Finance (No. 2) Bill

Part of Bill Presented – in the House of Commons at 1:36 pm on 1st April 2014.

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Photo of Danny Alexander Danny Alexander The Chief Secretary to the Treasury 1:36 pm, 1st April 2014

It is a long-established principle that there should be tax relief on pension contributions. This Government have sought to restrict that tax relief. We have lowered both the lifetime limit and the annual limit. I am not sure whether the Opposition’s proposal has taken into account the changes that we have made. I am not convinced that changing the rate of relief would alter very much the amount of money spent, because of the lower limits that we have already imposed. Speaking for myself—this is a matter that my party will be putting forward at the next election—the fact that we offer about £35 billion of relief on pension contributions every year and that more than half of that tax relief goes to the top 10% of earners is something that is worth further examination. As we continue with fiscal consolidation, which is necessary for our economy, we need to make absolutely sure that we are handling our tax system in as fair a way as possible, and not offering unnecessary tax relief to the very wealthiest in society.