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| 21 February 2012 The Impending Pensions Crisis
The industry, which should be assisting us to manage and defuse this time bomb is failing. They are taking advantage of a massive "asymmetry of information" between themselves and their clients to profit through opaque pricing. There is a massive "market failure" and the consequence is severe for millions. According to the FSA around 30% of all pension pots are siphoned off in charges. The UK charge structure is higher than in other European countries. In broad terms this means that the majority of tax relief (the Government chips in £35 billion a year) goes not to investors but to fund managers. 85% of retirees buy annuities from their investment provider without getting quotes from the open market. There are many instances of retirees purchasing sub-optimal products due to poor understanding and artificial complexity. The market does not work because the types of charges and indeed types of annuity seem designed to make comparison almost impossible. Genuinely independent advice has been difficult to obtain as so many advisors have earned their living in commissions from the providers themselves. So what should the Government do? We can draw a parallel between the charging practices of annuity and investment providers and the complex tariffs used by energy providers. The Government is rightly enforcing simplicity on the big 6 energy companies and they should do so in this industry too. We will be told we are restricting choice but this is self-serving nonsense.
The advent of auto enrolment makes the case for reform even stronger. More unsophisticated consumers will be introduced to a market they can't understand. If the industry fails to address these issues and the Government fails to act, I believe we will be on the cusp of the next mis-selling scandal. |
| 18 February 2012 Arpley shouldn't be North West's dumping ground - Mowat Warrington South MP, David Mowat, last week called for a Commons Debate on regional landfill policy to protect Warrington from failures of waste policy elsewhere in the North West. He noted that from 2013, Warrington Borough Council will no longer be sending any waste to the Arpley Landfill site, but the site's operator is still requesting a 15-year extension to the life of the site.
In response to the question, Leader of the House of Commons, Sir George Young noted that new provisions in the Localism Act, which came into force in November, placed a new duty on Local Authorities to co-ordinate the effective handling of waste to meet the needs of their communities. David Mowat is backing the residents of Saxon Park, Sankey Bridges and the surrounding Area in fighting the licence extension. A petition has been launched at http://alog.org.uk/ David Mowat said: |
| 10th February 2012 MP calls for more funding for non-league football In a Question to the Department for Culture, Media & Sport, Mr Mowat noted that 50% of the FA's funds currently goes back into the professional game, whilst many non-league clubs are struggling for financial survival. Replying for the Government, Sports Minister Hugh Robertson MP indicated that this may be something the Government will seek to address in the coming months. David Mowat was one of a group of local businessman who helped to save Warrington Town from administration in 2007 and he remains a director at the club. David Mowat said: |
7th February 2012 Flood Defence Funding welcomedCommenting on the EA's announcement of funding for Flood Defences along the River Mersey near Westy, David Mowat said: "This funding, which I have personally lobbied for in Parliament, is excellent news for people living along the banks of the Mersey in Latchford. These areas have suffered from flooding in years gone by and it causes major disruption to homes and businesses. Sadly, experience from other areas suggests that many people do not have adequate insurance to protect them from flooding, so hopefully this work will keep insurance premiums down." |
| 6th February 2012 Mowat rips Labour U-turn on benefits cap
The cap would ensure that no one family could earn more than a total of £26,000 a year once all benefits have been taken into account. Disability Living Allowance and Working Tax Credits are excluded from the cap. Government figures suggest that this figure is roughly equivalent to a working family having a pre-tax annual income of around £35,000. David Mowat said: "Labour told us they wanted fairness and responsibility in the benefits system. They said that they supported the principle of a cap on benefits, but when they had the opportunity to put words into action, they bowed yet again to their Union paymasters. No one is going to believe their rhetoric on benefits any more as they have shown themselves to be out of touch and untrustworthy. "Last week MPs had a very simple question to answer: many families in places like Warrington have far lower incomes than £35,000, despite working long hours. Why should they be picking up the bill for other families to live in some of the poshest parts of London? Conservatives understand this and that's why we have put ourselves firmly on the side of ordinary people." |
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2nd February 2012 |
| 1st February 2012 The Independence Debate: who subsidises who? by David Mowat, MP for Warrington South As the date for a referendum becomes firmer the issue of "who subsidises who" will be bandied around as a political football. The SNP will claim that "the English have robbed Scotland of its oil and wasted the proceeds". English politicians will respond that the Barnett formula allocates around £5 billion a year more in public spending Scotland than would be the case if allocation was based on need. It is claimed that this Barnett over-allocation amounts to a subsidy from the English taxpayer. This subsidy, it is argued, allows Scotland to enjoy better public services such as free tuition fees, prescriptions and social care which the English cannot afford. So who is right and what are the facts? It is true that Scotland has receives more public spending per capita than the UK average. In broad terms this equates to about 20% per head more. Over the last 25 years this spending gap has resulted in Scotland receiving around £135 billion more than would have been the UK average. This amounts to about £1000 per person per year. But, the SNP are partially right, this is not a subsidy. That figure is roughly equal to the tax raised from Scotland's share of North Sea Oil over the same period: around £140 billion. The truth is that more or less every penny of Scotland's oil revenues has been, and is being, spent on better public services in Scotland. The Barnett formula can be seen for what it is: a mechanism to deliver to Scotland their share of oil revenues. So that's alright then, you might think. The arithmetic might not work exactly, but is it fair. But Policy makers need to consider the following:
Finally, what does all this mean for the referendum? The issue to be decided is far larger than mere pounds and pence. But money matters too: in financial terms, an independent Scotland would be betting that oil revenues will remain stable or increase over time so as to mitigate the effect of losing Barnett. That is quite a tough judgement to make. Either way it is time that both sides start dealing in facts not peddling assertions. |
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