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Occupational Pensions

I propose to stick with what I understand and, more importantly, with what my pensioner and employer constituents understand, namely, that it was a key factor of the Chancellor’s policy in 1997, as was made clear by the hon. Member for Coventry, North-West (Mr. Robinson), to levy a significant additional tax revenue out of the pension funds. We can argue about the number; the figure that most of us will stick with is £5 billion. The Paymaster General clearly thinks that it is more, because he has drawn the attention of the House to the fact that dividends have risen over the past 10 years, so £5 billion might be an underestimate. The key fact is that that money was previously flowing into the pension schemes, and now it no longer does so. The key questions when additional tax is being levied are: who pays the tax and what is the consequence of levying it? I shall go on to discuss that question in a moment, but I shall give way to the Paymaster General first.