Gordon’s leadership price continues to ease
February 28th, 2007
Could Labour’s “hand-over” not be the foregone conclusion that it appeared?
The chart shows the changing price on Gordon Brown for the Labour leadership over the past seven days. Three things have influenced the markets; the ICM poll a week ago showing how Brown’s Labour 13% behind; the Communicate Research poll yesterday; and the move by Clarke and Milburn to open up a debate within the party.
The danger for Brown backers is that media pressure combined with concern over poll ratings might cause a serious alternative to Brown to come forward.
Everybody says that Brown has widespread support within the parliamentary party - but then the same thing was being said in favour of David Davis during the Tory leadership race in 2005. People might only be declaring they are for him because he look like the potential winner. As soon as that appears to be less of a certainty then support could fall away.
Mike Smithson
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Mike S. And the serious alternative to our Gordon is ….. ??????
re 1. John Denham - the minister who resigned over Iraq.
Mike I may be wrong but I think we have a Chris Huhne situation here. Someone with a few thousand (actually probably only 100s) is “adjusting” Gordons price to make it look as if something is happening.
Take the money!
As the Democrats discovered in 2000, when your cupboard of talent is so bare, wounding your front runners in a contest can be fatal.
If Brown faces a big challenge he will be shown to be lacking, but the challengers aren’t good enough to beat him; there is no ‘magic bullet’ candidate waiting in the wings.
From a Labour perspective a bitter contest is a lose-lose scenario.
Mike, Good article. I think the betting move may be manipulation but also reflects a distinct lack of enthusiasm for Brown.
That said I don’t think there is anyone else with any wind in their sails. Yet.
I still think Brown will get it by making sure behind the scenes that there is no competition.
2. Mike S. John Denham - Just the latest in a series of middle ranking, middling near contenders with about as much hope of pulling off a win as a prediction by roger or commentator !!
O/T. Is Andrea aware of the Venerable Helen’s new job as a Daily Mail columnist? I can’t find the piece online but she’s written an article about her mother’s bad treatment from the NHS.
If we assume the contest will begin “proper” in late June / early July, Denham only has around 15 weeks to turn himself into a strong and recognisable public figure. Dave had 6 months to achieve that.
Additionally - there were credible alternatives to Davis who were prepared to run (Clark etc.).
The Tory contest was also an internal affair, not the virtual appointment of a PM - I feel the latter makes risky decisions (Huhne, Dave, Denham…) less likely.
From what I’ve seen I also do not think Denham has the “weight”. If Gordo v Dave is Heavyweight v Newbie, how will Gordo v Denham appear?
I may start biting into the longer odds too.
7. The words “other”, “deserve”, “each” and “they” spring to mind.
What about the value of Milliband as Chancellor rather than leader? Isn’t that more likely, yet it’s priced about the same?
10 Yes.
Labour have to face facts, they will “loose” the next election either way! May as well have brown who will copetently loose!!! Rather than milliband or Clarke who will loose!
This country has been a bit silly recently in having governments for 10 years+ they start to make more mistakes after a few years in government! You have to look at it this way - when was the last time Blair or Brown bought a sausage roll or cheese sandwich from the local cornor shop? They get out of touch!
Isn’t this the market simply responding to a little more uncertainty? If there are no other candidates, Brown’s chances are 100%. If there are, perhaps they drop as ‘low’ as 95% - added to which the ‘market’ may not be very liquid.
sorry my spelling is bad today! I also thought the tories were in power too long, that was partly Labour’s fault for having Foot followed by Kinnock! Also the potential of being defence less against the commies and the lunitic policies in some areas that they only dropped post 1992!
6. Jack - you may be right, but who would ever have though John Major would be Thatcher’s successor?
10. PtP - your betting position must be looking a little painful…do you still recommend buying this dip in GB’s odds?
They should have Caroline Flint as PM, she would get many votes off men! I would give her one for starters!!! Though think a lot of women would go for the tories though!
15 And In the early autumn before the voting on the Tory leader some on here were dismissing Cameron as a no-hoper against the heavy weights of Davis and Clark.
12 - This country has been a bit silly recently in having governments for 10 years+ they start to make more mistakes after a few years in government!
Yes, I used to know a man who said that he always voted for whoever was the main opposition party because he felt that “regular changes of government were vital for democracy”.
My argument to that is that democracy is “the process”, rather than “the result”. Nonetheless I think I sort of see his point.
Sounds like good time to dig up some classic quotes from the Con leadership contest
If the Blairites know from their leader when he will step down and the Brownies only know when he has said to GB he will step down, then there is a lot of opportunity for manoeuvre and ambush.
http://www.2020vision.org.uk
Will Salmond pull a sly victory using his name on the ballot? Sounds extreamly cunning!!! Labour don’t like it because they can hardly put Blair on there’s!
http://news.bbc.co.uk/2/hi/uk_news/scotland/6403189.stm
I am beginning to feel justified in my earlier prognostications. I did warn Peter the Punter.
15, 17. Important difference, Major had been ‘teed up’ by Mrs Thatcher as a possible successor and rapidly promoted throughout ‘89 and ‘90 -internally he was well known by the time she was ousted.
Howard accepted his role as caretaker leader and promptly set about promoting Osbourne and Cameron as potential leadership material, providing them ample opportunities to show their wares to the party.
Nothing similar has happened in Labour circles, Blair has not really identified anyone except Milburn as a successor figure and therefore it’s much more difficult to see someone ‘breaking through’ in a contest; with the possible exception of Milliband (who would frankly be a gift to us).
