UK - Documents released by the UK Treasury late last week show Gordon Brown had received prior warning from Treasury advisers of the devastating effect his 1997 removal of the tax credits for corporate pension funds would have.
The removal of the tax credits on dividends in 1997 was among Brown’s first major changes as chancellor and came at a time when many large corporate schemes still enjoyed a huge surplus in funding and there was no sign of the stock markets ending their bull run.
However, it has since been blamed, along with increased longevity and the stock market collapse in 2000, for many of the ills currently afflicting UK pension schemes.
According to the released papers, Treasury advisers warned Brown that removing the tax credits would lead to “a big hole in pension scheme finances” and “actuarial deficit”.
Independent pensions consultant, Ros Altmann, commented: “Gordon Brown must accept responsibility for the pension losses of those whose final salary schemes have failed since 1997.
“It seems that from the moment he became chancellor he set about the emasculation of UK pension funds and ignored warnings that his actions could undermine pension scheme finances."
She added: “I have no doubt that Gordon Brown will go down in history as the one who presided over the destruction of our once-thriving pension system.”
The opposition Conservative Party has called for a debate in the House of Commons after the Easter recess to “ensure Gordon Brown fully explains his decision to defy official advice over the cost to pension funds of the tax reforms”.
Shadow chancellor George Osborne said: “It is time Gordon Brown faced the music for the damage he’s done to British pensions.”
Shadow work and pensions secretary Philip Hammond commented: “Gordon Brown has shattered millions of dreams of hard-working people who toil all their lives for a decent retirement.
“The documents he sneaked out late on Friday night show this was no accident, Gordon Brown knew the consequences of his actions.”
The move to release the controversial papers came after a two-year campaign by UK newspaper, The Times, to force the Treasury to release the advice under the freedom of information act.
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