HC Deb 13 May 1999 vol 331 cc412-3
11. Mr. Edward Davey (Kingston and Surbiton)

If he will review his policy to abolish dividend tax credits for people with incomes below the level of the personal income tax allowance. [83199]

The Paymaster General (Dawn Primarolo)

No. We will not be reviewing the decision.

Mr. Davey

That answer was, unfortunately, not surprising. May I tell the hon. Lady that she should be reviewing the decision? Will she consider talking to her predecessor, who at least appeared to show some sympathy for the hundreds of thousands of pensioners who will be hit by the policy? Will she consider meeting an all-party delegation of hon. Members who have expressed concern about the matter and want to see the poorest pensioners protected from this tax increase?

Dawn Primarolo

The Government's record on helping poor pensioners is clear. The proposals in the Budget contained the winter fuel allowance and the minimum income guarantee. The minimum tax guarantee was also introduced. The question of helping poor pensioners has been discussed extensively in the House over nearly two years, and the hon. Gentleman will know the reasons for the reform. He should stop trying to make spending commitments, but should support the Government in ensuring that policies concentrate on the poorest pensioners.

Mr. Geoffrey Clifton-Brown (Cotswold)

Why do the Government insist on hitting those of our poorest pensioners who have a small amount of savings? The Government are not content with abolishing dividend tax credit for those pensioners who are below the personal allowance threshold and therefore did not pay any tax at all. That was a mean-minded measure, but now they have introduced another—the highly spun 10p tax rate, which will not apply to pensioners with savings. Why is that?

Dawn Primarolo

As the hon. Gentleman knows, savings are dealt with very fairly in the tax system. The introduction of the lop tax rate will benefit those pensioners who pay tax on their income. As a result of the Government's proposals, only about one third of pensioners will now pay tax. The hon. Gentleman knows full well that the Budget proposals, and especially the winter fuel allowance, did a great deal to help pensioners.