I hope that George Osborne will finally introduce some policies to help savers

Autumn Statement wishlist.

I hope that George Osborne will finally introduce some policies to help savers.  It is vital that the Government stops punishing those who want to take responsibility for themselves and their future, rather than spending everything immediately and then falling back on benefits.  Savers have had such a rough deal in recent years.  It is understandable that some emergency economic help had to be introduced, but enough's enough.  Savers need some help now, in order to ensure that future generations are not put off taking responsibility for their own financial future.

Whether it's young people saving for a house deposit, or older generations trying to prepare for retirement, savings have been damaged by recent policies.  Ultra low interest rates have decimated savings income, high inflation has reduced savers' capital spending power and the policy of Quantitative Easing which has bought huge swathes of the government bond market, has resulted in much lower pensions all round.

There are some major policies that I would love to see in this Autumn Statement.

1.  Help all savers by relaxing the restrictions on ISAs (tax free Individual Savings Accounts) so the savers can choose to use their full annual limit either to save in cash or in stocks and shares.  Currently, only half the annual allowance can be saved in cash.  But young people saving for a house deposit or retirees living on their savings cannot afford to gamble on the stock market.  They should be allowed to shelter the full annual allowance from tax.  This would have the same effect for them as a rise in interest rates, as they would get more savings income.

2.  Pensioners who do not want to buy annuities with their pension fund have had their incomes cut by Government policy when they are in an Income Drawdown pension.  I am calling on the Chancellor to allow people to take more money out of their own pension savings, rather than cutting their pensions in line with the plunge in market annuity rates.  The changes the Chancellor made last year have caused serious hardship for many pensioners, and reversing them would allow people to maintain their pension income, they would have more money to spend and pay more tax, so actually it would benefit the Exchequer.  If they have been responsible enough to save large sums for their retirement, they should be trusted more to spend it appropriately.

3.  I would like to see the Chancellor introduce policies to encourage people to save for later life care needs - at the moment, savings policy is focussing far too much on just pensions, without addressing the looming crisis in social care funding that is coming down the track.  A separate ISA allowance for care savings, which would only be tax-free if the money is used for care - either for oneself or a member of ones family - would start to signal to people that later life saving is about more than just pensions.

4.  I would like to see a more creative approach to encouraging pension funds to invest in local construction or infrastructure projects, or even lending to local businesses.  Perhaps issuing some local bonds specifically for pension funds, with a minimum return underpin that would allow local authority pension schemes to help boost their local economies, or to invest more broadly to benefit the UK economy. 

5.  I would like to see some temporary tax breaks for capital spending projects, perhaps a 12 or 24 month special incentive that would encourage firms to undertake expansion investments quickly.  Large firms have plenty of cash, but currently they are not feeling confident enough to use it. Giving them an incentive to do so, when we know they do have the money, could help kick-start growth and would pay for itself in reduced benefit spending.  Pension funds also have billions of pounds of investments, but they are currently using their money to buy gilts to try to reduce their risks.  This is a counterproductive strategy and the economy would benefit much more if they invested in projects that would provide a benefit to growth directly.

Ros Altmann is a UK pensions expert and campaigner

Savers have had a rough deal. Photograph: Getty Images

Ros Altmann is director general of Saga Group

Photo: Getty
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Forget planning for no deal. The government isn't really planning for Brexit at all

The British government is simply not in a position to handle life after the EU.

No deal is better than a bad deal? That phrase has essentially vanished from Theresa May’s lips since the loss of her parliamentary majority in June, but it lives on in the minds of her boosters in the commentariat and the most committed parts of the Brexit press. In fact, they have a new meme: criticising the civil service and ministers who backed a Remain vote for “not preparing” for a no deal Brexit.

Leaving without a deal would mean, among other things, dropping out of the Open Skies agreement which allows British aeroplanes to fly to the United States and European Union. It would lead very quickly to food shortages and also mean that radioactive isotopes, used among other things for cancer treatment, wouldn’t be able to cross into the UK anymore. “Planning for no deal” actually means “making a deal”.  (Where the Brexit elite may have a point is that the consequences of no deal are sufficiently disruptive on both sides that the British government shouldn’t  worry too much about the two-year time frame set out in Article 50, as both sides have too big an incentive to always agree to extra time. I don’t think this is likely for political reasons but there is a good economic case for it.)

For the most part, you can’t really plan for no deal. There are however some things the government could prepare for. They could, for instance, start hiring additional staff for customs checks and investing in a bigger IT system to be able to handle the increased volume of work that would need to take place at the British border. It would need to begin issuing compulsory purchases to build new customs posts at ports, particularly along the 300-mile stretch of the Irish border – where Northern Ireland, outside the European Union, would immediately have a hard border with the Republic of Ireland, which would remain inside the bloc. But as Newsnight’s Christopher Cook details, the government is doing none of these things.

Now, in a way, you might say that this is a good decision on the government’s part. Frankly, these measures would only be about as useful as doing your seatbelt up before driving off the Grand Canyon. Buying up land and properties along the Irish border has the potential to cause political headaches that neither the British nor Irish governments need. However, as Cook notes, much of the government’s negotiating strategy seems to be based around convincing the EU27 that the United Kingdom might actually walk away without a deal, so not making even these inadequate plans makes a mockery of their own strategy. 

But the frothing about preparing for “no deal” ignores a far bigger problem: the government isn’t really preparing for any deal, and certainly not the one envisaged in May’s Lancaster House speech, where she set out the terms of Britain’s Brexit negotiations, or in her letter to the EU27 triggering Article 50. Just to reiterate: the government’s proposal is that the United Kingdom will leave both the single market and the customs union. Its regulations will no longer be set or enforced by the European Court of Justice or related bodies.

That means that, when Britain leaves the EU, it will need, at a minimum: to beef up the number of staff, the quality of its computer systems and the amount of physical space given over to customs checks and other assorted border work. It will need to hire its own food and standards inspectors to travel the globe checking the quality of products exported to the United Kingdom. It will need to increase the size of its own regulatory bodies.

The Foreign Office is doing some good and important work on preparing Britain’s re-entry into the World Trade Organisation as a nation with its own set of tariffs. But across the government, the level of preparation is simply not where it should be.

And all that’s assuming that May gets exactly what she wants. It’s not that the government isn’t preparing for no deal, or isn’t preparing for a bad deal. It can’t even be said to be preparing for what it believes is a great deal. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.