Prime Minister Tony Blair and Leader of the Opposition William Hague clashed before this weeks budget over Labour taxation of dividends in pension funds.
In a stormy clash in the House of Commons during Prime Minister's Question time before the Chancellor rose to give his speech, Hague attacked the Government for slashing the Advanced Corporation Tax dividend relief on pension funds in 1997, a move that is worth roughly £5bn a year.
The Conservative leader claimed pension funds have been plundered by £17.4bn over the last four years and pledged if elected to refund dividend tax credits to 630,000 pension policyholders.
Slamming Labours pensions policy, Hague said despite the various announcements the Government might make to boost pensioners incomes, they have been guilty of raiding retirement savings over the last four years.
The Government made the move shortly after they took power in 1997. Tories considered it to be one of the 45 so-called stealth taxes introduced since Labour came to office.
Blair said: "The key point is whether the value of pension funds has actually risen."
In response to Hagues promise to reinstate the credit Blair said: “It's either unfair to pensioners or it's what we've said all along, their sums don't add up and they will take us back to boom and bust.”
Hague said: “Funds that belong to pensioners have been taken by the Government in stealth taxes….It is a good job the Chancellor is here to speak. We might get figures from the organ grinder that we can't get from the monkey.”