In just over couple of months insurance premium tax (IPT) will rise again in a further attack on people who take responsibility for their lives and possessions.
From a basic rate of 6 per cent less than a year and half ago, the rate will have doubled to 12 per cent in June this year.
This illogical and punitive tax rise treats insurance as a luxury whereas in many cases it is either essential or a foundation of self-reliance.
Home insurance is not a luxury, yet if premiums carry on rising then surely less well-off home-owners and tenants will be tempted to skimp or cancel policies altogether.In the case of car insurance, 26.5m drivers will pay more. It is not unreasonable to speculate that more people will try to dodge insurance as a result of the heavy increases.
Home insurance is not a luxury, yet if premiums carry on rising, driven in part by these IPT increases, then surely less well-off home-owners and tenants will be tempted to skimp or cancel policies altogether.
Of course there are exemptions including life insurance. But look closely at the list and you begin to feel that somebody or some group of people have made intriguing value judgments.
Why is mortgage insurance, which is exempt from IPT, deemed to be more important than household insurance?
Surely the consequences of your home burning down or being stripped by burglars are as bad as being unable to afford your mortgage payments through loss of a job?
Why is spacecraft insurance exempt yet motorists must pay?
Why must individuals pay 20 per cent on travel insurance – which includes cover for their possession in transit – yet businesses pay nothing on goods in international transit?
Those who buy medical insurance are charged 12 per cent. Yet surely by taking responsibility for the costs of some of their own healthcare they are relieving the burden on the NHS. This used to be recognised in the form of tax relief on premiums for pensioners, but now it is treated as if it were a social ill.
The Institute of Economic Affairs has pointed out that employers get better incentives for caring for their plant and machinery than they do for caring for employees.
A company that buys insurance to protect machinery can write the cost off as a business expense. But if the same company buys private medical care for its employees it must pay employer National Insurance on the costs of the insurance as well as IPT.
It is a sad reflection on the moral position of a government when self-reliance is regarded as a source of taxation rather than a cause for support and celebration.
Poor unloved Lisa
Lisa must be the most unloved financial product any government has devised.
Tessas, Peps and Isas went with a bang as savers and investors lined up and the industry competed for funds.
But poor Lisa seems completely unwanted by most in the industry, partly due to fears of mis-selling claims years down the line.
Lisa will now come with strong risk warnings of the dangers of opting for Lisa over a workplace pension.
It actually offers some fantastic benefits to youngsters who want to save for a home valued at less than £450,000. The 25 per cent bonus is far more than they could earn in a bank or building society. And the option to take the whole fund tax-free at age 60 beats anything pensions can offer to the self-employed.
Having said that, the penalties for early withdrawals are onerous.
I cannot help feeling the industry’s rejection of Lisa has far more to do with self-interest than consumer protection.
Joint bank account woes
I have for some months been dealing with the case of a woman who opened a joint bank account with her ex-husband in 1999 because he had no banking record.
She tells me it was used solely for his wages and outgoings.
He left her a couple of years ago, but the bank refuses to remove her from the account.
It has now been frozen, but there is a £4,000 overdraft and various other loans and credit cards in joint names have left her £40,000 in debt.
I have so many similar cases that have led me to conclude that there should be far greater safeguards when setting up joint accounts and taking joint loans even between marriage partners.
Banks should be forced to spell out in clear detail the onerous responsibilities being taken on by both parties.
It should also be made clear how difficult it can be to disentangle yourself from such affairs.
As things stand it is far too simple to take out financial liabilities in joint names with just a bit of cursory paper signing.
Tony Hazell writes for the Daily Mail's Money Mail section
