The decision to raid pension funds was the brainchild of a close-knit group of advisers known as “the hotel group”.
Before Gordon Brown became Chancellor, and for 18 months afterwards, all the key decisions were taken in the Park Lane apartment of Geoffrey Robinson, the multi-millionaire Labour MP and treasury minister, rather than in Whitehall.
Mr Brown, Ed Balls, his political adviser, and Charlie Whelan, his voluble and abrasive press spokesman, would gather to plan their policies.
They were a gang of chums, who drank beer and watched football matches on television, as they planned to seize control of the Treasury and introduce sweeping tax changes to fund Mr Brown’s ambitious plans for social engineering.Mr Brown, who had no ministerial experience before taking the second most powerful job in government, distrusted the Treasury mandarins, particularly the then permanent secretary, Sir Terry Burns.
Sir Terry and other key officials were kept out of the loop. So it is little wonder that Mr Brown brushed aside uncomfortable advice from civil servants on the problems in the pension tax changes – he no doubt saw them as part of the establishment seeking to frustrate his ambitious reform programme.
Labour came to power in 1997 claiming it had no need to raise taxes – and even promised not to increase the basic or top rate of income tax.
So Mr Brown needed to find ways of raising extra money in ways that were not immediately noticeable to middle income voters who had switched from the Tories to New Labour
The key figure was Mr Robinson, who had helped fund Mr Brown’s office in opposition. He knew his way around the corporate tax system. He provided more than £200,000 to pay for the specialist advice Mr Brown needed for formulating his tax policies.
New Labour cabal behind the decision