Why Labour Doesn’t Have to Run Scared on Taxes
Pensions offer Starmer a chance to raise revenue and stimulate spending.
A new pensions regime could be among the changes coming under a Labour government.
Photographer: Peter Nicholls/Getty Images EuropeAfter a downbeat start that featured an ill-conceived event at the Titanic Museum, the UK election campaign has sparked into life. The unlikely catalyst was pension taxation. According to a YouGov poll, Prime Minister Rishi Sunak, who polls showed won last week’s debate against Labour leader Keir Starmer owed this unexpected success almost entirely to outperforming him on taxation. The incentive for the Conservatives to fight the election on pension taxes was clear even before that.
Pensions are a rare example of the current government cutting taxes. Last year, Chancellor of the Exchequer Jeremy Hunt removed an important limit on the amount of tax relief that wealthy savers can claim on pension contributions — the so-called lifetime allowance (LTA). Better still, from Sunak’s perspective at least, was that, prior to last night’s dramatic policy U-turn, reinstating the ceiling was one of Labour’s few tax pledges.