Finance (No. 4) Bill

Debate between Rachel Reeves and Ian Swales

Thursday 19th April 2012 Commons Chamber

[Rachel Reeves]

I know that my hon. Friend sticks up for pensioners in his constituency, unlike Government Members, who want to grab the incomes of pensioners in their constituencies.

My hon. Friend points out the evidence that we have commissioned from the House of Commons Library, which shows that a small personal or occupational pension of just £67 a week, or little more than £3,000 a year, would be enough to put someone in the firing line of the additional tax. People with such pensions are not the privileged few, living a life of luxury in retirement. The measure will hit millions of people who have worked hard in ordinary jobs and managed to set aside just enough to give them a small pension that relieves them of reliance on means-tested benefits and allows them to have some security in retirement.

[Ian Swales (Redcar) (LD)]

Can the hon. Lady tell the Committee how much tax somebody getting an occupational pension of £67 a week would pay under the new arrangements?

[Rachel Reeves]

If they were being taxed at 20%, that would mean tax of about £13 a week on their pension. Such pensioners will be hit hard by the changes.

We know how hard it already is for many people to save enough for a modest pension, so why have the Government picked on pensioners to pay more? As the chief executive of Saga has put it:

“Amid all the talk of tax cuts…the main tax-raising measure”

in the Budget

“consisted of a stealth tax increase on older people who did actually work and save hard for their future.”

Gransnet has warned that

“this tax change offers no incentive to save”,

and the National Association of Pension Funds has stated that it will

“come as a blow to millions of pensioners who have paid in to the tax system throughout their working lives. Pensioners with modest amounts of pension saving stand to be the biggest losers.”

Let us be clear that the change will hit people with small pensions who have made sacrifices to save and are now being penalised for doing the right thing.

Amendment of the Law

Debate between Rachel Reeves and Ian Swales

Monday 26th March 2012 Commons Chamber

[Rachel Reeves]

I agree. These are hard times for the charitable sector, and the VAT increase has hit it hard. That is one of the many reasons why charities, as well as ordinary families and businesses, would benefit from a reduction in VAT to 17.5% until the economy recovers. Charities are also affected by changes in tax allowances, and many have expressed fears that that will also create a big black hole.

[Ian Swales]

VAT cuts most benefit those who spend the most. Does the hon. Lady think that now is the right time to propose a policy under which the biggest winners would be pop stars, bankers and premiership footballers?