Sounds like a good time to pull out some good quotes from GB on major, when he first became PM. There must be some when i think Brown was Shadow Trade and industry sec. in 1991 calling for Major to call an election because “he had no mandate” in the words of the Labour party!
What do our Lib Dem friends think of this story in the Times, in which Ming seems to clearly suggest he has a preference for a coalition with Labour after the GE? Great news for those Lib Dem MPs defending marginal seats in the South….
http://www.timesonline.co.uk/tol/news/politics/article1444072.ece
23. You did warn him in relation of a Newsnight piece.
This has nothing to do with it
23 Remind me of your ‘warning’, Barry.
27 That was my recollection, Andrea, but no doubt Barry will correct us, if necessary.
21. The website looks good.
Why 2020, btw? 2010 would be better
25. I’m sure the Tory press have plenty of ammunition being held back for after Gordon’s in no 10.
29. PtP - where is your stop loss on GB?
26. How can Ming be the “middle man” ? He’s further left than Blair.
Marcus,
You protest too much. Every Tory I know would prefer Brown to Milliband, because rightly or wrongly they believe that Brown looks like the past and doesn’t reach out to Middle England.
32 About £2k, AP.
At the moment he’s a buy. I’d start selling around 1.18.
26 - a desperate effort to persuade LDs to vote to keep out the tories; the old LD two-step, leftie to the activists righty to the voters? poor old Ming the Clueless; Earth to Ming, that line won’t work any more! Nick Clegg must despair at this sort of nonsense.
33. In what sense? Would taxation and spending increase under Ming at the rate it has since ‘97?
30. Didn’t work on my pc but apparently that’s the site.
I think it’s a pun 20/20 vision - or maybe they are fans of the short format of one day cricket ?
I tell ‘ya, you can kiss that £ 400 goodbye now Mike..
By the end of March, the wheels will be coming off Gordon’s wagon..
I vote tory and would rather see Milliband as PM than Brown. If Milliband was a good PM, it would raise the political game. It is crap when we keep getting the lurch from one party to the other out of all proportion. The Lib dems would not like it because they would be very squeesed but it would be excellent politics. All we keep getting is a “presedential” Thatcher or Blair because the opposition is so weak in parliamentry numbers! Democracy is about accountability and everybody is better off if you have a strong PM and challanger.
15 scallywag. Everytime a “contender” appears over the Labour horizon just remind yourself how Labour’s electoral college works.
There’s plenty of scope for punters to hedge for a profit on the various runners-up spot but the clear winner in this one horse race is our Gordon. Everything else is froth and nonsense that keeps us anoraks endlessly amused and the media in a false tizzy but in the school of hard political knocks our Gordon will cane all opponents red raw …. or at least Nu red roar !!
Re 26. If there is a hung parliament and the Lib Dems do demand PR, is there any chance of a Conservative-Labour coalition just to spite the LDs?
re 41. The media Jack is going to play a big part. As i’ve said for months they hate a forgone conclusion and will get behind a realistic challenge. And remember - two thirds of the electoral college consists of big national postal ballots.
I still think that Brown will win but it is nothing like as certain as you state.
24 Marcus Wood Blair has promoted his henchmen just as Thatcher did with Major. Her attempts were as accident prone as Blair’s in the capacity to self-destruct: Moore , Blunkett , Mandelson, Mellor etc. etc.
Mrs T surely didn’t tee up Major as she never expected to have to select a successor at that time. She was looking for Cabinet support. That is why Portillo and Lilley were there, not as successors but as Pretorians, wasn’t it?
Blair, on the other hand, has said he was going but his timescale seems to have been truncated so perhaps his plans are not as far advanced as he would like?
I have no doubt that Reid, Hutton, Milliband and Blears are there in the same supporting role as Major was. Whether Blair foresaw one as his potential successor we do not know, well not yet. Whether one will step forward to try to stop Brown, who knows.
If they don’t then it will reflect on their party’s paucity of plausible politicians of potential.
43 Mike S. Forgive me, but the fact that every few weeks another AN Other creeps onto the stage only to scuttle away into the wings shows that the game is up and has been for months.
The media may not like it but then they don’t always get what they want.
A difficulty for any other candidate is that, while the media and the Tories have been blazing away at GB for months, if anyone else looked like a serious possibility they’d rapidly come under intense fire too. GB is battle-hardened to an extent rare in current British politics, and I think he will win any contest.
I spoke at the 2020 launch and think it’s a good idea: we want to build up momentum on policy debate to feed into the leadership/deputy leadership election in the summer - whether GV is opposed or not, he clearly needs a set of interesting proposals, and the rest of us can contribute to that. The danger is that the media will spin it as a pre-leadership bid, but on balance anything that focuses on the words “Labour” and “policies for the coming years” is helpful.
Ok, lets get a bit of sanity with this.
Brown’s price has been easing. It looks big in percentage terms but is it big in terms of actual money? As another poster has pointed out this market shift can potentially be done with low thousands. In addition, nothing has been happening for a while apart from the Miliband move in recent days. Brown is still a strong favourite.
Secondly, not all money on Betfair is intelligent.
Thirdly, is Brown going to lose this leadership race? In short no unless a) theres a serious challenger who may fatally wound or kill him off and/or b) there’s a skeleton somewhere. If there was, his odds would not merely drift, they’d go out bigger and more critically, faster than they have done.
If people genuinely think Brown is going to lose this race for gods sake give us some reasons, hard reasons. I’m not a Labour man, I personally dont think Brown will be any good but I’m not interested in the ‘we don’t like Gordon/Labour’ wagon here, I’m interested in solid reasoning. I don’t care if it turns out to be wrong just that its got some disspassionate thought behind it.
