I’M NOT sure if Mr Best fully grasps the point of my letter about pensions.

Let me summarise in one sentence: people who are wealthy should not rely on other people to subsidise their lifestyles.

I say this as somebody who is fortunate enough to be wealthy, at least in income terms.

If Mr Best doesn’t want to supply figures to justify his argument about corporate tax avoidance, then I think he’s a little cheeky for asking me to do so for him! The amount avoided is estimated as anywhere between £40bn and £80bn per year – which is 40-80 per cent of our current annual budget deficit. I have often pointed out that a fair proportion of what we consider protections for the working poor – tax credits, minimum wage and housing benefit – actually act as subsidies for businesses. Tesco, for example, paid a little over £500m in corporation tax last year, while the value of tax credits received by its staff was nearly £350m. Many apparently profitable companies survive only because of taxpayer subsidy of their employees' earnings. So we are in agreement on the need for action.

However, I am also realistic about how long these things take. These companies can deploy armies of lawyers to drag things through the courts for years. In the meantime, we have to use our funds as best we can and preferably in ways that do not distort free markets. Bus passes, for example, have resulted in bus routes used by working people being axed. Tax credits and housing benefit have, perversely, made business owners, buy to let landlords – and yes, pensioners (who have benefited from house price growth) – richer, and everybody else poorer. As a libertarian, this is my principle objection to them.

Here’s an irony: tax avoidance ultimately benefits shareholders.

When pooled investments are taken into account, it is estimated that around 20 per cent of these shareholders are pension funds and another 20 per cent private individuals. Mr Best might wish to consider that action on tax avoidance might provide his free bus pass, but see his investments and pension reduce by 20 per cent.

On means testing, implementation is far simpler than Mr Best suggests. All you need to do is to work out the total cost of these benefits across the country, abolish them, and add the sum you’ve saved to the pension credit pot. Then, the poorer pensioners receive a little more. This is the principle of wealth redistribution and I do not understand why Mr Best objects.

If he believes that these entitlements should be left in place for all, regardless of wealth, would he also assist me in campaigning for the restoration of Child Benefit to my the Young family, who sadly earn enough that we no longer qualify? Or would he, like most readers (and I include myself in this) agree that people who are wealthier should lose unnecessary allowances so that taxpayer money can be targeted to where it is most needed?

James Young
Millspring
Friar Waddon Road
Upwey
Weymouth