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Ella-Henderson
'Leave pensioners alone!'

STATEMENT: George Osborne

IN HIS high-pitched voice, the Chancellor of the Exchequer, charmless George, delivered what felt more like a mini budget than an Autumn Statement last week.

It was more dismal than everyone other than this Government forecasted. Low growth, pay freezes and pay cuts add up to a grim few years to come.  

There were, of course, sweeteners, scattered like crumbs from a Battenberg cake – freeze on petrol prices, rail fares capped and the doubling of free nursery places for two-year-olds.

It felt like George Osborne gave with one gloved hand and took away with a closed fist. But as is the way of the Government, it was designed to help make the economic ‘medicine’ go down.

The most worrying part of the plans was his announcement that he had “negotiated" an agreement with two pension organisations, to “unlock" £20bn of pension funds savings to invest in private infrastructure, in a bid to “overhaul the physical infrastructure of our nation.” 

Now, I am no economist but one wonders whether the Chancellor has ever heard of that old scoundrel Robert Maxwell.  For those two young to remember, the late Robert Maxwell was a bear of a man who rose from poverty to media mogul, building a publishing empire which included Mirror Group Newspapers.

Maxwell was a powerful media mogul who no one would dare cross. That was until the late Eighties and early Nineties recession swamped the country.  The crud hit the fan and the financial condition of many companies became exposed.

Just after his death whilst cruising the Canary Islands in 1991, it was uncovered that Maxwell had since the late 80s used hundreds of millions of pounds from his companies' pension funds to shore up the shares of the Mirror Group, to save his companies from bankruptcy. It did not work and the companies filed for bankruptcy protection in 1992, but his son and heir was declared bankrupt with debts of £400 million.

Raiding

Speak to any financial advisor about raiding your pension fund in times of financial trouble and they will tell you it is a bad idea. Even David Kenmir, whilst chief operating officer at the Financial Services Authority, cautioned back in 2003 that releasing cash from a pension may sound very tempting, but you need to stop and think. It's rarely in anyone's long-term financial interest to do so. 

Week by week this Government loses credibility; it is like watching a Greek tragedy unfold. The main players seem inept and out of their league with not a decent plan between them.

Osborne is supposed to be in the business of saving Britain, but this latest idea makes him appear like a dodgy financial advisor. And I fear we, the public, will end up picking up the bill or washing dishes.

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