Suprised no one has mentioned this:
http://5thnovember.blogspot.com/2007/02/pollsters-answers-lead-to-more.html
“Brown uses public money to conduct polling for himself” is a far simpler story than the Smith Institute nonsense. If the story got legs, it could topple Brown very quickly.
I see Cameron wiped the floor with Blair again at PMQ’s. Blair was reduced to mumbling inacurate nonsense. Brown looked uncomfortable throughout the whole excecise in my opinion espeachally toward the end, when the Chancellour’s potential comptence as prime minister has been undermined by the 20 / 20 campaign. This grouping seems quite popular among MP’s likely to llose their seats at the next election if Brown wins! Talk about the fevered cry’s of the ship’s crew as they relise they have a kamacarzy taking the helm!
47. Yokel. Good post. Summed up the situation well.
PMQ’s - Michael Fabricant’s syrup seems to developed a mind of its own ….. unlike the Honourable member for Lichfield !!
sorry about spelling - i did some terrible ones then!
Utterly Off Thread and particularly for YOKEL’s benefit, if you can get 6/1 or close to it on OUR VIC for The Ryanair Chase at The Festival, take it. The horse will go for this race and is stonking value. I have backed it to win - but you may prefer each way.
Usual wealth warnings apply.
42 - “is there any chance of a Conservative-Labour coalition just to spite the LDs?”
Speaking as a Lib Dem, I do hope so. In the long term that would probably the best thing that could ever happen for us.
Realistically, of course, the answer’s “no”.
Labour MP@s are not as spirited as they once were. The slow car crash continues a pace!
49 Martin. You must be watching a different PMQs to me !!
re 47 Agreed. A 29% return on GB is very generous. Only point in waiting is to try to spot the end of the drifting of the price. You could have a few quid on Miliband in case you fear the worst for Brown.
The last six months show why it was sensible for Brown & co to push Blair into a deadline.
36. ‘Nick Clegg must despair at this sort of nonsense’
Indeed. There was an interesting post by ‘Orange Thinker’ yesterday that might almost have been penned by the member for Sheffield Hallam himself…
56 Me too, Jack! Maybe Martin’s set is hired from ConHome?
56. No The Blair magic has gone, he rants on deflecting attention away from awnsering the question. Labour MP’s do look like they are forcing smiles, espeachally the one over Blair’s shoulder (Brown), that is unless they always do that!
No tis bought and paid for!
56 Jack W - yes, Blair seems on fine form today and he dealt with Meacher very adroitly - who seemed to be barracked from his own side, and cheered from the Tories
I confess to only watching it uptil Cameron finishes and i went to the coffee machine while ming was doing his bit!
The 2020 thing started in the early 90’s and has gathered pace since with almost anything using 2020 as a peg.
For the C and M group to use it shows a lack of originality. All a bit stale now.
Re 21 and 30, I just can’t get the website. Keeps comming up as not found. has it just been set up?
Cameron definatly had the edge, he even codedly infered that the PM should resign!
60/61 Martin. Not vintage PMQs from any participant but IMO Blair shaded the exchanges at the margin. Decent question from Ming but Blair easily batted away.
60 “he rants on deflecting attention away from awnsering the question.”
He’s been doing that for 10 years! Plus ca change…..Ming did not seem to draw blood today either….
47. I agree. If Brown is going to lose, then someone else has to win. To win, they have to be in it. If today’s launch by Milburn and Clarke pushes a serious candidate into the race, there’s more chance of that than with left-wing no-hopers - but it’s still a small chance.
This jump in price has been sparked off in part by the poll showing Brown doing worse than Blair but he won’t be up against Blair. Only if polls show Miliband, Reid, Clarke or whoever polling better than Brown as an alternative leader can we start to consider Labour looking elsewhere. Those polls aren’t being done and if they were, I’d be surprised if Brown didn’t come out top.
61 LOL Martin
and thanks for taking it in the right spirit but I really did think Blair edged it today.
Yokel- good post at 47
The problem is that Brown is now looking less assured the closer to the handover date. This is creating uncertainty. The press are stoking the fires- and Labour is running fast into third term blues, big time.
I have always thought that a genuine contest would be healthy for the Labour Party. I also thought that C. Clarke would have a role to play- as kingmaker, kingbraker. Miliband is much too untested at the moment, and increasingly it looks like Brown also is untested. Throw Reid into the pot and we can let Labour choose between the three realistic candidates for the job (noting a possible outrider like Denham), with characters like Clarke and Milburn at the heart of the campaigns.
Did not see the ming one! He is usually a damp squib, so i make a coffee whilst he rambles on!
On a serious note, they really do need to change PMQ’s as it is crap. No figures are ever given in response to a direct question just a shifty ramble from a PM who sounds like a dodgy car sales man! It is a good laugh but i don’t think a serious thing like running the country should be run like a joke! Life / Death decisions are made by a PM and he obsficates!
I watched livingston on the parliament channel the otherday being cross examined and he gave proper qwnsers even when it was politically embarrassing to the Labour party!
O/T - The odds on Sarkozy have shifted out dramatically today. Is Chris around? I’ve not seen any reason on the news sites why this should have happened.
I broadly agree with Martin. It looked like a very clear, but not greatly significant, win for Cameron IMO. More significantly though, I thought, were the number of very glum faces on the Labour benches.
Frank Field has just said on BBC that Brown’s campaign “will collapse” if there is a serious contest because of his psychology.
