Sir, Your leader (“Golden Opportunity”, Mar 3) is right that changes to pension tax relief must be about making sure long-term saving is encouraged. But in reality this goal is likely to be well down the chancellor’s list. His first priority will be to fill the hole in the nation’s finances. Having promised not to raise direct tax or VAT, pension tax relief may be the only “big ticket” source of revenue available to him.
His other priority will be the politics of the decision — the impact on the EU referendum and the impact on the race to be the next party leader. If he gets this decision wrong it could be a “Gordon Brown” moment where another chancellor sees pension funds as a cash cow rather than a vital part of the nation’s infrastructure. The chancellor has a choice — he can raise billions to fund the deficit or he can revitalise our savings culture, but he cannot do both. Posterity will judge him harshly if short-termism wins out over the long-term interests of the nation.
Steve Webb
Director of policy, Royal London, and pensions minister 2010-15
Sir, The chancellor is reported to favour a “pension ISA” as the solution to the Treasury’s review of pension taxation. The idea involves scrapping some or all of the current up-front pension tax breaks and replacing them with tax-free withdrawals. This would be a mistake. It would mean asking pension investors to trust the politicians’ promise of jam tomorrow; retirement savings rates would drop because investors have learnt not to trust such promises. It would become more attractive to take money out of a pension and less attractive to pay money in. The fiscal burden of the pension system would be shifted from today’s taxpayers onto those of tomorrow, thereby further exacerbating intergenerational inequalities. It would also have to apply only to future investments, creating a complex and expensive two-tier pension system.
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There are various possible solutions to this pension tax review, but a pension ISA is not the answer.
Tom McPhail
Head of retirement policy,
Hargreaves Lansdown
Sir, The mooted introduction of a flat rate of tax relief on pension contributions is being urged on the basis that it would contribute to social fairness. It does anything but. What is fair about some people being able to save for their pension out of their untaxed income while others are henceforth not allowed to? Under our misleadingly named “progressive” income tax system all those who pay higher rates of tax — mainly middle-class households on relatively modest salaries — already pay a disproportionately large share of the nation’s tax bill. Surely then they have at least as much right to full tax relief on their pension contributions as anyone else. Why should they now have to cross-subsidise lower-income pension savers?
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Nigel Henson
Farningham, Kent
Sir, Yet again there appears to be a campaign to prepare the public for pension reform in the budget. I accept that it is quite likely that people do not save nearly enough to provide a decent private pension. Advising people that they need to save 15 per cent of their salary, when they are struggling to save a deposit for a house, is simply not credible.
What I find difficult is that even if you are prudent enough to save for a pension, if there is no growth within your chosen fund there is seemingly no sanction on the fund manager and fees are still taken from a diminished pension pot. It could, in theory, even dwindle to nothing. This cannot be right or fair. Surely it is time that fund managers became responsible for failure and if funds show a loss, fees should be removed.
Adrian Burt
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Sherfield on Loddon, Hants
NEW CALAIS JUNGLE
Sir, The French economy minister Emmanuel Macron, who has joined David Cameron in claiming that Brexit could lead to diminished border controls at Calais, should take note of the adage, “Be careful what you wish for” (thetimes.co.uk, Mar 3).
In the event of the current arrangement coming to an end, word would soon spread that Calais had become an “open door” to the UK, leading to tens of thousands of economic migrants converging on the town. Consequently the “Jungle” being dismantled in Calais would soon rise anew, only ten times larger.
K Houston
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Edinburgh
Sir, My wife and I, being in our late seventies, are very aware that the outcome of the EU referendum will affect the future of our four grandchildren, aged between 12 and 17, more than it will us. We therefore propose to consult them and will vote in accordance with their wishes, having confidence in their ability to give it every consideration. They will also, in due course, recall that they have been involved in this historical decision — even if in a small way. If other “silver” voters adopted this policy, those promoting their respective causes might wish to address their message to younger as well as older voters.
Peter and June Light
Trull, Somerset
Sir, With the legislation for the EU referendum in mind, may I suggest that there be provision for three boxes on the voting form, one “stay”, one “leave” and one “very reluctantly stay”? The third box will enable us to express our true views to the European dreamers in the very British way of “complain and carry on”.
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Timothy Young, QC
London WC2
VAPING REGULATION
Sir, The tobacco companies must be delighted by the demise last week of the UK charity Quit, which has been helping smokers to stop since 1926. Sir Richard Doll (obituary, July 25, 2005), who demonstrated the link between tobacco cigarette smoking and lung cancer and strongly supported Quit, must be turning in his grave. The tobacco companies must be even more delighted by the possibility of electronic cigarettes (probably safe) becoming as expensive as tobacco cigarettes (definitely dangerous). A high tax on e-cigarettes represents the ultimate Brussels insanity.
