Rumours are swirling of Chancellor Reeves eyeing up a raid on pension tax reliefs, aiming to tighten her grip on hardworking Britons’ wallets. Now the Institute for Fiscal Studies has called for Reeves to reduce the amount that pensioners can withdraw from their pension pots tax-free. As it stands, savers can take out 25% of their pension tax-free up to £268,275, though the tax-happy think tank says this should be reduced to £100,000. Hitting 1 in 5 hard-working retirees’ wallets…
Tax lawyer and senior Labour activist Dan Neidle slammed the idea, pointing out the tax-free lump sum has been a cornerstone of the “deal” that workers have been promised when putting their hard-earned cash into their pensions. It would be yet another policy proving high-tax Labour view the elderly vote as less important. Reeves would be wise to ignore the idea, branded “unethical” by Cut My Tax. Changing the rules half-way through the game isn’t a good look for a party that claims to be one of “integrity”…
Co-conspirators will remember the “independent” Institute for Fiscal Studies report into private school VAT. The paper was jumped on by Labour and left-wing papers to “fact check” widely-held worries that Starmer’s class war on private schools will 1) funnel unsustainable numbers of children into the state system, and 2) not raise enough money. The paper allowed Labour politicians to “disagree” with challenges from the industry in media appearances, all without scrutiny…
The caveat-filled report’s author Luke Sibieta said he expects “that the change in private school attendance levels will be small. This leads to surer increases in tax revenues and less need for additional public spending on state schools.” Where Sibieta claims the policy will raise “£1.3–1.5 billion per year in the medium to long run” because only 40,000 children will switch to the state system, the vast majority of other reports predict that the policy will actually be cost-negative before too long. Guido wonders if there is any particular reason why the report’s author would want to support the policy…
Sibieta studied at UCL, teaching at which was Francis Green, chairman of the Private Education Policy Forum – an organisation which seeks to disparage and ultimately disband private schools. They have both contributed to the IFS’ major “Inequality Review”. Two months ago Green appeared at the PEPF to chat about his Labour-supporting report. Privately-educated Green also happens to have advised Jeremy Corbyn when the VAT policy and others were first drafted in 2017. Seven years later the PEPF is drawing up plans with the Labour Party for the state to take over schools that are forced to shut due to the extra tax. No wonder that Sibieta has produced a paper in support of a policy to further that plan…
UPDATE: The IFS says: “Luke cannot recall ever having met Francis“.
Speaking at his speech on how to achieve “progressive capitalism” Wes Streeting fired a dig and Andy Burnham:
“Bond markets are not bond villains and fiscal rules matter.”