weeks away the main lead in the Times this morning has the potential to cause bother for Brown as his team try to orchestrate a succession without a real challenge.

For the “quality” paper that has become NuLab’s most loyal supporter has just won a Freedom of Information act fight to get details of the advice ahead of Gordon’s famous “pensions raid” only weeks after moving in to Number 11 in 1997.

This was a hugely controversial measure at the time and has been blamed for much of the major deterioration in pension provision over the past decade – an issue that the opposition parties could use to hurt Labour.

According to the paper “Experts claim that the move has deprived the country’s savers of at least £100 billion over the past decade, during which Britain’s private and occupational pension system has struggled to stay afloat. The changes affected the 11 million people in Britain with company pensions and the 7 million with personal pensions.”

What the Times has acquired under the act is the advice that Brown was given before moving forward. This shows that he went ahead in spite of being warned of some of the consequences. It also reinforces the “Brown acting like Stalin” comments from his former top civil servant, Lord Turnbull.

The fact that the Treasury fiercely resisted handing over material and had to be forced to do so does not help the government’s position.

    This could be dangerous because the one area of many people’s finances where they are worse off then a decade ago is in relation to their pensions.

One defined benefit scheme after another has been closed or the benefits diluted and, rightly or wrongly, much of the blame is heaped on what Gordon did in the weeks after coming into office.

The standard Labour defence on this has been to attack the Tories for the pension misselling scandals that occurred when they were in power. The trouble is that that is now a long time ago. Whatever this story will run.

Gordon’s “next Labour leader” betting price has eased a touch to 0.25/1.

Mike Smithson

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