A Genuine Letter Received at No 10 Downing Street which remains unanswered!!! The letter was acknowledged but no answer. After I saw my own Labour MP (now gone) I did get some kind of weak response from the treasury.
4th February 2010
The Prime Minister
No 10 Downing Street
London
Dear Sir
Private Pensions – Loss of some 150 Billion due to your stealth tax from ordinary working people.
The Previous Government to yours had a campaign of incentives for ordinary working people so that they could provide for an additional personal pension so that they would help to fund their own retirement and at the same time reduce the burden on the National Insurance pension scheme.
Many working people took up these options and it was generally regarded as I understand it by all political parties that it was a prudent idea for people to try and make provision to provide additional pension income at retirement.
When this was introduced the Pension providers were able to reclaim the Tax that was paid on the dividend income that they received.
That of course, had many advantages for Pension Schemes and the Economy generally.
Pension Schemes had for many years invested in the UK Stock Market which over a long term view had proved to be a good place for pension schemes to invest.
The additional income tax that was recovered provided additional income streams that also allowed pension schemes to invest further into the stock market.
When your government came to power and indeed in your first budget in 1997 when you were Chancellor of the Exchequer you did away with ACT (Advanced Corporation Tax) and in so doing you reduced the income that Pension Schemes were receiving at the same time you made the stock market a much less attractive place for pension funds to invest in.
By so doing you created a scenario for a financial melt down in the UK Pension Industry and brought on a Stock market decline.
Many life and Pension companies were brought to their knees and undoubtedly you as the Chancellor of the Exchequer are directly responsible for this.
You meddled in business affairs of which you had very little knowledge.
You took a careless and risky decision and it has backfired in your face.
I quote some extracts from Liam Halligan, Economics Editor of the Daily Telegraph and the full text is at http://www.telegraph.co.uk/news/uknews/1531448/Browns-raid-on-pensions-costs-Britain-100-billion.html
Gordon Brown's notorious "pension stealth tax" has reduced the value of retirement funds by at least £100 billion, independent research has disclosed.
This is more than twice as much as the combined pension deficits of the country's 350 biggest companies.
The total current and future impact of Mr Brown's move — known technically as the abolition of Advanced Corporation Tax (ACT) relief — has been calculated by Terry Arthur, a fellow of the Institute of Actuaries, in a paper written for the professional body. Mr Arthur said: "What happened in 1997 represented an enormous and ongoing raid on the assets of UK company pension schemes. My research shows it would be very hard to justify an impact of less than £100 billion — and even £150 billion may still be a conservative estimate."
Derek Scott, who was Mr Blair's senior economic adviser for six years, said that the Prime Minister disagreed with Mr Brown's decision to remove relief, but the Chancellor "pushed it through" anyway.
“He either doesn't understand private pensions or he doesn't care about them, which is hardly prudent."
A Treasury spokesman said: "This methodology totally fails to recognise that, by establishing a stable macro-economic framework and cutting corporation tax alongside reforms to remove the distortionary impact of dividend tax credit, the Government created better conditions for investment and growth and hence greater investment opportunities for pension funds."
Of course the Treasury spokesman failed to understand that -:
The action taken by you destabilized the existing macro-economic framework.
Pension funds need income and cash flow and mere speculative growth is not a safe or PRUDENT policy. Your actions show that you adopted a policy of boom or bust for pensions the complete opposite of what you and your party had promised
Your policy was distorted in that it attacked pension funds that were investing to the Stock market and this would include all pension providers :-
Standard Life
Scottish Mutual
National Provident Mutual
Equitable Life
Prudentual
BUT EXCLUDED self administered pension finds that received their income either from mortgage loans as gross interest or from rental from commercial property. There were then and are now self administered pension schemes that invest solely in these assets. So you failed to create a LEVEL playing field.
It is clear that you failed to properly research or consider this properly if at all.
I think it is fair to say that through your actions EVERY person who had a pension that was invested in the Stock Market have had their final pensions reduced very considerably and I believe that it is also fair to say that your actions have taken more money from peoples pension Schemes than Robert Maxwell ever did.
The main point which I am sure will haunt you for the rest of your life is that you hurt the ORDINARY WORKING MAN as many had taken up monthly personal pension plans which were available at quite modest monthly sums.
You hurt the mass of ordinary working people in this country as Government officials – Civil servants – Police etc were not affected in any way by your short sighted policy as their pensions are funded in a completely different and better way.
I look forward to hearing your detailed explanation of such gross financial miss management.
Yours faithfully
