Iain Duncan Smith Resigns

[Vicki Vixen]

I did answer it, albeit indirectly by highlighting its complete irrelevance to the situation we are talking about.

Rob however, has identified an interesting area on this and the student loan change is something I feel should have been challenged harder by the appropiate circles so that any change didn't have retrospective effects. I can only assume the fact you commented "exactly" to this suggests you think this move was massively unfair... yet you were suggesting at the start of all this that it would be ok to do something similar in respect of pensions savings.

My point has been and will remain because it is only just, if the government has set out terms in relation to something it wishes the public to take up (such as investing in a pension, making savings into an ISA or similar, providing a student loan OR providing assistance with purchasing a property), they may change the terms, but those terms shouldn't adversely effect those that have already taken up the opportunity based on the previous terms and that some transitional arrangements must be contained to protect those people.

I ask you - how can you reasonably object to that!?!

Government retrospectively penalises students and the disabled, yet protects rich pensioners with £1million plus pension funds from tax, and you ask how I can reasonably object?

[Jon the Hat]

Government retrospectively penalises students and the disabled, yet protects rich pensioners with £1million plus pension funds from tax, and you ask how I can reasonably object?

 

This is the crux of the issue, and I think mainly why IDS resigned.  This has become a bugbear, and add to that the same budget committing him to deliver further cuts while increasing the 40% Tax band was enough.  I have to say I rather agree, and I am glad to see these cuts have been ditched.  I don't want a tax cut at the expense of disabled benefits, that wasn't the compassionate conservatism I voted for.

[DJ Barry Hammond]

Government retrospectively penalises students and the disabled, yet protects rich pensioners with £1million plus pension funds from tax, and you ask how I can reasonably object?

Are you diliberately misreading my points... Anyway let's go back to your initial point shall we, that was this;

The main injustice though, which is rarely reported, is that rich pensioners were protected from caps on pension wealth that apply to the rest of the population. Today working age people are allowed to accumulate 1.25m in pension, which will soon be reduced to 1m. Any pension accrued above this is taxed at 55%. This works out at a max pension of around 25k per year before the tax charge kicks in. For some reason, the government has protected older people from this tax charge. A guy I know who is a financial advisor tells me over half his clients have this tax protection, one of whom has an annual (tax protected) pension income of 450k per year.

What the government has done is reduce the amount of LTA over the last few years... However, given it was as high as £1.7 million in previous years and one might have expected the LTA to increase, I'm pointing out that it's only fair to offer transitional protection to those pensioners that did save in accordance with the government policy of the day when they started.

You are saying this is in fact unfair and that you'd prefer that these people should be penalised for managing their pension savings within the rules at that time - how could they predict the government would so dramatically reduce the LTA to the level it is now?

Yes, it may be fortunate for these people to have such large pension pots, but the fact they have money shouldn't disguise the fact that it would actually be an injustice if these people were subsequently penalised for playing by the rules.

The other important thing to mention again is the highly misleading comment about the £450,000 tax protected income - that income would be taxed at the higher rate, unless it was tax free cash - but even then, once it comes out of the pension arrangement it's then eligible in the persons estate for IHT purposes and would no doubt end up earning the person an income of some sort, thus being further eligible to tax than it would be within the pension arrangement.

Furthermore, IF this is an annual income the pension pot they hold must be so huge they will be forever paying a 55% tax charge on the amount of pension they take over the LTA, so i cannot see how it would be possible to take a pension of that amount each year without paying a lot of tax on it. In effect, if that is the case - that persons had some very poor financial advice or has more money than sense?

If you read my posts, I've been consistent in arguing the basic simple point - if you offer terms and someone takes you up on those, you should honour those terms.

[DJ Barry Hammond]

http://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/the-limetime-allowance

This may be of help too

[Vicki Vixen]

Are you diliberately misreading my points... Anyway let's go back to your initial point shall we, that was this;The main injustice though, which is rarely reported, is that rich pensioners were protected from caps on pension wealth that apply to the rest of the population. Today working age people are allowed to accumulate 1.25m in pension, which will soon be reduced to 1m. Any pension accrued above this is taxed at 55%. This works out at a max pension of around 25k per year before the tax charge kicks in. For some reason, the government has protected older people from this tax charge. A guy I know who is a financial advisor tells me over half his clients have this tax protection, one of whom has an annual (tax protected) pension income of 450k per year.

What the government has done is reduce the amount of LTA over the last few years... However, given it was as high as £1.7 million in previous years and one might have expected the LTA to increase, I'm pointing out that it's only fair to offer transitional protection to those pensioners that did save in accordance with the government policy of the day when they started.

