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Age-related Personal Allowances

Volume 543: debated on Wednesday 18 April 2012

5. How many people in Scotland will be affected by the Chancellor of the Exchequer’s proposal to withdraw the additional personal allowance for people over 65 years of age. (102890)

9. How many pensioners in Scotland will be affected by the Chancellor of the Exchequer’s decision on age-related personal allowances. (102894)

10. How many pensioners in Scotland will be affected by the Chancellor of the Exchequer’s decision on age-related personal allowances. (102895)

13. How many pensioners in Scotland will be affected by the Chancellor of the Exchequer’s decision on age-related personal allowances. (102898)

Will the Government not admit that the figures do not reveal the fact that this is an attack on people who have put away money for their retirement? The amount involved is up to £30,000 a year. This is an attack on middle-class people. There is also an attack on single people, who will lose income through being hit by the bedroom tax. People cannot be elderly and they cannot be single—and it would appear they cannot be hungry either, as there is a tax on fish and chips.

It will not surprise the hon. Gentleman that I do not accept his analysis. He and others who scaremonger on this issue fail to point out that more than half of those in Scotland aged over 65 will not pay any tax at all.

Is the Minister not ashamed of his Government’s decision to reduce tax for the wealthiest Scots while at the same time penalising pensioners with a tax grab, whereby they will lose up to £322 per annum?

I know that the hon. Gentleman was not a Member of this Parliament for most of the 13 years of the last Labour Government, but most of his colleagues from Scotland were, and I did not hear them calling at that time for an increase in the higher rate of income tax. He is wrong to say that there will be losers in relation to the age-related allowances; there will be no cash losers.

If, as the Government say, this measure is about fairness and simplification, why did they not wait until the full £10,000 personal allowance was in place before imposing this stealth tax on pensioners?

I acknowledge that the hon. Lady is well known for speaking up both for the low-paid and for those on the minimum wage. That is why I would have thought that she would have welcomed the fact that the Government are raising the personal allowance to £10,000 during this course of this Parliament. [Interruption.]

Order. There are a lot of noisy private conversations taking place in the Chamber. I would like to hear the questions and the answers.

What does it say about the priorities of this Government that they impose a granny tax on 367,000 Scots while giving a tax cut to the wealthiest 14,000 Scots?

What the hon. Gentleman and his colleagues fail to acknowledge is that this Government have delivered the largest pension rise in the last 30 years, whereas the last Government, which his party led, introduced a pension rise of 75p, so we are not going to take any lectures from Labour on the treatment of pensioners in Scotland.

Just how out of touch are this Government if they think that it is right or fair that almost 400,000 Scottish pensioners should pay on average £83 a year more in tax from next April just so that 16,000 top-rate taxpayers receive a tax cut of £10,000 a year on average? People retiring next April will face an annual tax hike of £322 a year because of the granny tax and the ending of the savings credit in 2017, on top of higher VAT and cuts in winter fuel allowance introduced by this Chancellor. With a record in government like that, surely it is no surprise to the Minister that Tory election strategists are gloomy about winning any seats at all in Scotland at the next general election.

What I think is fair is that half of pensioners over 65 in Scotland will not pay any tax at all; that those earning less than £10,000 will, by the end of this Parliament, be subject to a personal allowance of £10,000; and that this Government have delivered the largest increase in the pension—£270 compared with the 75p offered by the previous Government.

Those pension increases will, of course, be wiped out by this tax grab. People living on modest pension incomes have already paid a very high price for the financial crisis. They have lost the value of their savings and investments, and they are having to face inflation and extremely low interest rates. How can the Minister justify this tax grab on pensioners while taxes are being cut for millionaires?

I am afraid that I am not going to accept any lectures on economics from the hon. Lady. She is offering pensioners in Scotland the prospect of breaking up the United Kingdom, with no certainty as to where pension funding would come from.