§ Mr. Maurice Macmillanasked the Chancellor of the Exchequer if he will list the tax imposed by the European Community upon its retired officials at different levels of pension and the comparable tax paid by retired civil servants 313W at the equivalent rates of pension, both on the assumption that the pensioners concerned have no other source of income.
§ Mr. Robert SheldonDifferences in job grades, salaries and pension entitlements make it impossible to draw precise comparisons between the United Kingdom and the EEC in the treatment afforded by each of them to pensioners. However, an illustration of the impact of taxation by the EEC on the pensions of its former employees may be given by looking at the pension payable to a retired United Kingdom civil servant, converting the sterling amount into Belgian francs at current exchange rates, and computing the level of EEC tax chargeable. The table below does this for two representative grades of the United Kingdom Civil Service.
Pension United Kingdom tax as percentage of gross income EEC tax as percentage of gross income Principal 19.2 6.7 Assistant Secretary 23.5 7.2 Notes:
1. The calculations have been made on the basis of the level of pension payable to a former member of the United Kingdom Civil Service at (a) principal, and (b) assistant secretary level. It assumes in both cases that the individual retired on 31st March 1978, after 40 years service, and was at the top of the relevant pay scale, but ignores any pension increase which may be made in 1978–79 under the Pensions (Increase) Acts.
2. It is assumed the pensioner is a married man aged under 65 with no other income.
3. The EEC figures were obtained by converting the United Kingdom amounts into Belgian francs at the rate of £1 equals 59 B. francs: the bands of income chargeable at the various EEC rates were adjusted by the current corrective factor for EEC pensioners resident in the United Kingdom. The 10 per cent. expenses deduction from EEC tax given to pensioners and employees has been taken into account.
4. The United Kingdom tax is calculated at 1978–79 levels and takes into account the proposed Budget changes.