Let’s try a thought experiment. Imagine that George Osborne were to stand up in the House of Commons and declare that, in order to avoid a new economic crisis, he had decided to raid our pension funds. The Treasury, he would say, had reluctantly concluded that it had no choice but to confiscate about £74 billion from what we’ve all been saving for our retirement. Furthermore, VAT would have to rise by another 2 per cent. The cash would be used to reduce the interest rates paid by Britain’s borrowers (his Government chief among them). And yes, he would add, it probably seems grossly unfair to transfer wealth from the thrifty to the profligate, but this is an emergency. The alternative is another banking crisis, or a new Great Depression.
If Mr Osborne did say all that, there would be uproar. The Chancellor would face unflattering comparisons with Robert Maxwell. Pensioners would be protesting outside Westminster, asking what right the Government had to steal their savings. The Institute for Fiscal Studies would publish graphs showing the “unfairness” of a VAT rise, since it would hit the poorest hardest.