Far From Satisfying
If The Jeremy Hunt was a restaurant I suspect all that was announced today is the appetisers from their pre-election menu.
Having prepared myself to gorge on a feast of tax giveaways, the rather mediocre fare served up was far from satisfying. The removal of class 2 National Insurance contributions for the self-employed was a nice little crudité for those that will benefit but let’s be honest the weekly saving barely covers the cost of the coffee at the end of the meal.
The reductions in NI rates to 10% for employees and 8% for self-employed was a bit more satisfying but as National Insurance is in effect the hidden tax reducing it doesn’t come with any great satisfaction and like a Chinese meal leaves you wanting more.
The good news for those of us living north of the border is, as NI is not devolved, we will also benefit from this reduction and we do not have to worry about the Scottish Government deciding that they would rather give us something else deep fried in batter.
There were some interesting looking dishes that I suspect will not prove palatable. The pension pot for life caught the eye but any chef that has tried to cook this up before has found the reality of expecting employers having to deal with multiple pension schemes was too difficult an ingredient to swallow.
I did find it ironic that the way this was announced made it seem as though everyone has a pension that could be amalgamated which is no doubt true in the private sector where final salary schemes have been ditched for years, and virtually everyone has a money purchase arrangement, yet every public sector worker still benefits from a defined benefit scheme.
Given another menu item was to reduce the cost of the civil service and (no sniggering!) make it 0.5% more efficient each year, wouldn’t announcing plans to finally abolish defined benefit pensions for these employees go some way towards this? The fact we have more civil servants employed just now than we ever have means providing pensions for them all is a ticking time bomb, but it looks as though no government has the Rocky Mountain Oysters (look it up) to deal with this.
Pensioners are obviously an important customer at The Jeremy Hunt as they were encouraged to keep their patronage by getting a pension increase nearly twice the rate of inflation. A two for the price of one pensioner’s special if you will. Whether this will be sufficient to avoid them moving to The Rachel Reeves down the road time will tell.
So when will we get to the main courses? Well although it is not officially a Budget the Spring Statement in March is when I expect to see the real pre-budget specials. This will be the last time the current proprietors of The Jeremy Hunt will be able to put out a menu before they find out if they will be back to run it for a further five years and I suspect they will want to put on some dishes that will have their customers wanting more.
We got a taste of it this year when the abolition of the Pension Lifetime Allowance was served to diners in March. This proved extremely popular with the limited amount of people that were able to order it. One can only imagine the impact, say a reduction in IHT would have, given this would appeal to so many more customers.
No doubt taste tests will be ongoing in the kitchen between now and then but, for me, today was no more than an amuse bouche and I look forward to a much more satisfying meal in March.