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Occupational Pensions

Being a socialist, I am a compassionate sort, and I think that Labour Members have been unduly hard on the Conservatives. My right hon. Friend the Chancellor and my hon. Friend the Member for Coventry, North-West (Mr. Robinson), the former Paymaster General, were very mean to the former Chancellor, the right hon. and learned Member for Rushcliffe (Mr. Clarke), and to the shadow Chancellor. The Conservatives should be congratulated—not only those on the Front Bench, but those in the serried ranks of their predecessor generations, of whom there have been rather a lot in the past 10 years—on the only successful piece of guerrilla politics in what has otherwise been a sterile, acrid, wasted decade of opposition. Opposition day debates on spurious subjects and specious axioms are nothing new—indeed, they are the very stuff of these afternoons. It is unbelievable that we are having this debate today, 10 years on, and we can only look forward to the rest of the series of retro-debates. Perhaps next week we could have one on the calamitous independence of the Bank of England and the consequent interest rate crisis, on the disastrous introduction of a national minimum wage and the consequent inflation shock, or on the disgraceful cuts in corporation taxes which accompanied the removal of the pension fund dividend subsidy, thereby causing a sharp, immediately discernible and outrageous rise in investment. Or, with a slightly different flavour, we could debate the consistent reduction of the dividend subsidy by successive Tory chancellors—a gradual phasing out of this market distortion, catastrophically prefiguring its eventual, extremely successful, removal by the Labour Government in 1997. When the removal of a subsidy becomes a smash-and-grab raid, we really are in the world of doublespeak and upside-down-think. Even ““credit? is a misnomer when the institutions in question do not pay tax. This was a subsidy, and one that was widely understood to have serious, long-term, structural, negative effects on the level of investment in the economy. Everybody knew that. We knew it when I worked in the global HQ of a FTSE top 10 company in the early 1990s. The dividend was deleterious, but there was no choice because of the tax regime and because of the expectations that it created in the City. Even the Tories knew that perfectly well. Even Norman Lamont, advised by the right hon. Member for Witney (Mr. Cameron), knew it. That is why he said exactly that when he cut the subsidy for the fifth time in 1993.