The wages of stealth

A stealth tax, by definition, is one in which political pain is deferred in return for immediate gain. The Chancellor who imposes such a tax effectively mortgages his credibility and the public’s trust in him. But, sooner or later, as Gordon Brown is discovering, the day of reckoning arrives — in Mr Brown’s case, at the worst possible moment, as he prepares to enter No. 10, and to fend off a serious challenge for the Labour leadership.

Thanks to dogged Freedom of Information inquiries by the Times, we now know that Mr Brown was warned by his Treasury officials in 1997 that his decision to abolish dividend tax credits for pension funds would provoke ‘clamour and public consternation…. Ministers’ postbags will be pretty full.’ It was not intrinsically improper of the Chancellor to ignore this guidance: ‘advisers advise, ministers decide’, as Margaret Thatcher said. What sticks in the craw is the pretence that ministers had no reason to think that our pensions were in jeopardy.