I missed it at the time, but my attention has been drawn by discussion of the woes of corporate pension funds to a policy document published early in 2010 by the Conservatives setting out George Osborne's plans for the economy. Section 2 is the plan for "Creating a more balanced economy" "We will create the conditions for higher exports, business investment and saving as a share of GDP".
The section laments low levels of business investment in the UK, and lists some rather insubstantial ideas to increase it. Then it goes on to discuss savings " Over the longer term, we will reverse the effects on pension savers of the 1997 abolition of the dividend tax credit for pension funds". This is a reference to Gordon Brown's so-called 'raid on pension funds', which I thoroughly approve of.
So having identified insufficient business investment as a problem for the UK economy, Osborne proposed a tax break which would encourage businesses to pay dividends rather than reinvest profits.
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