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Monday, 6 October 2014

If Only Boris Was Right!

Trust Boris to pick up a sensible idea and run with it! He is about the best publicist in the country, but his image as a Bullingdon Buffoon mitigates his effectiveness very significantly. Hence his piece in today's Daily Telegraph may have less of a positive impact that it should. One advantage of his publishing it today is that it provides a sensible alternative to the wishful fancies of the Libdems in Glasgow.

The idea is that which the late Barbara Castle believed had been implemented by the 1945 Labour Government; and thereafter betrayed by governments of all parties. This was the idea that National Insurance pensions contributions would be accrued by the government in a massive fund that could be used to finance the development of the economy: and the profits of that investment would amply fund the pensions to which the insureds became eligible in old age. As I mentioned last week, the National Health Service was so well-used from day one that that the fund was quickly exhausted and had to be topped up from general taxation to keep healthcare solvent; pensions continued to be paid out of taxes. In old age, Barbara continued to lament this despoliation; and to argue that the British people had been robbed.

Boris's idea of the day is that pension contributions, at least those of the higher-paid who do not fall within the new state scheme, could go into a Grand National Consolidated Investment Fund [not his terminology] that would develop the infrastructure that has been listed by Gideon Osborne but not significantly addressed, which would produce returns from which future pensions could be paid. Good idea!

 But politicians cannot be trusted any more now that in the nineteen-fifties, sixties, seventies, eighties or nineties: most people would say that present crop are even less trustworthy that the likes of Sunny Jim Callaghan, Enoch Powell and Grocer Heath [all of whom had very creditable service records in World War II]. What chance would there be of the Fund being allowed to fructify under proper management? Who would be the managers? Assuming that the Treasury would have a final say on the job-specs, the people-specs and the individual 'suitability' assessment of nominees, what chance is there of effective and independent Trustees being appointed? And, above all, what chance would there be of the Fund not being raided by a hard-up government?

I suggested in a recent blog that people should be issued with free bonds in lieu of the tax cuts that the country certainly can not afford at this time, allowing that money to be directed by the government into productive investments. Those investments could yield profits that could enable pay-outs to be made to the bondholders; following the principle of post-war credits that were issued during World War II [but not properly honoured, later]. But, of course, the Curse of Castle could apply to such a Fund - just as I suggest above would occur with Boris's Grand National Consolidated Investment Fund.

 There must be a way of appointing managers who would be competent, honest and genuinely independent of government: I must put my best thinking-cap on!

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