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Blair and Hague in clash over pension fund raid

Tony Blair and William Hague locked horns before the Budget over Labour taxation of dividends in pension funds.

In a stormy clash in the Commons during Prime Minister&#39s Question Time, Hague attacked the Government for slashing the adv-ance corporation tax dividend relief on pension funds in 1997, a move that is worth around £5bn a year.

The Conservative leader claimed that pension funds have been plundered by £17.4bn since the change and pledged, if elected, to refund dividend tax credits to 630,000 pension policyholders.

The Tories consider it is one of the 45 so-called stealth taxes introduced since Labour came to office.

Blair argued that the key point was that the value of pension funds had risen.

In response to Hague&#39s promise to reinstate the credit, Blair said: “It is either unfair to pensioners or it is what we have said all along – their sums do not 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.”

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