You are saying this is in fact unfair and that you'd prefer that these people should be penalised for managing their pension savings within the rules at that time - how could they predict the government would so dramatically reduce the LTA to the level it is now? Yes, it may be fortunate for these people to have such large pension pots, but the fact they have money shouldn't disguise the fact that it would actually be an injustice if these people were subsequently penalised for playing by the rules.

The other important thing to mention again is the highly misleading comment about the £450,000 tax protected income - that income would be taxed at the higher rate, unless it was tax free cash - but even then, once it comes out of the pension arrangement it's then eligible in the persons estate for IHT purposes and would no doubt end up earning the person an income of some sort, thus being further eligible to tax than it would be within the pension arrangement.

Furthermore, IF this is an annual income the pension pot they hold must be so huge they will be forever paying a 55% tax charge on the amount of pension they take over the LTA, so i cannot see how it would be possible to take a pension of that amount each year without paying a lot of tax on it. In effect, if that is the case - that persons had some very poor financial advice or has more money than sense?

If you read my posts, I've been consistent in arguing the basic simple point - if you offer terms and someone takes you up on those, you should honour those terms.

I'm not misreading your posts, I just fundamentally disagree with you.

You have also made a number of errors in your posts, the latest of which 1. Pensions are NOT part of the estate on death, they fall outside the individual's estate, 2. The 450k p.a. pension I cited is not subject to 55% tax because there was the option to take enhanced protection in 2006 which exempted the pension from any tax charges regardless of how obscenely huge it is.

You also made a number of other errors to try to prove your point, and dished out several personal insults in the process. I suggest you get your facts straight and also tone down the personal stuff if you want to continue this debate.

[DJ Barry Hammond]

I'm not misreading your posts, I just fundamentally disagree with you.

You have also made a number of errors in your posts, the latest of which 1. Pensions are NOT part of the estate on death, they fall outside the individual's estate,

2. The 450k p.a. pension I cited is not subject to 55% tax because there was the option to take enhanced protection in 2006 which exempted the pension from any tax charges regardless of how obscenely huge it is.

You also made a number of other errors to try to prove your point, and dished out several personal insults in the process. I suggest you get your facts straight and also tone down the personal stuff if you want to continue this debate.

If you re-read my post, you will note my comment about IHT related to benefits taken out of a pension arrangement, therefore then falling into that persons personal affairs, thus being eligible for IHT so that's point 1 - and clearly identifies you're reading what you want to see.

And ok, if the case in question had enhanced protection the LTA wouldn't apply - but, the income received would still be taxed at a higher rate so it's not as if this fund isn't being touched.

And yet, you still don't see the fundlemental point I'm making and use this extreme example as an excuse to justify an unfair overall position. As I've repeated over and over, it would be unjust to not offer transitional rules for those that have played by the rules as had been advertised.

[Vicki Vixen]

If you re-read my post, you will note my comment about IHT related to benefits taken out of a pension arrangement, therefore then falling into that persons personal affairs, thus being eligible for IHT so that's point 1 - and clearly identifies you're reading what you want to see.

And ok, if the case in question had enhanced protection the LTA wouldn't apply - but, the income received would still be taxed at a higher rate so it's not as if this fund isn't being touched.

And yet, you still don't see the fundlemental point I'm making and use this extreme example as an excuse to justify an unfair overall position. As I've repeated over and over, it would be unjust to not offer transitional rules for those that have played by the rules as had been advertised.

As I said before, I see your point, and I disagree with it.

[RobHawk]

I believe Martin Lewis was on about taking the government to court (judicial review) over this - so it may be that this policy is changed, at least to the point that it would only be implemented moving forward and not retrospectively.

It does go to show however, how much of a shit Osborne is... if you didn't know that already.

Without going into too much detail, I'm in regular contact with the MSE team and the judicial review isn't going to happen, as it's been made clear they won't win. The government really can do what they like it would seem.

[DJ Barry Hammond]

As I said before, I see your point, and I disagree with it.

I'm not having that as an excuse, because you've called the position 'unjust' when in fact, the position is actually as fair as it could be... you just don't like it because it provides a wealthy person an advantage.

Yet, you recognise the student loans position discussed is unfair, not right - yet that's exactly what you want to do to these rich pensioners here... your view is conflicted by the status of the person it effects and that's not right.

That is why I've consistently challenged you... I don't mind someone holding a coherent view, but yours doesn't do that, you fail to comprehend the key fundlemental reasons why these people are afforded protection and are not included in the revised rules - and that to change that position would actually be the unjust position.

[Rincewind]

He has now voted in favour of  the budget.

[Guest MattP]

Has anyone's stock ever divebombed in just a couple of months has Gideons has?

It's been unbelievable, he gone from being a lock for next leader to having no chance at all.

[The Doctor]

Interesting Corbyn has been nowhere to be seen on this - opponents civil war over Europe spilling over to the point where it's front bench is tearing itself apart, surely anyone planning to win an election needs to be putting the boot in and really putting the doubt in the mind of the public?

