The liked lump N o Green Paper, no reform, so the
pension funds seem to have escaped, lump sums and all. The Chancellor called those lumps and their tax treatment 'ano- malous but much-loved', and you can see why they are both. Employers get tax relief on the cost of providing them, but em- ployees pay no tax when they get them. That really is a Negative Income Tax. The two great exceptions to the rule that all savings should be equal before the taxman are the pension funds and home own- ership. Take those exceptions away, and you bring another £30,000 million of In- come into tax — and what couldn't you cut with an axe of that size? But the Prime Minister has declared the home-owner's mortgage tax relief to be a protected territory. The most that can happen is that inflation and the £30,000 upper limit Will erode its worth. Are pension funds now a protected territory, too? The Chancellor says that he has no Green Paper in his mind. It is a powerful capacious mind, when he is allowed to keep it open.
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