§ Mr. BluntTo ask the Chancellor of the Exchequer what steps he has taken to limit the impact on pension funds of the abolition of the advance corporation tax dividend tax credits. [88046]
§ Mr. Peter BottomleyTo ask the Chancellor of the Exchequer what assessment he has made of the effect on pensions of abolition of the advance corporation tax dividend tax credits. [88047]
§ Mr. RobathanTo ask the Chancellor of the Exchequer what estimate he has made of the effect on pensions of the abolition of the advance corporation tax dividend tax credits. [88028]
§ Dawn Primarolo[holding answer 5 July 1999]: Our package of corporation tax reforms included not only the abolition of payable tax credits, but also a 2–3 per cent. reduction in the rate of corporation tax. The overall effect on pension funds of these changes will vary depending upon factors like the type of scheme and the investment policy adopted. So it is not clear that steps are necessary to limit the impact on pension funds of the abolition of payable tax credits. But during 1997, when tax credits were available for only 6 months, the average British pension fund manager delivered an overall investment return of 16 per cent. and a real return of 12 per cent., which compared very favourably with an average return for the previous year of around 9 per cent.