Pensioners' Incomes (Hansard, 12 March 1992)

§ 7. Mr. Jacques Arnold
To ask the Chancellor of the Exchequer if he will make a statement on the impact of tax on pensioners' incomes.

§ Mr. Maples
About three quarters of pensioners will pay no income tax at all in 1992–93. The rest will gain up to £3.37 a week from the new lower rate and increases in allowances announced in my right hon. Friend's Budget.

§ Mr. Arnold
My hon. Friend will know that many pensioners are very worried by Labour's taxation proposals. Will he quantify the pensioners who will be helped by the reduction in the first rate band to 20 per cent. and tell us how many pensioners in receipt of income support will benefit from the further increases announced last Tuesday?

§ Mr. Maples
My hon. Friend makes an interesting point. Among the 4 million people who will have a marginal rate of income tax of 20p in the pound are 1,330,000 pensioners, for whom the Labour party apparently plans to raise taxes from 20p to 25p in the pound. The total number of people helped by the measures in the Budget, through the increases in income support payments for pensioners and the ancillary benefits that go with that, is 5 million.

§ Ms. Armstrong
Pensioners continue to have to pay the 17.5 per cent. levied on value added tax last year. What would the Minister say to the constituent who came to my surgery last week, bewildered by the fact that the Government, having raised VAT for the specific purpose of paying for the poll tax bribe last year, are not proposing to reduce it to 15 per cent. as they are not reducing the poll tax again this year? Why are not the Government reducing VAT?

§ Mr. Maples
VAT was raised last year for the specific purpose of reducing everyone's community charge by £140. The idea that the Budget does nothing for pensioners is absolutely ludicrous. It reduces the marginal tax rate for 1.33 million and increases benefits for 5 million. While the Conservatives have been in office, the real incomes of pensioners have risen faster than those of people in work. If the hon. Lady does not believe me, perhaps she will believe the director of Help the Aged, who said: It is a positive Budget that will make a positive difference to older people.