Labor steps up attack on Hunt’s pension tax break

The opposition has announced that it will rescind tax breaks on pensions from the Chancellor’s budget for high earners when it comes to power in the next general election.

Mr Hunt believes the abolition of the lifetime allowance, which is expected to cost £2.75 billion over the next five years, will alleviate labor shortages, particularly in the NHS.

He has argued that this will encourage older workers, including senior doctors, to remain in employment rather than retire early when their pension pots reach the current tax-free lifetime limit of £1.07million.

The Office for Budget Responsibility (OBR) watchdog has estimated that restructuring pension supplements – which included raising the annual amount people can pay in from £40,000 to £60,000 – could add 15,000 people to the workforce.

But Labor pointed to figures showing that in 2020-21 just 8,600 people were charged with violating the lifetime allowance – 0.01% of the population.

The annual £1bn price tag for the pension reform package meant it cost £70,000 for each of the 15,000 workers the OBR believes will remain in employment.

Shadow Treasury Secretary Pat McFadden said: “In the run-up to the budget, Labor urged the Government to look into doctors’ pension problems. In fact, we were attacked for this by the Conservatives, who said such a proposal was unaffordable.

“The vast majority of pensioners will not benefit from the Government’s proposals because they will never come close to a pension pot of more than £1million.

“The Government should reconsider this giveaway and instead focus on a scheme to address the early retirement issues facing the NHS.”

Finance Secretary John Glen said Labor should “stop playing politics” on this issue.

“Just a few months ago Labor said they were going to end the lifetime benefit because it would mean ‘patients would be treated faster’ and ‘lives would be saved,'” he said.

“The Conservative Government want to put more doctors on the front line of our NHS to cut waiting lists – Labor needs to explain to the British people why they disagree.”