Anthony Kenney, FRCS, FRCOG
Brighton
Sir, Professor Robert West (letter, Mar 3) is right. Although high, tobacco taxation is not high enough. About 40 years ago it became fashionable for chancellors to justify tobacco duty increases on health grounds. Yet in most years since it has been increased at a level pitched at maintaining revenues in real terms. The effect on smokers vanishes within days. There is abundant evidence from the UK and elsewhere that tax would have to be increased by 30-50 per cent to have a lasting effect on smokers.
As for taxing e-cigarettes at the same level as tobacco, Action on Smoking and Health is right. If the principal effect of vaping is to reduce tobacco consumption, the tax system should favour it, not deter it.
Dr C R Pickering
Author, Death and Taxes: How the Government Shortened the Lives of Smokers, London W4
Sir, Further to your story “Brussels tax hike to send e-cigarette price soaring” (Mar 2), all that has happened is that a review of the existing rules for excise duty on tobacco and tobacco products has been launched. EU member states, including the UK, have asked the European Commission to evaluate the current rules; that is what the commission will now do. It is far too early to predict the conclusions of this review, if any, but the commission will listen carefully to EU governments and fully consider their requests and views. Any proposal would need the unanimous support of all 28 EU governments for it to be approved.
Stephen Quest
Director-general for taxation and customs union, European Commission
Sir, Not only is vaping safer than smoking but it will add to keeping the pavements of our cities free from the scourge of cigarette butts.
Roger Mew
Edinburgh
FAILED WELFARE STATE
Sir, Jenni Russell is to be commended for supporting Dr Adam Perkins, a lecturer in the neurobiology of personality at King’s College London, on his findings on the welfare state (“Let’s think the unthinkable on the welfare trap”, Opinion, Mar 3).
Dr Perkins is, of course, perfectly correct in his findings. I saw many examples of this throughout my career in the law, sadly none more so than in the family courts. It is time society admitted this abuse of what was designed as a safety net and not a right not to work.
John Stewart
Colchester, Essex
LOST IN THE TACKLE
Sir, I fear that it is Jeff Probyn (Thunderer, Mar 2) who is “missing the point” with regard to the dangers of tackling in rugby in schools. He states that at 16 he was playing rugby against 30-year-olds. That is fine if he was physically developed to match the older players. The trouble with school sport is that children play rugby in their age groups irrespective of their size and physical development. This disparity can be huge. Much to my son’s dismay I made him give up rugby. I did so after seeing a picture of him with three schoolfriends in the same year group. One was similar in stature to him and two were twice his size — he barely reached their shoulders. An accident was inevitable, the only question was how seriously.
Emma Raffan
Westcliff-on-Sea, Essex
Sir, Since the professionalisation of the game in the 1990s, schools have encouraged players and coaches to put far too much emphasis on youngsters’ physical development. Specialist coaches have encouraged players to adopt professional attitudes, thereby helping to mask the real essence of rugby — teamwork, speed, skill and above all enjoyment and respect for the opposition.
Professional coaches should work in rugby clubs, leaving schools to employ teachers.
Andrew Widdowson
Felsted, Essex
Sir, The debate over school rugby, and concerns in the professional game about injuries arising from the tackle, have neglected the main problem. The ball carrier should aim to avoid being tackled in the first place, by passing it to team-mates. Were ball-handling skills, rather than “possession”, treated at all levels as primary, there would be fewer collisions, fewer injuries, a more exciting spectacle, and the northern hemisphere sides might at last claw back some parity with the All Blacks.
Lindsay G H Hall
Theale, Berks
AMERICAN ENGLISH
Sir, Just because those outside this country choose to attack the English language by inventing ugly noun-verbs such as “weaponising” does not mean that we have to go along with it (cover story, Mar 3). What on earth does General Philip Breedlove mean by the words “deliberately weaponising migration”? Perhaps he could be invited to put it into recognisable English, so that we might understand him.
Keith Davies
Great Missenden, Bucks
WAR ON TWO FRONTS
Sir, Never mind medals made in France (“French fury over U-turn on medals”, Mar 3). I’ve just washed the trousers of my son’s RAF uniform — and found they are made in China.
Helen Morris
Nantwich, Cheshire
BIRDS OF A FEATHER
Sir, Having read the piece by Richard Williams (Mar 2) welcoming the decision to employ women soldiers in combat roles as a timely innovation for the British Army, I turned the page to find the excerpt from The Times of the same date in 1916 headed “Birds at the Front”.
S Beck
Edinburgh