If it any consulation i think Clarke would be even worse than Brown for Labour. It is Brown or milliband, that is the choice. Reid has all of Brown’s negatives plus the old bill found some cannibis in his house so labour cannot go on about that in relation to Cameron.
I suppose ruth kelly might be an interesting one! I suspect she is interesting in private.
I am surprised that Labour seem to be imploding again so close the locals!
65 Benedict Try here:
http://www.the2020vision.co.uk/
Its ‘New Labour’ - .co.uk, not .org.uk!
74 It’s quite striking, Steven, how people quite literally *see* the programme differently. I am sure you, Martin, Jack etc are reporting honestly what they think but the perceptions are so different because of the attitudes the viewer brings to the programme. Fascinating stuff for psychologists…and punters!
Kindly note that I have finally learned how to spell your name correctly. Proud of myself.
77. Fin de siecle effect, the same as the last Tory govt.
re 75. I think that there is a lot in that although Frank Field is not the most dispassionate critic of GB. Brown has been so desperate to have a coronation. Can you imagine him taking part in leadership TV debates when he will come under a bit of tough scrutiny - something he is not used to?
All to play for and I notice that his price is tightening again.
Witan at 44 “Mrs T surely didn’t tee up Major as she never expected to have to select a successor at that time.”
I’d disagree, by the time she boosted Major to Chancellor she knew she would face a serious challenge from Hestletine at some point soon. Clearly she thought she would beat him off, but just in case she promoted Major because she suspected most of the others would renage on her stance on Europe and tax if she was ousted (she was wrong - he renaged too) and wanted above all to make sure Hestletine didn’t succeed her whatever happened.
Blair has no such forward plan; but then as I said the other day, Blair is not a planner.
81. Ptp trying to shore up his position?
Mike,
I don’t think it’s price manipulation. I think people are realising something about media dynamics and making trading bets. The media is obviously desperate for a contest - hacks don’t care about anything other than the Westminster prism of “a story” and attacks on Brown are a much better story than a calm coronation. The media will ramp everything for months to provoke trouble, hence even if one thinks Brown is the “rational” bet, it may be “rational” to lay him for now based on natural media dynamics…
?
Anon
82. Interesting point, he did bring milli on quick though. I remember going to PMQ’s back in 2002 and seeing milli their and thinking he could be PM one day, Wow!(I had read in the papers, that alot of insiders considered him to be a good long term bet!). It’s good to see politiacians in the flesh before they make it to the top. I saw David Cameron, when i was in Mcdonalds in Leeds railway station in 2005! I think i was the only one who recognised him. The two people who were with him new i clocked him! Wished i got his autograph now!!!!
It stands out more in my mind than bone head and blair jousting at PMQ’s or rather Blair squering bone head!
sorry second paragraph relates to seeing milli!
75. Oh come on - Frank Field is a fruitcake - and a bitter fruitcake at that.
81 - worth pointing out that brown took on ken clarke a few times during the general election in 1997 and bettered him too.
What has he got to be bitter about brown for?
Blair yes, Brown no.
Field loves the Labour party and does not want to see the party that he loves select a Kamacarzy leader for his party!!!
47. No sitting MP faces the electorate unnecessarily.
Gordon Brown’s part of the Labour party has manoeuvered Tony Blair into stating he will not lead the Labour party. Effectively Blair has been prime minister since that declaration, while Brown has been so clearly the Labour party leader in all but name, that the last six months might be regarded as a trial run for separating the leadership of the Labour party from the office of PM under a left-of-centre administration. Blair has been supported in the Commons by the Opposition on policy central to his administration - Iraq, education - in the face of Labour revolts that threatened (agreed not necessarily but threatened) the continuance of the current House when it has three years to run.
Blair can dissolve this Parliament if he chooses; that is part of the powers of his office. If you do not believe in his commitment to saving us all from Brown that is your call but sitting MPs are not going to risk their seats for Buggins and his turn.
88. Labour had the big mo then! Challanging is easy, having to explain away unpopular stuff is not so good. That is why in PMQ’s blair avoids awnsering the question. I just don’t find his rants appealing anymore or plausable - the game has moved on…….. so shoud he!
90 - more tin foil hat nonsense.
is martin day a spoof?
O/T
What an odious little creep Blair is.
http://www.timesonline.co.uk/tol/news/poli…icle1448260.ece
February 27, 2007
Blair: football clubs must cut ticket prices
David Byers
Tony Blair today called on Premiership football clubs to lower their ticket prices, claiming that the “ordinary fan” is being priced out of the market.
The Prime Minister took the rare step of getting involved in the issue after MPs protested in a Parliamentary motion that the prices were beyond the reach of many supporters
90. Quite right, i doubt Blair will dissolve parliament though. It would kill labour off as they would be leaderless. Blair said he would not run for another turn!
90. Hatfield Girl - you seem obsessed with this ‘Blair carrying on as PM whilst not leader of Labour’ stuff, which is sheer nonsense, as is all the guff about Blair staying on. If he were to go back on his word now, the PLP would lynch him.
93. What do you mean spoof? An MI5 operative or spy? You should see the size of my gun!!!!
94. Pathetic populism..reminiscent of his excruciating performance during the Glenn Hoddle ‘disabled are paying for their past sins’ saga.
98 - no doubt you feel the same way about that well known ‘footie fan’ david cameron jumping on the bandwagon over standing at football grounds?
TJM, To backpedal slightly - I’ve been in mid air and missed a bit - with all due respect, you are a drivelling moron of the first water.
To say, as I did, that Labour harbours elements who ‘dislike Britain, dislike patriotism and dislike white people’ does not make me the next editor of Der Sturmer. I’m simply pointing out a fact.
