Pension Raid Needs Explaining

The Government is challenging a demand for information about its decision to raid pension funds to the tune of £5 billion a year. Don't we have a right to know?

A couple of years ago, an enterprising person, decided to take advantage of the Freedom of Information Act by asking Gordon Brown what on earth he was thinking of when he launched his infamous annual £5 billion raid on Britain's pension funds.

Ten years ago, about five minutes after becoming Chancellor of the Exchequer, Mr Brown axed the 20 % dividend tax credit collected by pension funds. (Dividend income is one of the major contributors to capital growth of pension funds).

Since then we've seen many pension schemes hit problems or reach the verge of the collapse. Brown's tax change is at least partly -- perhaps wholly -- responsible. (You could also argue that irresponsible company boards played their part; many were happy to sanction "payment holidays" for pensions when businesses were prospering in the 90s.)

Anyway, whoever complained to the Information Commissioner under the Freedom of Information Act, also asked whether Gordon Brown considered phasing in his tax change in order to ease the pain, and to ensure that pension funds weren't suddenly left in the lurch. So far, the Treasury has refused to answer on the grounds that, under the law, it is exempt from the requirement to provide the relevant information because its decision related to 'the formulation or development of government policy'.

Section 35 of the Freedom of Information Act (2000) allows public bodies to deny access to information if they think the public really ought not to know the details. It's a case of whether the 'public interest' outweighs the necessity for certain government matters to be kept out of the public domain. National security is a prime example for obvious reasons.

However, in the case of Gordon Brown's pensions' raid, the Information Commissioner has decided that the public interest outweighs the Government's need to keep its decision-making process private and, last June, he ordered the Treasury to reveal all. The Treasury refused and is appealing against the decision at a tribunal next month.

Now, I don't know about you, but considering the impact on pension funds of the Chancellor's decision ten years ago, I'd quite like to know whether he thought it through properly back then. Like the person who complained to the Information Commissioner, I, too, have a couple of questions:

1) Was the Treasury wrong to abolish the dividend tax credit in the first place?

2) Was the Treasury wrong to abolish it in one fell swoop rather than phasing in a change?

These questions can't be answered unless the Treasury agrees to let us know more about its decision-making process all those years ago and it is currently refusing to do so. That's not on!