Oliver Duff

i Editor's Letter: The Budget 2014

 

Share

 

An unashamed offer to the Conservative heartlands and to floating voters unconvinced by Labour’s lean to the left. Seventy-five per cent of over-55s voted in the last election. The corresponding figure for 18-to-24-year-olds was 44 per cent, dropping to just 39 per cent of women that age. Yet that gulf doesn’t tell the full story behind George Osborne’s fifth budget yesterday.

The Chancellor had long been planning to make the 2014 a budget for saving. Pensioners of hugely varying incomes have seen their savings painfully eroded because of the Government’s policy to keep interest rates at rock bottom. Mr Osborne’s shocking decision to tear up the pensions rules, which wiped £3 billion off the market value of the UK’s top pensions firms in one afternoon, offers huge incentives to save, for those with the means.

Crucially, the reforms mean that millions of people have just had their pensions pots turned into bank accounts - a life-transforming change for anyone living hand-to-mouth who couldn’t draw down their cash because it was locked into a pension.

Mr Osborne’s motivations were threefold. Ideological: liberalising the market, empowering people to choose how they spend their pension pots by dispensing with the need for annuities, and by ending the punitive 55 per cent tax for withdrawing funds too quickly. Economic: he’s betting on a pensioner spending boom with all this unlocked cash - and it’s their money, spending fast-forwarded from the future. And especially political: he hopes this will be a “silver bullet” fired at Ukip, who are benefiting from defections by Conservative supporters aged over-60.

Of course, if pensioners go out and blow their pots, to hell with the consequences, then the state is going to be left with a whopping tab. The Treasury wagers that won’t be the case - and in Downing Street, the drumbeat of next May’s general election drowns out such niggles. Mr Osborne scores 7 out of 10 for drama, 8 out of 10 for politics.

But as for those in their 20s, 30s and 40s: all bets are off. Who knows which pension rules the next Chancellor will decide to change?

Ed Miliband, in replying to the Budget, was weak on detail - but correct in his narrative that for millions, this Budget will do nothing, their living standards still falling in the face of brutal inflation of housing, heating and food. Let no one say they all stand for the same thing.

i@independent.co.uk

Twitter.com: @olyduff

React Now

  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Sales Call Handler

£14500 per annum: Recruitment Genius: An opportunity has arisen for a Sales Ca...

Recruitment Genius: Support Worker

£14560 - £15000 per annum: Recruitment Genius: This company offers unique pers...

Recruitment Genius: Junior Web Designer - Client Liaison

£6 per hour: Recruitment Genius: This is an exciting opportunity to join a gro...

Recruitment Genius: Service Delivery Manager

Negotiable: Recruitment Genius: A Service Delivery Manager is required to join...

Day In a Page

Read Next
Zoe Sugg, aka Zoella, with her boyfriend, fellow vlogger Alfie Deyes  

What the advertising world can learn from Zoella's gang

Danny Rogers
Rachel Reeves is the shadow Work and Pensions Secretary  

What are we voting for? No one knows

Stefano Hatfield
No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor