Ian Mulheirn

The pensioner lobby has been predictably and tiresomely strident about George Osborne’s ‘granny tax’. Ros Altmann, Director-General of Saga, called the move to bring pensioners’ tax allowances into line with everyone else’s an ‘outrageous assault on decent middle-class pensioners’. It’s nothing of the sort. In fact, it’s high time that pensioners start to contribute to the unprecedented fiscal squeeze we’re going through — and here are the three main reasons why.   First, they’ve contributed next to nothing to the deficit reduction programme so far. Better-off pensioners are set to lose just over 1 per cent of their income from the changes planned by 2014, according to the IFS.

The Chancellor’s projections for economic growth look to be on the sanguine side. Having said that, the Treasury’s economic forecasts have tended to be closer to out-turn than has the independent consensus over recent years. Whether they will continue to be so in these uncharted economic waters remains to be seen. In terms of the state of the public finances, the Treasury’s recent borrowing projections have consistently been over-optimistic and many will consequently take them with a pinch of salt. If this again turns out to be the case, it will have consequences for the sustainable investment rule, which will come perilously close to being broken even on yesterday’s central projections. The Chancellor’s focus on green issues is to be welcomed.