Labour Party accused of ‘plotting to raid pensions’ in repeat of 1997 betrayal – when Gordon Brown targeted pensions

Work was accused yesterday of plotting to plunder pensions by overhauling tax relief on pension funds.

Chancellor Jeremy Hunt said the party would betray pensioners as he warned of a repeat of 1997, when Gordon Brown targeted pensions.

The Conservatives that Shadow Chancellor emphasized Rachel Reeves has repeatedly said that tax relief for pensions should be limited for the richest.

While Labor explicitly increases taxes such as VATthe party has only said that plundering pensions ‘is not a Labor policy and will not feature in our manifesto’.

The Tories say this opens the door to the party introducing the tax at another stage, such as in an emergency budget. Mr Hunt told The Sunday Telegraph that voters will never forget Mr Brown’s £118 billion raid on pension funds.

The Conservatives stressed that shadow chancellor Rachel Reeves (pictured) has repeatedly said tax relief for the richest should be limited.

Chancellor Jeremy Hunt (pictured) said the party would betray pensioners as he warned of a repeat of 1997 when Gordon Brown targeted pensions

“Labour has betrayed pensioners before,” he said. ‘We will never let this happen again. We fear that, just as Labor did in the past when they had a black hole in their finances, they will demand backdoor taxes on pensions.”

He made the comments as he promised to protect pension funds with a “pension tax guarantee” to prevent levies being raised or new ones introduced.

Mr Hunt also said he would retain the right to deduct 25 per cent as a tax-free lump sum and ensure the tax credit remains at the marginal rate.

Currently, all employees benefit from tax relief on pension contributions at the same rate, regardless of whether they are a basic or higher rate taxpayer. The Tories highlighted 12 times that Ms Reeves appeared to support a change to tax relief on pension contributions for the highest earners.

In one example from 2018, she said in a speech to the New Economics Foundation: ‘Forty percent of British wealth is in private pension funds.

‘We could limit the higher pension contributions.’

She made similar comments in The Everyday Economy the same year, saying of the 40 percent figure: “To combat this inequality, higher pension contributions could be limited.” And writing in The Independent in 2016, she said: ‘Let’s replace the £34 billion tax cut scheme for pensions with a simple savings bonus.’

Chancellor Jeremy Hunt said the party would betray pensioners as he warned of a repeat of 1997 when Gordon Brown targeted pensions, with Ms Reeves dismissing it as a “desperate gimmick”. Experts have also noted that the party has made several commitments for which funding is not yet available.

Paul Johnson, director of the influential Institute for Fiscal Studies, tweeted: ‘Some spicy ‘promises’ from Labour. Last week it promised to end NHS waiting lists over 18 weeks. Yesterday they said they would get the labor force participation rate to 80 percent. The former was only achieved through massive spending increases in the 2000s. We never came close to the latter. Time will tell.’

Currently, all employees enjoy tax relief on pension contributions at the same rate, regardless of whether they are a basic taxpayer or a higher taxpayer (Stock Image)

The Tories highlighted 12 times that Ms Reeves appeared to support a change to tax relief on pension contributions for the highest earners (Stock Image)

Mr Brown removed tax relief on dividends paid to pension funds in his first Budget of 1997, at a time when many funds were in surplus. His policies – which were circulated to the public weeks after the election wave – were blamed for killing private sector pension schemes. The Tories are now warning that Labor could be planning a similar ruse, after Sir Tony Blair and Mr Brown concealed the plans during the campaign.

Mr Hunt claimed a Labor government would ‘try to increase taxes where they think it won’t be noticed’.

Jonathan Gullis, deputy leader of the Conservative Party, said: ‘If they run out of money, like every Labor government, you can be sure they will have their hand in your pockets and in your pensions.’