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's 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's 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.”