Minister side-steps question on the effect of abolishing the 10p tax rate on Dexion pensioners.

Hemel MP, Mike Penning, continued his fight for justice for the Dexion pensioners during Treasury Questions in the House of Commons yesterday. One group of Dexion pensioners who would have been taxed at the 10 per cent rate had they received their pensions over the past five years will now – because the 10 per cent rate has been abolished – be taxed at 20 per cent.

Mike called on Treasury Minister, Jane Kennedy, to make special arrangements to protect this group.

In her reply, the Minister side-stepped the question and offered only the dimmest ray of hope with the words “further work is being undertaken”.

Speaking afterwards, Mike said:

“It is outrageous that it is of the most needy groups of people who – through no fault of their own – now find themselves in this position. It is not their fault that the pension schemes they had relied on failed. Similarly, it is not their fault that the Government took five years to arrange compensation.

“They have had to fight all the way for this compensation and now – at the final hurdle – they face paying double the amount of tax than they would have paid if none of this had happened.

“From the Government’s point of view, it is a relatively small amount of money as it is only a small group of people. You would have thought the Government could do the decent thing and make a special case for them.

“I will not let this matter rest until we have an acceptable solution.”

Mike Penning (Hemel Hempstead) (Con): One group of people who are not included in the Minister’s figures are the workers with occupational pension schemes who had their pensions stolen from them five years ago. The Government have introduced a compensation package for them, five years on, but many pensioners on low incomes will now be taxed at 20p in the pound, not 10p in the pound, as they would have been if they had had their pensions five years ago. What are the Government going to do about this robbery of their pensions?

Jane Kennedy: That is rather excessive language, I think, coming from a party that dismantled the state earnings-related pension scheme, which was one of the greatest benefits to working people. As I said in my previous answer, precisely because we have been working hard to make sure that those who lose overall are compensated for the impact of the abolition of the 10p tax rate, further work is being undertaken and the Treasury Committee is taking forward its work.