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Moore&#39s code

Gordon Brown must be fuming. Basking in the warm glow of the widespread praise he received on the back of his pre-election Budget, he gets bowled a prize googly by his friend&#39s, or should that be right honourable friend&#39s, wife.

Perhaps that is a little unfair to Cherie Booth. She is, after all, a lawyer and they have to take on their clients&#39 cases. But it does add spice to what could be a humdinger of a court case, which will highlight one of the most glaring omissions from Mr Brown&#39s masterpiece.

You see, Ms Booth&#39s client, Joe Singer, a Preston pensioner, reckons the Government forcing him to buy an annuity at 75 breaches his human rights on the grounds of ageism. While his chances may appear slim, with this sort of case you just never know.

Of course, Mr Singer need not have bothered taking the case to court if Gordon Brown had addressed the issue of annuity reform in his Budget.

At the very least, he could have indicated the Government accepted there was a problem and was prepared to seriously review the situation.

Even a brief snippet in the swathe of weighty and almost incomprehensible press releases which come out after the speech and tend to contain all the really interesting things, would have done.

But the Government elected to ignore the plight of all those millions of people who have spent years diligently saving away for their retirement and now find themselves stuffed when the big day arrives because annuities are such a rotten deal.

In fact, the Chancellor not only ignored the issue, he made it worse. One of his triumphs, which drew a chorus of approval from the Government benches, was the fact he announced that this year the Government would pay back more debt that all the other post-war administrations put together.

Economically this is wonderful but there is one big problem. Less debt means less gilts, higher prices, lower yields, lower annuity rates. The long overdue abandonment of the minimum funding requirement for occupational pensions may help ease pressure in the overcrowded gilts market by way of the fact that pension funds should not have to buy as many.

But this is unlikely to do enough to stop the already dreadful value that annuities offer from getting worse, particularly with interest rates likely to fall as Alan Greenspan, chairman of the US Federal Reserve, seeks to prop up the ever more sickly Dow.

I genuinely pity the IFAs who have to tell their clients that while the pension they were sold some years down the line has done well, the money saved will produce a paltry return for their twilight years. It cannot be an easy appointment to have to keep.

Labour&#39s seeming blindness to this very real problem has allowed its political opponents to steal a march on it. Last year, Oonagh McDonald – the former Labour MP and regulator – and her retirement income working party came up with a solution to the problem – require people to take out a small annuity to cover a basic minimum income and allow them to spend the rest of their money as they please.

I would go further. People who have saved for their retirement are highly unlikely to go and blow the proceeds of that saving. Arguing that they might is patronising claptrap. They should be able to make their own decisions on how their money is spent. Nonetheless, the working party&#39s ideas have a lot of merit.

The Tories, who have not always been the most sure-footed of Oppositions, saw the potential immediately and pretty much accepted the working party&#39s recommendations in full.

It is not rocket science – tell voters close to retirement that you will dramatically increase their income and chances are they may just think about changing where they put that X in the polling booth.

Mr Brown should not allow the fact that the Tories got their first to divert him from what is a pretty sensible base to work from. His Government has not been shy about borrowing Tory ideas in the past and, whatever the Conservatives might like to claim in future, this plan is not even their idea – just something they have decided looks worth appropriating. Sadly, there has been little indication so far that the Chancellor is prepared to do this.

Mr Brown&#39s running of the economy and grasp of the bigger picture is admirable, but grubby little issues like this, which involve real people with real problems, occasionally pass him by.

Mr Singer, with the formidable legal talent of Cherie Booth behind him, may force him to wake up and take action. But even if they fail, this issue is not going to go away in a hurry.


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