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Waiting for Gordon

The industry awaits Gordon Brown’s last Budget with a number of loose ends to tie up and perhaps a surprise or two before the great clunking fist moves on after a decade as Chancellor.

Brown recently managed a five day partial U-turn on a U-turn over film tax relief so who knows what treats or traumas for advisers will be pulled from his red box next week.

More light should be thrown on the fate of Pension Term Assurance after the unexpected pre-Budget report crackdown.

By all accounts the Treasury is still far from sure of the best way forward with a number of advantages and disadvantages for suggestions such as self certification and other proposals offered by the industry after intense lobbying.

Once again the Treasury appears in a muddle because of poorly thought-out pensions simplification legislation conflicting with the department’s principled stance on the role of pension tax relief.

Asps of course are another tax relief battlefield and one where the industry appears bloodied and battered after the 82 per cent tax hit in the PBR.

At Money Marketing Live in Scotland last week, Hornbuckle Mitchell director Neil Marsh accused Standard Life’s John Lawson of giving up on the battle after Lawson suggested the industry had lost the fight over Asps.

Lawson said the provider had lobbied hard to change the Government’s mind but to no avail and the industry needs to reluctantly move on.

A new Government appears the only hope for a fundamental change of policy in this area with an end to forced annuitisation likely to be part of the Conservatives’ election manifesto.

More tinkering with trusts could take place after the last Budget threatened to devastate the market before the industry managed to water down Brown’s raid of IHT planning.

There have also been suggestions for a top end increase in stamp duty which could be coupled with raising thresholds at the lower end.

Elsewhere, former welfare reform minister Frank Field tabled a Private Members Bill calling for a levy on unclaimed assets of banks and building societies to help victims of occupational pension scheme collapses.

A leak to a National Newspaper of the Parliamentary Ombudsman’s report into the collapse of Equitable Life suggests Ann Abraham will find the Government guilty of failing to properly regulate the provider.

A draft report is currently with the Treasury as the Government begins to prepare its defence, with the FSA also expected to be in the firing line.

The news could potentially mean compensation payouts to millions of affected policy holders but given the Government’s response to Ann Abraham’s last devastating report on occupational pension scheme collapses no-one will be holding their breath.


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