UK - The Treasury will be reported to the parliamentary ombudsman if it fails to disclose the cost of withdrawing dividend tax credits from pension funds in 1997.
Lord Oakeshott, a Liberal Democrat spokesman in the Lords, has sent a formal complaint to the Treasury’s permanent secretary Gus O’Donnell under the Code of Practice on Access to Government Information.
Lord Oakeshott claims he was refused a “proper answer” to a written parliamentary question. The Treasury has 20 days to produce an answer to avoid being reported to the parliamentary ombudsman.
In the letter Lord Oakeshott said: “If the Treasury can estimate in advance the effect of major tax changes such as this, it must equally be able to estimate afterwards what the outcome has been.”
He added: “The cost of preparing the answer can hardly be excessive in relation to an estimated effective tax increase on pension funds of over £5bn a year.”
This complaint comes a week after Watson Wyatt said that pension fund finances had crumbled with company FRS17 deficits soaring to a combined total of £150bn, which both the Conservatives and Liberal Democrats partly blame on the scrapping of the tax credit.
*Lord Oakeshott has also criticised the Lord Chancellor’s pension arrangements.
He pointed out that from the moment the Lord Chancellor was appointed he became entitled to an index-linked pension of £90,000 a year for life in addition to a widow’s pension and a tax-free lump sum of £180,000 – a package worth a capital value of around £2m.
Oakeshott said: “Why should the Lord Chancellor get this golden hello on day one, rather than year by year?
“Lord Irvine opposes elected members in the House of Lord because they may require ‘financial benefits’. He should give up some of his own.”
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