Home Entertainment DAILY MAIL COMMENT: Is Labour planning a new pensions raid?

DAILY MAIL COMMENT: Is Labour planning a new pensions raid?

21
0


At first glance, Jeremy Hunt‘s pension tax guarantee may look like another pitch to the ‘grey vote’. It is far more than that.

The Chancellor promises that, if re-elected, the Conservatives would not increase existing taxes on pensions or introduce new ones in the next five years.

This reassurance is designed to give workers confidence that if they save prudently for retirement, the avaricious taxman will not pillage those savings.

And it is as important for people in their twenties as for those approaching or past retirement age – arguably more so.

A pension fund is accumulated across the whole of a working lifetime. Those who have built up a nest-egg have paid their dues over decades.

The Chancellor, Jeremy Hunt (pictured), has promised that if re-elected, the Conservatives would not increase existing taxes on pensions or introduce new ones in the next five years

The Chancellor, Jeremy Hunt (pictured), has promised that if re-elected, the Conservatives would not increase existing taxes on pensions or introduce new ones in the next five years

Shadow Chancellor Rachel Reeves (pictured) has said Labour would not raise income tax, National Insurance, or VAT

Shadow Chancellor Rachel Reeves (pictured) has said Labour would not raise income tax, National Insurance, or VAT

Younger generations must be encouraged to do the same, otherwise many will be forced to fall back on the state at pension age at immense cost to the country.

Shadow Chancellor Rachel Reeves has said Labour would not raise income tax, National Insurance, or VAT. Unlike Mr Hunt, however, she has made no such commitment over private pensions.

If history is any guide, that should make savers very afraid. In 1997, one of New Labour’s first acts was to abolish tax-relief on the dividends pension funds received on investments.

This raid, not mentioned in its manifesto, sucked £5.6billion a year out of the system, leading to the demise of final salary-based pensions in the private sector.

Previously, almost all sizeable firms had offered them. Today they are almost extinct, except in the public sector, where defined benefit schemes – backed at huge expense by the state – are still the norm.

So, will Ms Reeves target private pensions again? We already know she plans to reimpose the lifetime cap on the tax-free amount savers can put into their fund.

But there are other drastic measures she has not ruled out. Would she slash tax relief on employee pension contributions? Lower the ceiling on how much can be put into a fund each year? Raise taxes on the share dealings that pension funds rely on? Reduce the lifetime cap further? Make pensioners pay National Insurance? Cut the tax-free lump sum entitlement on pension pots from its current 25 per cent?

These are questions Labour has a moral duty to answer before July 4, to prove they aren’t plotting a Gordon Brown-style ambush. The party’s silence is ominous.

They would, of course, try to couch any new raid in terms of generational fairness. But the young will eventually become old themselves. To ravage the pension system for short-term gain would be a betrayal of their future as much as anyone’s.

A lesson in cruelty

When Labour decided to impose VAT on independent schools, they no doubt saw it as a blow against great bastions of wealth and privilege. As we report today, the reality is very different.

Downham preparatory school, in Norfolk, caters for pupils with complex needs ranging from autism to emotional problems, making them unable to cope in large classes.

Downham preparatory school (pictured) has said they are being forced to close because of Labour's plans to impose VAT on schools

Downham preparatory school (pictured) has said they are being forced to close because of Labour’s plans to impose VAT on schools

According to its principal, their parents are working people ‘like plumbers and electricians’ making sacrifices for the sake of their children’s well-being.

That the school is being forced to close because of this tax hike shows how cruel and spiteful it is.

As many thousands of other private pupils are thrown into the state sector, it could also end up costing the country a great deal of money.



Source link

Previous articleBBC to host final election debate between Rishi Sunak and Keir Stamer days before nation goes to polls
Next articleThis is why restaurants are SO loud – as expert reveals solutions that could help dial down noise complaints from infuriated diners

LEAVE A REPLY

Please enter your comment!
Please enter your name here