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

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

Recruitment Genius: Digital Account Manager - OTE £40,000

£25000 - £40000 per annum: Recruitment Genius: This web-based lead generation ...

Tradewind Recruitment: Intervention Teacher Required To Start ASAP.

£125 - £150 per day + Negotiable: Tradewind Recruitment: A 'wonderful primary ...

Tradewind Recruitment: Maths Teacher

£90 - £140 per day: Tradewind Recruitment: Our client is an 11-16 mixed commun...

Recruitment Genius: PHP / Drupal / SaaS Developer

£32000 - £36000 per annum: Recruitment Genius: A rapidly developing company in...

Day In a Page

Read Next
Benedict Cumberbatch attends a special screening of his latest film The Imitation Game  

Benedict Cumberbatch race row: What's the actual difference between 'coloured' and 'person of colour'?

Matthew Norman
Pressure is growing on Chris Grayling to abandon the Government bid to advise Saudi Arabia on running its prisons (Getty)  

What in sanity’s name is Chris Grayling doing in the job of Justice Secretary?

Matthew Norman
Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness
Homeless Veterans appeal: Homeless in Wales can find inspiration from Daniel’s story

Homeless Veterans appeal

Homeless in Wales can find inspiration from Daniel’s story
Front National family feud? Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks

Front National family feud?

Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks
Pot of gold: tasting the world’s most expensive tea

Pot of gold

Tasting the world’s most expensive tea
10 best wildlife-watching experiences: From hen harriers to porpoises

From hen harriers to porpoises: 10 best wildlife-watching experiences

While many of Britain's birds have flown south for the winter, it's still a great time to get outside for a spot of twitching
Nick Easter: 'I don’t want just to hold tackle bags, I want to be out there'

'I don’t want just to hold tackle bags, I want to be out there'

Nick Easter targeting World Cup place after England recall
DSK, Dodo the Pimp, and the Carlton Hotel

The inside track on France's trial of the year

Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
As provocative now as they ever were

Sarah Kane season

Why her plays are as provocative now as when they were written
Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

Murder of Japanese hostage has grim echoes of another killing

Japanese mood was against what was seen as irresponsible trips to a vicious war zone
Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore