I note that Mr Cameron's private secretary has written recently to all members of the Cabinet saying, among other things:
I will write to the chancellor about this.
2 July 2012:
22 July 2012:
No problem. The first opportunity will be in September. I will ask my researcher to work on drafting that with you.
I was not contacted by Mr Hemming or his researcher re tabling a Parliamentary question. But Mr Hemming had wriiten on 2 July to the Chancellor, George Osborne, and on 4 August I received a copy of a letter (dated 25 July 2012) to Mr Hemming from the Commercial Secretary to the Treasury, Lord Sassoon.
Cover letter from Mr Hemming to me (2 August 2012): (click to enlarge)
- ensured the amount that people can save tax-free is not eroded by inflation by indexing the amount that can be paid into ISAs each year. This means that the Government has increased ISA limits by £600 this year, including an extra £300 for cash ISAs;
- announced at Budget 2012 that Government will work with industry to improve competitiveness and transparency in the ISA market, particularly by encouraging the industry to work towards faster ISA transfers;
- introduced Junior ISAs, offering parent a clear, simple and tax-free way to save for their child's future;
- confirmed that employees will have a new duty to automatically enrol qualifying employees into a pension scheme from October 2012. This has the potantial to encourage 5 to 8 million more people to start saving or save more into a workplace pension scheme. The Government is also establishing the National Employment Savings Trust (NEST) to provide a low-cost, high-quality pension scheme for individuals not currently served by the market;
- set up the Money Advice Service to offer free and impartial information and advice on all money matters available online at www.moneyadviceservice.org.uk , face-to-face, or by calling its helpline on 0300 500 5000. The Money Advice Service also launched a financial health check to help people proactively manage their money. It also publishes comparative tables of savings accounts and the interest rates offered; and
- given individuals more choice over the use of their pension savings to provide a retirement income by removing the effective requirement to purchase an annuity by age 75.
- The cash ISA limit has nothing whatever to do with maintaining the purchasing power of cash.
- ISA transfers, ditto.
- Junior ISAs, ditto.
- The NEST pension scheme is not a savings vehicle but an investment vehicle, a distinction that surely cannot have escaped someone with Lord Sassoon's background in the financial services industry. The nearest to cash within pension funds is either money market funds (which have a big fat question mark over them at the moment, I can tell you as an IFA) or bank/building society cash funds that (a) usually offer a significantly lower rate than cash ISAs and (b) are (except perhaps for SIPPs) not covered by the FSCS in the way that individually held accounts are (see the Pensions Advisory Service's article here).
- The Money Advice Service is also irrelevant to the purchasing power of cash savings.
- Changes to the requirement to purchase an annuity at age 75, ditto.
Parliament is not sitting at the moment.
I will look at the letter later next week (I am at a funeral on Monday) and come back to you on this. The sovereign debt issue is a very serious issue, however
Email from me to Mr John Hemming MP, today (03 March 2013):
- the British Government creditworthiness has been downgraded by Moody's,and
- the pound has dropped, and
- inflation looks set to rise further, especially for imports;
Lord LEE of NEWTON