HC Deb 18 July 1979 vol 970 cc1775-6
70. Mr. Bruce-Gardyne

asked the Minister for the Civil Service what value is attributed to the entitlement to tax-free retirement bonuses linked to the value of the index-linked pension in the assessment of comparability for the purposes of Civil Service pay awards.

Mr. Channon

The pay research process is concerned with the differences between the total superannuation benefits of civil servants and of those in comparable employments. No specific value is, therefore, attributed to the lump sum retirement benefit, which is, in any case, a common feature of occupational pension schemes.

Mr. Bruce-Gardyne

That is a surprising reply. Can my hon. Friend recall off- hand any private company that would be allowed by the Inland Revenue to pay £35,000 free of tax to a retiring employee who, no doubt, would go off to take supernumerary employment as chairman of the Midland Bank or some such emporium? Are there any examples in the private sector that compare with this?

Mr. Channon

I am advised that this scheme follows the rules which many occupational pension schemes in both the public and private sectors follow. Indeed, under this scheme, employees are permitted to obtain a lump sum not exceeding in value three-eightieths of final remuneration for each year in service. That is not dissimilar from many schemes in both the public and private sectors. Taxation is a matter for my right hon. and learned Friend the Chancellor of the Exchequer and is laid down under the Inland Revenue rules.