Hunt defends pension tax breaks ‘for the rich’

The Chancellor spoke on Thursday, a day after handing over his first budget, aiming to boost Britain’s slowing economic growth and get more people back to work.

But Mr Hunt has been criticized for scrapping the £1.07million lifetime pension supplement – a move Labor said was the “wrong priority”.

The Chancellor insisted on Thursday that the pension changes – which included raising the annual tax-free allowance from £40,000 to £60,000 – were specifically designed to encourage doctors to return to the NHS.

Asked if the changes would only help the country’s richest 1 per cent, Mr Hunt told BBC Breakfast: “No. This is a change largely because we have a major problem in the NHS, with doctors reducing their hours or taking early retirement at precisely the time when the NHS needs them most.

“The Royal College of Surgeons says 69 per cent of their members have reduced working hours because of how the pension system works. And we have a backlog of 7 million people in the NHS.”

Speaking to him on Sky News that his budget is not “for the people”, he said: “When people are going through difficult times like they are going through now with these huge hikes in energy bills, obviously we want to help people.”

He called “bizarre” any suggestion that the measure was a tax treat for the top 1 percent of earners.

The Chancellor said the move is designed to prevent advisers from leaving the NHS early because current pension rules make it not worth continuing to work.

But critics say the failure to limit it to doctors means wealthy workers in other sectors can top up their pension funds without paying taxes on their savings.

The Office for Budgetary Responsibility has estimated that – combined with one – it will increase employment by 15,000 workers.

The think tank Resolution Foundation (RF) said it was “enormously wasteful” and cost around £80,000 a job.

Labor says it will reverse the move if it wins the next election, likely next year.

Shadow Chancellor Rachel Reeves added that the party will try to force a vote in the House of Commons next week. She also said a Labor government would reintroduce 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 are facing rising bills, higher costs and frozen wages, this gold-plated giveaway has the wrong priority, at the wrong time, for the wrong people,” she said.