My colleagues and I have frequent contact with Treasury Ministers on a range of issues, including pensions. Together, we are working to encourage pension savings through, for example, the pension reforms in the Pensions Bill that will be considered by the House tomorrow.
Government tax policy has cost pension funds £5 billion every year since 1997, as well as the growth that would have been realised had that money remained invested. Actuaries estimate that in the long term, the sum could reach £100 billion—a sum that might sound rather familiar by the end of this afternoon’s pre-Budget report. Will the Minister acknowledge that that tax policy has had a devastating effect on pension funds and their contributors?
As I am sure the hon. Lady knows, the changes regarding tax credits payable on dividends were made because there was an incentive for companies to pay dividends rather than reinvest in their future through investment in plant and machinery, for example. The changes were part of a package that included the reduction of corporation tax from 33 to 31 per cent. What made the real difference for pension funds and what was in them were the poor stock market conditions that followed.
The actions that we have taken to support the pensions industry, including the measures in the Pensions Bill, will improve the position of pensions saving in this country. That message has been built up following the Turner commission and through political consensus on the need to ensure that pensions saving is improved.