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| BankruptcyNews |
Posted - 02 April 2007 : 09:58:14
Pensions row: CBI denies backing Brown's cuts
The row over the government's pensions policy deepened yesterday as business leaders dismissed ministers' claims that they had lobbied for Gordon Brown's controversial tax changes in 1997.
Documents released under the Freedom of Information Act late on Friday showed that the chancellor was warned about his plans to remove a key tax benefit enjoyed by pension funds in his first budget. Civil servants warned that the cuts could lead to the closure of many occupational pension schemes.
Mr Brown's decision to cut tax relief on company dividends has in part led to the number of people in final salary schemes falling from 11 million in 1997 to 4 million. The revelations have led to a political outcry, with the Tory leader, David Cameron, calling for an independent inquiry.
Ministers insisted at the weekend that the employers' body, the CBI, had been in favour of the move. They said the business community had agreed that the tax break discouraged long-term investment.
But the CBI director general, Richard Lambert, said: "This is a convenient bit of spin by the Treasury. There is no record of any kind that we lobbied for [cuts in tax relief], and there is no record because we objected strenuously to the policy." He said the cut in dividend tax relief was a contributory factor in the collapse of many final salary pension schemes.
Ministers were sticking to that defence yesterday. John Hutton, the work and pensions secretary, said there had been "a consensus then that these were the right changes to make". He told ITV's Sunday Edition: "British business was urging these changes to be made and the clear view from the Treasury, in these papers, was that these would be in the long-term best interests of British pensioners."
The official papers revealed that civil servants believed that many companies could be forced into insolvency if they attempted to meet their obligations after the tax break was withdrawn.
The shadow chancellor, George Osborne, said he planned to hold a special Commons debate on the issue. "Gordon Brown should be asked to account for his actions and his subsequent denials that his decision in 1997 resulted in the current crisis in our pension system," he said.
Source: Guardian.co.uk
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| atpgirl |
Posted - 06 June 2008 : 11:52:18
I thought it was the governments job to take care of it's citizens not rob them dry of money. They are taking money away from the wrong sectors and putting it into their budget that is going WHO KNOWS WHERE! |
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