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Occupational Pensions

No. I shall get on with my speech and take some interventions later. The Chancellor and the man who is now Economic Secretary dropped their tax bombshell onto the laps of Treasury civil servants the day after the 1997 general election. Their advice was clear, and we know the truth thanks to the two-year campaign undertaken by The Times. I congratulate that newspaper on its efforts, which it maintained despite the costs incurred. The Chancellor should be condemned for his efforts to stop that campaign. Indeed, I hope that he will be able to confirm something that a member of the Government told me privately yesterday—[Interruption.] I can tell the House that someone in my job gets quite a lot of advice about the Chancellor from members of the Government. Yesterday, I was told that the documents were finally released only because the Permanent Secretary to the Treasury refused to go on funding the legal costs involved in blocking their release.[ Hon. Members: ““Oh!?] As I said, I hear many stories from Labour Members about the Chancellor. When the right hon. Gentleman responds to the debate, perhaps he will confirm the truth of that story. In the end, the Chancellor was forced to release the documents. However, he did so very late on the Friday afternoon after the House had begun its Easter recess. The Government have made a habit of burying bad news, but that was one of their shabbiest attempts, and I am pleased to say that it failed spectacularly. We can now see the Treasury advice, and understand why the Chancellor was so desperate to conceal it from the public. In its submissions to the Chancellor in May and June 1997, the Inland Revenue warned that"““abolishing tax credits would make a big hole in pension scheme finances?" and that"““the change would lead to a reduction in pension benefits for the lower paid?—" the same people whom he had just hit with his Budget. The Revenue also told the Chancellor that"““any loss of pension could be difficult for someone on a small income to cope with?," and it advised him that"““everyone in a money purchase scheme is a potential loser.?" Officials at the Inland Revenue ended up by saying that they did not imagine that the Chancellor would want them"““to consult the DSS before Budget Day.?" On that note, may I welcome the Secretary of State for Work and Pensions, whose private views about the Chancellor are now so public? Of course, when Labour Members listened to the Chancellor make his 1997 Budget speech at the Dispatch Box, none of them could have guessed that when he promised to undertake a long-needed reform of company taxation to encourage investment, he meant that he was about to clobber their pensions with a stealth tax worth £5 billion a year. That first Budget speech established the reputation for stealth and dishonesty that all the right hon. Gentleman’s subsequent 10 Budget speeches have lived up to, and none more so than the con trick that he delivered a month ago.