Bank of England's QE 'hits tax revenues Money ploughed into pension schemes to plug ballooning deficits, largely as a result of more QE, is money companies could better spend elsewhere in investment and growth, the insurance company will argue. The Pension Protection Fund has calculated that, since the introduction of QE, defined-benefit scheme deficits increased by £135bn between 2009-10 and 2011-12. This is because QE worsens the yield on gilts, which increases the size of companies" pension liabilities. Between 2012 and 2014, PIC calculates that scheme deficits will rise by another £100bn. Based on an average corporation tax rate of 23pc over this period, HMRC could miss out on up £7.7bn a year. Mark Gull, co-head of asset and liability management at PIC, said: "Pension funds have to fill these deficits; money is coming out of corporate sponsors [employers] of pension schemes into filling the deficits, and there's a tax consequence of that." He said that this was an "unintended consequence" of low gilt yields, adding: "It would be more appropriate to clean up bank balance sheets to enable banks to have more clarity about assets and to make it easier to lend." Mr Gull went on to say that QE was "very effective" when it started in 2009 but, when later rounds of QE happened, the gilt yields were much lower, meaning the "effects of stimulating the economy were not nearly as good." Minutes of the Bank of England's policy meeting on Jan 9-10 showed policymakers have growing doubts about the value of restarting the programme of asset purchases. A Treasury spokesman declined to comment.