Dave don't got no clue (7)

From today's Telegraph:

"David Cameron says that savers are the "forgotten victims" of the financial crisis and pledges to help them if the Conservatives win the next general election."

A good start. I don't like the use of the word "help" as a euphemism for "give money", but hey. And how is he going to do this? By de-nationalising banks and allowing them to set their own interest rates again, perhaps?

Nope.

The campaign calls on the Treasury to suspend all taxes on the interest pensioners earn on their savings and on the cash dividends they are paid on their shares.

OK, there should be no tax on dividend income at all*, as companies pay plenty enough tax at source, but what's the point of the first bit? Even ignoring the fact that there are plenty of savers who aren't pensioners, what's better; a sensible interest rate, let's say 5% with 20% income tax deducted (net 4%), or a laughable 3% tax free? If I had a spare elderly relative**, what's to stop me lending them a wodge of cash so that they can earn the interest tax free and hand it back to me?

Ah, of course. This is treble-pandering to the same constituency; Dave knows that eighty per cent of pensioners are home-owners, and he is probably thick enough to think that keeping interest rates artificially low will boost house prices (so that rules out calling for interest rate hikes), so instead he offers them a very modest tax break; the other twenty per cent of pensioners are council tenants and they probably don't have much taxable income so they're not bothered.

If he seriously wanted to do something specifically for pensioners, he could of course suggest introducing a Citizen's Pension, but that's too obvious, I suppose.

* I am sure that for most pensioners there's no tax on dividend income anyway, as long as their total income does not fall into the band which reduces the age-related personal allowance and is not over the higher rate tax threshhold of £42,000-odd. In the former case, it is then only notional and not actual tax that is paid, but that's just details.

** Provided that the value of their home plus the cash I lend them is less than the nil-rate band for Inheritance Tax, of course, I wouldn't want to pay 40% Inheritance Tax on getting my own money back.