§ Mr. Marlowasked the Minister for the Civil Service, as recipients of index-linked pensions will benefit from any cuts in direct taxation, if he will make an adjustment in the indexing arrangements so that they do not also benefit a second time 289W through the effects of increased indirect taxation on the retail price index.
§ Mr. ChannonIt would be difficult to alter the arrangements for index-linked pensions with each change in the rates of income tax. Moreover, such changes will affect pensioners in very different ways depending on their individual financial circumstances. There are, for example, many receiving small pensions who pay no income tax and they would suffer a decline in living standards if such a change was made. Under the circumstances I do not think it would be practical to make the change my hon. Friend has in mind. Such a course would in any case require legislation.