You obviously weren’t here a few days ago when Tyson, that articulate and intelligent Labourite, let the mask slip for a second and started ranting about, yes, how he hated lots of white people, especially thick white chavs ‘with all their abortions and their binge drinking’. Try saying that again but replacing a few words, e.g. ‘I hate thick black people with their dope smoking and their fornication’.
It wasn’tvery nice - and it was quite a revelation. Tyson swiftly realised he had shown too much of his ideological petticoats and hastily tried to backpedal, but the damage was done.
There is an element on the British left, indubitably, which is deeply uncomfortable in its own skin - they hate Britain and Englishness and white people and patriotism and all that - because deep down they hate themselves. Orwell skewered this anti-patriotic lefty mindset years ago.
Roger - the idea that I could be at the philosophical heart of the Tory party is as distressing to me as I’m sure it is to the Tory party. And as untrue.
Incidentally, though - you’re in the film biz aren’t you? - a few minutes ago at Bangkok airport I turned around to see… Oliver Stone! Unfortunately he climbed in his VIP limo before I could pitch my latest groovy film idea. *sigh*
The reason nobody will challenge Brown is the likely contenders know;
Cabinet ministers that challenge him will be out of work if they lose
To beat him involves an open debate on policy
Debate leads to an inevitable lurch left that will see the Party implode
The prize of a collapsing economy and no chance of election victory is hardly inviting
If the polls were closer it might be worth risk.
97 Martin Day. A derringer I hear !!
100. On hols or work?
There’s a wall of silence on the backbenches at the moment. It’s like the Krays. As soon as Brown’s under lock and key (or back in the attic?) they’ll all be speaking out.
101. Those Cabinet Ministers will be out of work in a couple of years anyway.
7. Matt…here’s her piece (pic included)
http://www.dailymail.co.uk/pages/live/articles/health/healthmain.html?in_article_id=439077&in_page_id=1774
90. If posts could be written in green ink, yours would be one.
102. I don’t understand?
106. Her upset is personally understandable. But to write in this way in the Daily Mail is politically unforgiveable.
108 Martin. A very small weapon but with a big balls !
108. LOL!!! You might say that - I could not possibly comment!!!!!
David Herdson The liquidity on the Betfair market for the French Presidential election is pretty low so I don’t think we should get carried away by short term movements. The main bookmakers still seem to be rating Sarko a strong odds on favourite. That said yesterday Le canard enchaine, a scandal sheet ( a bit like Private Eye) published a story suggesting that Sarko had beeen enabled semi corruptly to buy and then sell on at a large profit a couple of flats. He responded a little too furiously but apparently quite effectively with figures showing he had actually paid the going rate and had also spent a lot of money improving the properties before he sold them. It’s difficult to know from this distance whether any mud has stuck but Sego’s campaign is staying well away perhaps because the same newspaper has threatened revelations about taxes paid or not by she and her partner Francois Hollande, the Socilaist Party boss. The main shift in betting odds in the last couple of weeks has been towards Francois Bayrou. He was 20/1 a couple of weeks ago; now he’s down to 7/1.
OT. Italian PM Prodi faces a vote of confidence in the Senate :
http://news.bbc.co.uk/1/hi/world/europe/6403561.stm
I have to respond to Martin Day’s point 72 on the previous thread where he said: “No the raid on “pensions” is actually the “Tax Credit” thing. What happens is when you sell shares you used to get the 10% back. This applies to corporate pension funds as well as inidividuals. It therefore stiffiles the growth of said pension funds. Now every transaction gets taxed on it.”
I’m sorry but what a load of rubbish! “When you sell shares you used to get 10% back”? “Now every transaction gets taxed on it”? You are either wilfully making stuff up or haven’t the faintest clue what you are talking about.
What happened was that Advanced Corporation Tax was abolished (and business welcomed it, as it was a nightmare to calculate). Pension funds used to reclaim 10% ACT on dividends, but as ACT was abolished, there was nothing to reclaim. The Treasury offset this by cutting corporation tax from 33% to 30% for large companies and from 23% to 19% for small companies. Cutting corporation tax increases a company’s profits after tax, which the company can choose to either distribute as an increased dividend, (to make up for the inability to reclaim ACT) or retain within the company for future investment. As share prices are based on profits after tax (which are used to calculate Earnings Per Share), cutting corporation tax would have increased share prices, everything else remaining equal, which should have benefitted the pension schemes that had invested in them.
What actually hurt pensions was two pieces of legislation from the Major years: the Social Security Act 1990 (which came into effect in 1991) and the Pensions Act 1993 (which came into effect on 6/4/97).
The Social security act 1990 introduced revaluation of deferred pensions in line with the RPI for the first time. To give you an idea of the effect, someone who had left a scheme aged 30 in 1991, with a preserved pension of £1000 p.a. would get £2097 p.a. at aged 60 if RPI averaged 2.5% p.a. between leaving and retirement. Prior to this act he would have got just £1000 p.a. at 60.
Therefore at a stroke the reserves you had to hold increased sharply - and the employer would have to pay.
The Pensions act 1993 changed the definition of final salaries, introducing a concept called dynamism, which had the effect of bumping up the final salary used. This act also increased revaluation of deferred GMP and introduced the Minimum Funding Requirement, which again required employers to inject much more money into schemes.
All these things were expensive.
It’s no surprise therefore that the WH Smith scheme closed to new entrants in 1995, and the HSBC scheme closed to new entrants in 1996, as did umpteen others.
This idea that the abolition of ACT killed final salary schemes is false, as the govt was careful to offset the effect with corporation tax cuts. Twas Major’s very generous legislation increasing benefits that did it.
100. No need to be uncivil. For a start, I would like to clarify that I never accused you of being a Nazi or anything else. I just meant that the mindset of your views, *as interpreted by roger*, was not the “heart” of the Conservative Party. I said your claim had racist undertones - that doesn’t mean they were necessarily racist, but that similar soundbites can be heard from racists trying to get their point across without being too explicit.
Secondly, I did indeed read Tyson’s posts a few days back and was as shocked as you were. However, as far as I know, Tyson is not an MP. Such views clearly do exist within some people, but I don’t believe they have parliamentary representation. Perhaps you could prove me wrong with some quotes from MPs who hate white people?
113-JackW Fingers crossed for old Romano- I know the last election was a betters paradise, but sentiment wants me to hope that “the Prodder pulls” through.
seanT at 100- how dare you refer to me as articulate or intelligent! This is surely libel in its worst form. I am consulting my lawyers with immediate effect.
114) Brown’s windfall tax on the utility companies didn’t help Pension Funds as they were big investors..
oh dear, the snowflake dodgy facts blizzard is in full effect.
115. What a weasely post…’you might not be racist but you sound like a racist blah blah’. Either say what you mean or perhaps keep quiet.
114 - “What happened was that Advanced Corporation Tax was abolished (and business welcomed it, as it was a nightmare to calculate).”
It wasn’t that difficult, Snowflake, and certainly no more difficult than the Shadow ACT regime which followed. My recollection was that business was initially happy that the Chancellor was addressing the issue of ACT mountains which international companies had stockpiled over the years without the slightest prospect of ever utilising the carried forward credits. Its contentment was reduced sharply when it became clear that the Shadow scheme did little to resolve the issue.
114. The point you gloss over Snowflake is that the net effect of abolishing the tax break given to pension funds on their dividends has had the effect of reducing the ROI that pension funds used to get. This set off a widely predicted downward spiral.
The inflows of cash into pension funds went down as people realised their was less incentive from the taxman to tie up their money until retirement. As less funds went into pensions less funds went into the stockmarket and share prices sagged, this in turn reduced the extrapolated future returns to pension funds to finance the commitments they already had; resulting in a pensions ‘time-bomb’.
The whole thing has been made worse by unneccessary insistances on the purchase of annuities financed by actuaries who have increased to costs to cover the longer life expectancies.
No amount of wriggling by you are anyone else in the Labour Party can hide the fact that the Government in effect withdrew £5bn each year from the stock market and the cost has been immeasurable.
Another unwanted side-effect of Browns stupidity was the subsequent rush by savers to plump for investment property instead of pensions thus taking billions out of the productive economy and forcing house prices to unsustainable levels.
It will take at least two decades of careful pension legislation review to repair this damage; Labours biggest pension scam since the invention of ’social security’ in 1947.
114 - So Snowflake what are you against? Revaluing deferred pensions? Or pension funds having to be funded even to a bare-minimum MFR level? The tone of your post seems to imply you oppose these things and think they were a mistake. (Why doesn’t Brown reverse them if so?)
Overall I agree with you that the decline in DB schemes is a long-term trend and attributable to many things amongst which abolishing tax credits on dividends hardly rates a mention. But to try to pin it solely on the Major government as you do is every bit as wrong as those who seek to blame it on Brown alone.
(And highlighting the small numbers of schemes which closed pre 1997 while ignoring the mountain of schemes that have closed since - come on, try to be a little less partisan and more people might bother reading your posts.)
Marcus Wood the only one who knows whether or not Major was seen by Mrs T as a successor is herself and she is not telling. He was certainly one of her acolytes.
He was spectacularly promoted when Howe was shoved aside and then used to plug another gap when Lawson jumped ship. If anything he seems to have been used as a human shield more than a chosen successor. Mrs T was easily smart enough to realise that if she got the shove marking someone as her successor would be the Herodian kiss on the door post for the chosen one.
Hutton seems to be in a similar space in cabinet terms. Rapidly promoted as a loyalist when the world started to crumble, hating the main challenger to the boss, but not ambitious or skilled enough to do a Major and make piece with the devil who challenged the leader and get the prize himself.
Those that belittle Major ignore the life skills he used to move from educational ‘failure’ to local councillor to banker to PM. He may be grey but he had grit and political skills that made the movement in the Northern Ireland situation possible, kept Heseltine on board and win in 92 against all odds yet get more votes than any other post war government, and get Maastricht through despite his party Eurosceptics. Pity about the ERM.
123. A lot people would say pity about Maastricht too. He should have used the Danish ‘no’ vote to kill it. Instead he forced it through and split the party, paving the way for the disaster of 1997. This was as big a misjudgement as the ERM was.
114.’The government should restore the ACT (Advance Corporation Tax) credit for occupational pension schemes - pension funds used to get the 20 per cent tax on their UK dividend income refunded but the perk was removed five years ago. Total cost to UK pension funds is estimated to have been £5 billion. Reinstatement of the tax credit would, at a stroke, up the predictions of future income and have an instant impact on pension fund valuations - removing the need for many companies to even think about fund wind-up.’
This was Amicus’s view on ACT,admittedly from back in 2003, but I doubt that its changed.
119. The amount of petty squabbling on this site is incredible. I never even criticised SeanT for being racist! My point was that his post had the potential to be interpreted as racist, and that it was wrong of roger to take one interpretation of one Conservative voters views as the “heart” of the party! You completely misinterpreted what I was criticising.
It seems Frank Luntz is completely right: It’s not what you say, it’s what people hear.
