Tories Turn Up Heat On Brown Over Pension Tax Grab

by Robert Lee, Tax-News.com, London

03 April 2007

The opposition Conservative Party has called for the government to be investigated by an independent enquiry after it emerged that Chancellor of the Exchequer Gordon Brown went against the advice of Treasury officials ten years ago and scrapped pension tax relief.

Shadow Work and Pensions Secretary Philip Hammond wants the Government Actuary to probe the actual cost of the Chancellor's 1997 decision to scrap tax relief on pension funds, after reports suggested that Brown was advised by his own Treasury officials of the damaging impact of the move.

Shadow Chancellor George Osborne has joined Hammond in demanding a full Commons statement from Brown, explaining why he pressed ahead with the raid on pension funds - which may have netted the Treasury up to GBP100 billion in the past decade - in the face of official advice.

"Gordon Brown must explain why he acted in defiance of his top civil servants who warned that his tax reforms would cost pension funds billions, leaving a black hole in many of them," said Hammond. "The Chancellor has effectively concealed information surrounding these plans from Parliament for the last ten years. The extent of disregard he has shown towards pensioners, past and present, is unbelievable."

"The Chancellor's been telling us for the last ten years these tax changes didn't have a negative effect on pensions funds. The documents now prove this is not true," he added. "An independent inquiry by the Government Actuary into the total cost of this stealth tax to Britain's pensions funds is urgently required."

With the Conservatives now planning to stage a special House of Commons debate on the issue once Parliament returns following the Easter recess, Osborne said: "It is time Gordon Brown faced the music for the damage he's done to British pensions."

The Shadow Chancellor continued: "We now know he was told all along about the devastating impact his tax would have on hard pressed savers. Now he will face the dilemma: does he finally turn up and account for himself on the floor of the House of Commons where he must tell the truth or does he run and hide? Has Gordon Brown got the courage to defend his own disastrous policy?"

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