Brown facing no-confidence debate

Mr Brown will respond to his critics in the Commons

The Conservatives are set to call for a vote of no confidence in Chancellor Gordon Brown over his 1997 decision to scrap tax relief on pension funds.Shadow chancellor George Osborne has called his party’s Commons motion a test of whether Mr Brown has the “political courage to apologise”.

It is highly unusual for opposition parties to call for votes of no confidence on individual ministers.

The Treasury said Mr Brown would be responding to the Tory motion.

While Labour’s Commons majority should ensure the chancellor comfortably survives the vote, the Conservatives will hope that it focuses attention once again on his handling of the pensions issue.

Documents

The motion is part of an opposition-led debate.

A recent release of Treasury documents under the Freedom of Information Act led to claims that Mr Brown had ignored the advice of officials when he abolished tax relief on pension funds. The Treasury denies the claim.

Mr Osborne said: “This is Gordon Brown’s chance to explain why he sought to hide the dangers of his reckless raid on pensioners’ savings.

“After the revelations about the raid, how can anyone have confidence in his judgement?

“We shall see if the chancellor has the political courage to apologise to the millions of pensioners affected.”

The wording of the Tory motion is likely to be along the lines of: “This House has no confidence in the chancellor’s handling of occupational pensions.”

The Treasury confirmed Mr Brown - the strong favourite to succeed Tony Blair as prime minister later this year - would be responding to the Tory no-confidence motion in the debate.

Competitiveness

Earlier, Economic Secretary to the Treasury Ed Balls, who was the chancellor’s closest adviser in 1997, defended the decision to abolish the relief for pension funds as part of the package of business tax reforms designed to improve competitiveness.

“These were difficult decisions - inevitably controversial,” he said in a speech to the British Chambers of Commerce annual conference in London.

“But the government judged that this package of reforms was necessary both to cut national debt and improve the climate for long-term investment and enhance the competitiveness of the UK.

“And since 1997 we have indeed experienced a decade of stability that has helped improve the environment for UK businesses to invest - with the fastest growth in business investment in any nine-year period since data began in the 1960s.”

The Conservatives said that they would be tabling an amendment to the government’s Pensions Bill when it returns to the Commons on Wednesday to help those who have lost occupational pensions since 1997.

Mr Brown has insisted his change to pension tax rules 10 years ago was the “right decision”.

He said it had raised £5bn a year from pension funds and had been a key reason the UK economy had been strong for the past decade.

It is the first time Mr Osborne and Mr Brown have gone head-to-head in the Commons on the subject of pensions since the row erupted again earlier this month.