121. The point you are glossing over is that abolition of ACT was accompanied by a cut in corporation tax. You seem to think this was of no benefit to pension schemes. Actually it increased earnings per share.
122. I’m just making the point that the demise of final salary schemes had very little to do with the abolition of ACT.
As you indicate, repealing the 1990 social security act and the 1993 Pensions act would be very unpopular - people like the idea of increased benefits, and don’t really understand the cost.
What we’ve got in the switch to money purchase schemes, is very similar pension provision to that final salary schemes provided before the 1990’s legislation, but with the added negative that risk is transferred to the employee rather than employer. Plus, the public sector has honoured this legislation, so private sector people arn’t comparing their situation to pre-1990 final-salary schemes, they are comparing them to current public sector schemes. Tories love to moan about this ad nauseum - the irony that this is their doing completely escapes them.
125. And Amicus like everyone else is ignoring the benefit to companies and hence to investors like pension schemes, of the cut in corporation tax.
114
It’s amazing the number and varieties of excuses coming from Labour on the company pensions collapse,on the previous thread it was all put down to the 2001 dotcom crash and now you blame Major!
I know from my own experience in the multi national I spent my career with,who closed their final salary program (in 2000) was a direct result of GB’s pensions raid.At that time the well known Actuaries we used warned that this would be the end of the company final salary scheme,and how right they were with only 30% of these schemes surviving since 1997.
The mass of increased regulations and bureacracy introduced by GB didn’t help either,but was not the major cause of the closure.
The fact is that in 1997 we had the best company pension schemes in Europe and 10 years later we have the worst says it all.
127. Wrong wrong wrong. The tax changes made by Brown were designed to raise revenue, even he doesn’t deny that; where did the net £5bn Government gain come from- a clear blue sky?
The profits made by companies and the profits made by pension funds on their investments are totally different things.
Brown hoped that reducing companies corporation tax slightly would encourage directors to pay out less each year in dividends.
He planned on companies retaining and re-investing more of their profits and thereby growing fast enough to ‘hide’ his cash grab - the first ’stealth’ tax of many; but his plan failed.
127 - “the irony that this is their doing completely escapes them”
The irony is that in seeking to blame Tory policy alone for the shift away from DB schemes you probably deserve the equally wrong-headed analysis which seeks to put all the blame your master’s way. And no prizes for guessing who the public will be more willing to believe when it comes down to a slanging match over it.
114. No but what started as a trickle has turned into an avalanche!
This is from the Institute of financial services handbook: page 69:
“Non-taxpayers cannot reclaim the deducted 10% tax credit” this means that it is a regressive tax if you are a non taxpaying pensioner!
127 Hey, Snowflake, you answer your other two critics and ignore me! What have I done?
Is it that you don’t want to encourage my skiving or do you think I just don’t pay proper attention?
I seem to remember reading in said IFS handbook, that most people thought it was a bad thing! I am taking the exam soon, so i will look at it again and find the page. Please do not say i am wrong as you made me wonder about how well i had taken it in. My political interpretation from your view may be wrong but the causal effect i badly described was correct it a disinsentive to the investor!
I also note that the chancellour wants people to change their property portfolio’s into Realesate investment trusts (Reits) and nab a one off charge of 2%! More effective tax grabbing.
Bloody spelling is bad today!
I think Brown’s problem is the way Mike draws his graphs. He has managed to make a very small movement away look like K2!
I bet snowflake has a nice cast iron public sector pension..
Here are the key bits of the e-mail sent by Alan Milburn and Charles Clarke to all Labour MPs and peers:
Dear Colleague
As we all know the coming months are critical for Labour’s future. After ten years in office we will need to demonstrate that we have the vision and the policies to successfully meet the future challenges faced by our country and the wider world.
Like many others in the PLP and the wider Party we believe that requires an open participatory debate.
There are some welcome signs that the debate is beginning to happen within Government, in various think-tanks and in contributions made by a range of colleagues. From our discussions with fellow MPs and Party members, however, we believe there is an enormous appetite for the debate to be taken forward and given more focus.
There will, of course, be many different points of view about the future direction we should take as a Party but we believe the critical thing is to develop an open process for ideas and views to be aired.
Many colleagues have suggested that such a process would provide the opportunity not just of addressing the Party - important though that is - but of engaging with the wider public.
To that end we have decided to launch a new initiative to promote debate in what we hope and intend will be an open and participative way.
We are inviting all Labour MPs to the launch event which will take place at 10.30am on Wednesday 28th February [it gives details of the location, in the City of London] … all Labour colleagues from both the Commons and the Lords are most welcome to attend.
Yours
Charles Clarke MP and Alan Milburn MP
E-mail
I really can’t understand this hullabaloo about Gordon’s plans to make potential immigrants partake in community work. Every immigrant I know would wholeheartedly welcome such an opportunity: it would allow them to become quickly acquainted with the British way of life (every country’s culture is most poignantly reflected in the workplace); it would imbue them with a sense of pride, self-worth and belonging; it would allow residents of this country to work with, and thus understand and respect, people from foreign lands. Most importantly it would kill off the Tory lie that all immigrants are work-shy scroungers only here to claim benefits. This is a very liberal, progressive measure for which Gordon can’t be praised highly enough.
How many Mp’s turned up - did they have the magic number for a challange to mr Brown? Maybe that is why he looked so deflated at PMQ’s - he thought that he may never get to have his turn!
130. “The profits made by companies and the profits made by pension funds on their investments are totally different things.”