[Guest MattP]

I think Corbyn wants to keep a low profile until the EU ref is over.

Either that or people don't really care what he's saying anyway, half his backbenchers don't seem to bother to turn up for PMQ'S these days.

[Tuna]

Ever since Iain Duncan Smith entered mainstream politics I was desperately hoping a tabloid story would emerge about an IDS booze binge, with the immortal headline:

 

Iain Drunken Smith.

 

Thankyou, I'm here all week.

[Rincewind]

Ever since Iain Duncan Smith entered mainstream politics I was desperately hoping a tabloid story would emerge about an IDS booze binge, with the immortal headline:

 

Iain Drunken Smith.

 

Thankyou, I'm here all week.

Well his CV is a little dodgy. Says he got a degree at an University in Italy when in fact it was a certificate at a polytechnic. (Allegedly)

But maybe you don't need qualifications to be a member of the governments' cabinet...

[Nick]

Could it be a sideways move for Crabb?

Inbeforealf#

kill me now.

[Jon the Hat]

Well his CV is a little dodgy. Says he got a degree at an University in Italy when in fact it was a certificate at a polytechnic. (Allegedly)

But maybe you don't need qualifications to be a member of the governments' cabinet...

 

Is that better or worse than being Eton / Oxbridge educated?  The mixed messages confuse me.

[Alf Bentley]

Is that better or worse than being Eton / Oxbridge educated?  The mixed messages confuse me.

 

 

I think the point was that he had been "economical with the truth" on his CV.

 

It's an old story, dating back to when he was Tory leader and BBC Newsnight questioned the accuracy of his CV. He claimed that he had attended a prestigious Italian university and an impressive-sounding management school.

It turns out that he had actually attended a language school in Perugia (but not achieved any qualification) and the "management school" belonged to his employer and he had just attended a few work-related courses there.

http://www.bbc.co.uk/pressoffice/pressreleases/stories/2002/12_december/19/newsnight_ids_cv.shtml

[Alf Bentley]

Ever since Iain Duncan Smith entered mainstream politics I was desperately hoping a tabloid story would emerge about an IDS booze binge, with the immortal headline:

 

Iain Drunken Smith.

 

Thankyou, I'm here all week.

 

 

I'm sure there's the potential for a photo-story special:

- Photo 1: Iain Duncan Smith exudes power and sophistication as he swishes into No. 10 carrying a briefcase full of welfare cuts

- Photo 2: Iain Drunken Smith looks somewhat disheveled staggering into a nightclub after an evening of champagne toasts to tax cuts for top earners

- Photo 3: Iain Drunken Smitten sprawls across the nightclub bar, staring with glazed eyes at the barmaid in the low-cut dress and fishnets

- Photo 4: Yawn Duncan Smith: the "quiet man" is quiet again as he sprawls, snoring in a dark corner, shirt undone, flies undone 

 

....Suddenly he wakes with that horrible feeling that he's done something terribly embarrassing while he was "in his cups".... 

"Oh, No! I didn't really condemn welfare cuts for the disabled after years imposing the bedroom tax when the disabled had no smaller accommodation to move to....did I?!"

"I didn't really challenge the government's 'all in it together' stance just because they cut tax for those on £50k, while cutting benefits, did I? Not when I'd gone along with them cutting tax for those on £150k+ during austerity cuts in 2012, surely?"

"What have I done?! I must have been completely and utterly pissed!"

 

 

So, what's this resignation really all about? Ensuring there's a Thatcherite/populist successor, post-Cameron/referendum (Johnson and not Osborne, presumably)? Avoiding the blame for the impending Universal Credit fiasco? Getting free rein to express his full passions against the EU during the impending referendum campaign/Tory civil war?

[Rincewind]

I think he is fed up with being the one to get all the blame for the cuts so now saying it was not his idea. 

'I was only following orders'

It may be too late to claim compassion and empathy now. There were many people groups and charities saying the changes had gone too far.but he either ignored them or dismissed them saying that people were grateful that  he was reducing their income.

However that is not to say the Euro refrehemdon is not also part of the reason and thinks 'compassion' sounds  better as well as sticking a knife in the back of Osborne.

[Sharpe's Fox]

the threads dead but I thought I'd share this funny paragraph in a Frankie Boyle article in The Guardian:

I’ll admit that I watched Iain Duncan Smith on Andrew Marr after he resigned, and for the briefest moment, thought I could see a certain passion, albeit misguided. I suppose I had a glimpse of how he and his supporters see him – as an almost heroic figure. But if a serial killer sees himself as being sent to rid the streets of prostitutes, we don’t sit there and say: “Ah, yes, I suppose he is a cleansing flame wielded by The Almighty, if you look at it from his point of view.”