'The Big Interview Transcript: George Osborne' blog discussion

Former_MSE_Penelope

This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.

Read Martin's "The Big Interview Transcript: George Osborne" Blog.

Please click reply to discuss below.

ed123_2

...they appear to be moving away from their promise to remove tax on savings interest for basic tax payers....when Martin asked a question re helping savers he refered to isa's & pensions.....

tindella

Pity no-one mentioned the removal of the 10p tax, which has affected so many people, including me. That, coupled with the disgusting low interest rates for savers, while the banks are paying themselves whopping bonuses, is ruining my retirement.

Old_Wrinkly

I echo ed123's thoughts.
As ML says: It’s interesting to me that I asked about savings, but you answered about pensions.

When Martin asked about the difference in Cash-ISA and Share-ISA limits, George Osborne again avoided answering the question.

MSE_Martin

Old_Wrinkly wrote: »

I echo ed123's thoughts.
As ML says: It’s interesting to me that I asked about savings, but you answered about pensions.

When Martin asked about the difference in Cash-ISA and Share-ISA limits, George Osborne again avoided answering the question.

Thats slightly unfair - this was one of the supplementary questions i asked but wasn't in the transcipt so i added it in as best I can remember wher eit was.

From memory his reaction was to stress the primacy of shareholding democracy (not saying i agree with that - but saying he did answer)

Bernard_Coleslaw

George Osborne said:

Banks and building societies owe it to those families to do everything they can to help them. They should be passing on the Bank of England rates or something close to it to their customers. We have supported the banks, they should be supporting the economy now.

Questions:

1. How do you think lenders, building societies in particular, fund their mortgages? (Here's a hint, George, it ain't got anything to do with Bank of England base rate).
2. How do you square this 'pass it on' call with the treatment meted out to savers? If you're getting less from the borrowers as mortgage rates follow Base Rate, what happens to savers? (See Skipton Building Society for your second hint).
3. Do you actually know the first thing about the link between savings rates and lending rates, or are you simply going for the populist red-top tabloid approach?

If his people read this (as it seems they do?), perhaps they could pass this on?

Errata

ML: On increasing state pensions in line with earnings, what everybody asks is not will you do it, but when will you do it?
GO: Our target date is 2012, but the absolute promise is within the lifetime of the next Parliament.

My granny taught me 'If you don't ask, you don't get' I asked and you came up trumps. Thank you Martin.

Old_Wrinkly

MSE_Martin wrote: »

That's slightly unfair - this was one of the supplementary questions i asked but wasn't in the transcript so i added it in as best I can remember where it was.

From memory his reaction was to stress the primacy of shareholding democracy (not saying i agree with that - but saying he did answer)

I'm confused.
Are you saying that you now don't think it is entered in the right place (seems exactly in the right place to me) or that you aren't sure the words are correct?

ML: Currently every single person who has savings in an easy access account is losing money because they are paying – after tax – less than the rate of inflation. What do you plan to do to help the country’s savers?

i.e. a question about the poor rate of return on savings accounts (unless I am mistaken) - all savers - nothing to do with pensions

GO: It is part of a culture of the last 10-15 years that has been all about spend now, borrow now, not save now. And we have got to change that.
One big theme for me is that we have got to move from an economy built on debt to one where we save and invest in the future. That is true at the macro level but it is also true for individual families. In terms of what you can do about it, it comes down to a series of measures you can take with red tape and the tax system. ...

Fine as far as it goes, but all a bit 'airy-fairy'.

GO: ... For example at the moment there is a compulsory requirement to buy an annuity. That is something we would get rid of. It puts some people off saving.

Eh? Has he read from the wrong place on his crib-sheet? Who asked him about annuities! Most people aren't saving (in banks) to buy an annuity. They are saving up for a house deposit, a new car, holidays, rainy-day, money for their kids, ...

ML: So to clarify when you retire even after the age of 75 no one will need to get an annuity?
(NB an annuity is what you convert your pension into currently, it’s a payment each year until you die see the annuity guide for more).
GO: Yes that’s right though there will be a check they’ve got sufficient income so they don’t rely on the state.
You also want to look at how the tax system encourages and rewards pension saving. I have set as an ambition reversing the effects of Gordon Brown’s tax raid which heralded the beginning of the age of responsibility. We are looking at some very specific tax measures on how we can encourage saving.
The third thing you need to do is you need to have a state pension that doesn’t drag more and more people into means-testing each year and make it very difficult for people on low to medium term incomes to save and not see their savings clawed away.

If anything, it is this section which doesn't quite seem to fit here .... Where did the 'even after the age of 75' bit come from?

ML: It’s interesting to me that I asked about savings, but you answered about pensions. What about the people who’ve got money saved in the bank – in deposit-based accounts they are losing money after inflation. What would you do to help them?

'Way to go', Martin. Keep him to the point ...

GO: I can’t give you specific promises on the tax treatment, beyond that we are looking at all the options for trying to make it more worth your while to save in ISAs and pensions.

Who asked about pensions! 'Looking at all the options' means diddly-squat.

ML: A recent study showed that many people think the fact you can only save £5,100 in cash ISA but £10,200 in shares is unfair. Would you keep that?

i.e clearly a question about the relative limits, not about whether you should keep ISAs. And essentially a question asking for a Yes/No response.

GO: We will certainly keep ISAs and we have got an idea of creating Green ISAs to help people save in environmentally-friendly companies. We want to increase equity, we want a nation of shareholders.
We want people to have a stake in the British economy so I am in favour of actually encouraging people to have small shareholdings and feel they’ve got a stake in our economic future.

More 'Mom & Apple Pie' response...
Not even a hint of answering the question posed.


I thank you for putting good questions to him.
But his responses were pathetic..
Yes he did 'answer'.
But he didn't 'answer the question' (or at least there is nothing in the transcript, which is all we have to go on, to say he did).

spurn88

If the requirement to buy an annuity is dropped, does that mean you can take your pension pot as a cash lump sum at 65 or will this mean some sort of drawdown arrangement.

MSE_Martin

spurn88 wrote: »

If the requirement to buy an annuity is dropped, does that mean you can take your pension pot as a cash lump sum at 65 or will this mean some sort of drawdown arrangement.

Wasn't specific on that - i'd expect its more about drawdown - but they will put a minimum income criteris in which you will need buy an annuity if you don't meet. Pure speculation by me though - not knowledge.

ikr2

In the interests of a balanced debate, will there be interviews with Vince Cable and Alastair Darling before the election?