They are related. The dividends that companies pay to their investors (including pension funds) come from earnings after tax. Where else would they come from, pray? If profits after tax don’t increase, neither can dividends. It remains true that by cutting corporation tax, earnings per share increased and teh companies concerned had the option to distribute the increase as a dividend.
I also note that you completely avoid dealing with the issue of the 1990’s legislation.
A possible future settlement could be that we approach companies and ask them if they are prepared to reinstate final salary schemes if the 1990’s legislation is repealed, and try to sell this to the public as giving up some benefits in return for the guarantee that is intrinsic to final salary schemes.
Whether the public would accept this is another matter. One of the draw-backs of final salary schemes is that they reward people who stay with a company their whole lives and penalise those who chop and change. Most people end up deferred pensioners.
Those who criticise the demise of the final salary scheme are also by implication criticising the change in the labour market that induces many job changes. Which is very odd coming from Tories…
I really can’t understand this hullabaloo about Gordon’s plans to make potential immigrants partake in community work.
yeah right, they migrate here to do work for nothing! Pull the other one. The problem is Brown going on about Britishness - He needs to leave it alone! Everytime he goes on about it - the Labour party start thinking “mmm- Brown - it ain’t going to work!” Has anyone else noticed this correlation?
When Brown was at Toyota, the other day, people thought more of the decline in manufacturing industry and the yawning trade gap than him being scottish!
141 Still ignoring me, Snowy? That’s a bit mean when I defended you from Benedict’s abuse. AND I tried to calm you down when you were making a fool of yourself the other night in the riotous ‘Cameron/drugs’ debate. OK, I didn’t succeed but I did try.
Ah well, rejected again.
TJM, fair nuff, if you withdraw the “you are a racist” implication of your comment - which was clearly there - then I withdraw my “you are a drivelling moron of the first water” remark. But I hold it in reserve in case you come out with such egregious piffle again.
As for the MPs thing - there have been Labour MPs on this site (I name no names!) who have admitted to being very uncomfortable with British patriotism, having no patriotic feelings etc. Fair’s fair - if that’s what they feel then that’s what they feel - it’s a free country, and they can voted in or out by the electorate if people take exception.
And you want an example of a Labour MP disliking white English people? How about Jack Straw saying, as he did, ‘the English have a propensity to violence’? I find it hard to imagine his saying that about any other people.
‘Africans have a propensity to violence’. ‘The Irish have a propensity to violence’. ‘Germans have a propensity to violence.’ ‘The Jews have a propensity to violence’.
Nope, can’t see him saying any of those. But the thick white chavvy English are fair game for Labour middlebrow p@ntywaists like Straw.
139. I think things have moved on from “the Tory lie that all immigrants are work-shy scroungers only here to claim benefits”.
Mass imigration is not good for any country! Moderate it is argued is good for the economy.
It is the aslum seekers that people use to not like. That has dropped now as recent figures show.
O/T, but the last sentence of this article was news to me.
http://news.bbc.co.uk/1/hi/england/west_yorkshire/6403595.stm
Have I missed something?
133 pete the punter- do not take it personally, after all I have been characterised as a self loathing, English hating, anti white bigotted, jack booted marxist of the worst order.
But please guys do not get snowy going on pensions- it makes for the most boring thread for those economic illiterates like myself.
“also note that you completely avoid dealing with the issue of the 1990’s legislation.”
I didn’t deal with it because it was a totally mischevious red herring. There was no pensions crisis before 1997 -indeed every preceeding piece of legislation for twenty years had been designed to reduce the future burden on future taxpayers of the wholly unfunded state pension - especially serps - by encouraging private saving instead.
It is accepted across the Western world that the falling birthrate would potentially create an unsustainable burden on future tax payers - by 1997 we were the only European nation to have largely funded our future pensioners as a direct result of Tory opt-out legislation from the mid 1980’s. Oh how we smugly read about the French, German and Dutch facing a gigantic ‘black hole’…..
Now after 10 years of Gordo’s idiocy we are worse off than most of our EU neighbours.
146. Selected for the a-list - sloppy journalism! (What do you expect from that communist bastion the British broadcasting communism network!
142: you are clearly not up to speed with the matter in hand so allow me to educate you. The vast majority of immigrants have fled persecution, torture even death. After that, for an immigrant to be allowed to do an honest day’s work to benefit the members of her adopted community is both salutary and ennobling for her as well as the resident population who will enjoy the effects of such work.
73- David Herdson
I suppose the move is related to a press article from this morning’s “Canard enchaîné” (weekly satiric and inquiry paper, fiercely independent(no ads) but traditionnaly left-wing).
They put a full page regarding a flat Mr Sarkozy bought in 1997 and sold in 2006. They accuse him of having obtained a reduced price from the promoter (a total of 300 000 euros or 200 000 pounds).
He denied it vehemently and has started to produce proofs of his good faith.
Such accusations are not unusual in French campaigns but Sarkozy is more than furious as he has regularly challenged any one to acuse him of any wrongdoing.
I don’t think this wil have much impact as no one is really running with it (except left-wing bloggers) Royal’s camp have avoided to comment. They don’t want to be accused of smearing.
Le Canard has announced an article on Royal’s properties next week…
143. Peter I’m not ignoring you - I accept your point that companies didn’t find the Shadow ACT regime much different to calculate. Apologies if you find the pensions discussion boring, but I’m fed-up of mis-information being parrotted by Tories day-in-day-out. (BTW if you are wondering what I’m doing on the board this afternoon, I’ve got the afternoon off!)
148. “I didn’t deal with it because it was a totally mischevious red herring. There was no pensions crisis before 1997″
Actually there was a crisis be