Tories attack government over pensions tax
The Tories have renewed their attacks on the 'great pensions tax' following figures they claimed show shares are 2% lower than when Advance Corporation Tax refunds were abolished.
Conservative business manager Eric Forth, acting amidst a mounting pensions crisis over the value of personal pension funds and growing evidence of employers restricting access to or closing final salary schemes, raised the issue with Commons leader Robin Cook.
This after Tory leader Iain Duncan Smith reminded Tony Blair during prime minister’s Question Time that his government had claimed ‘the tax on pension funds’ was justified because of the buoyancy of the stock market, which was £300m down over just one year.
Duncan Smith claimed someone Blair’s age would have to work four years longer to receive his pension.
But the prime minister countered, saying it was ‘absurd to say the chancellor should be responsible for the fall in the stock market’ when it was 2% down over five years ago.
During a later Treasury Questions session shadow chancellor Michael Howard joined in the concerted attack, asking if Brown remains ‘proud of the £5bn a year tax hit that was imposed on pension funds’ in 1997.
In response chief secretary Paul Boateng said it was absurd to describe a tax change designed to maintain stability as a stealth tax or a raid on pensions.