Labour vows to reverse Hunt’s ‘gilded giveaway’ to wealthy pensions savers

Labour has pledged to reverse Chancellor Jeremy Hunt’s £1 billion Budget pensions tax break for high earners if it gains power at the next general election.

Shadow Chancellor Rachel Reeves said the party will seek to force a Commons vote next week on the decision to scrap the £1.07 million lifetime pensions allowance.

The measure is designed to prevent consultants retiring early from the NHS because the current pension rules mean it is not worth them carrying on working.

The Office for Budget Responsibility has estimated that – combined with an increase in the pensions annual tax-free allowance, from £40,000 to £60,000 – it will increase employment by 15,000 workers.

The chancellor claimed it "will stop over 80% of NHS doctors from receiving a tax charge, incentivise our most experienced and productive workers to stay in work for longer and simplify our tax system, taking thousands of people out of the complexity of pension tax".

However, Ms Reeves said a Labour government would reinstate the lifetime allowance and create a targeted scheme for doctors rather than allowing a “free-for-all for the wealthy few”.

“At a time when families across the country face rising bills, higher costs and frozen wages, this gilded giveaway is the wrong priority, at the wrong time, for the wrong people,” she said.

“That’s why a Labour government will reverse this move. We urge the chancellor and the Conservative government to think again too.”

It was a stance that was echoed by Sir Keir Starmer after the Budget, who said it was "a huge giveaway to some of the very wealthiest."

He added: "The only permanent tax cut in the budget is for the richest 1%. How can that possibly be a priority for this government?"

Mr Hunt did not deny this in a broadcast interview following the Budget.

When asked if it was a budget for the rich, Mr Hunt said: "Of course we want to help older people who want to stay in work and by definition they will generally be on higher salaries."

The chancellor also accused Labour of shifting their position “overnight” on scrapping the lifetime pension allowance threshold.

Speaking to Sky News, Jeremy Hunt said: "I think if you talk to anyone in the NHS, they will say doctors leaving the workforce because of pension rules is a big problem.

“It is something, incidentally, that Labour advocated last September.

“(Shadow health secretary) West Streeting said we should get rid of the cap on pensions, the lifetime allowance.

“He seems to have changed his mind overnight on that one. He said it was crazy and it would save lives to get rid of that cap."

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