Jeremy Hunt today took a swipe at Labour for “changing their mind overnight” on a major pensions tax break. The Chancellor scrapped the lifetime allowance in his Budget yesterday in a bid to stop an estimated 15,000 high earners – including senior NHS doctors – leaving the workforce.
But Labour has said it will reverse the measure if it gains power at the next general election.
Mr Hunt this morning said shadow health secretary Wes Streeting had previously backed scrapping the cap for doctors.
He told Sky News: “I think if you talk to anyone in the NHS, they will say doctors leaving the workforce because of pension rules is a big problem.
“It is something, incidentally, that Labour advocated last September.
“Wes Streeting said we should get rid of the cap on pensions, the lifetime allowance.
“He seems to have changed his mind overnight on that one.
“He said it was crazy and it would save lives to get rid of that cap. Well, he was right in September when he said that.”
The lifetime allowance – the total amount of tax-relieved contributions that an individual can accumulate – had stood at £1.07 million, with people potentially incurring tax charges as high as 55 percent on pension savings above this.
There had been reports the cap could be increased but Mr Hunt went far beyond expectations by ditching it altogether.
The measure is primarily aimed at preventing consultants retiring early from the NHS because the current pension rules mean it is not worth them carrying on working.
Labour has vowed to would reinstate the lifetime allowance and create a targeted scheme for doctors if it takes power at the next general election.
The party will also seek to force a Commons vote to derail the tax break next week.
Shadow chancellor Rachel Reeves said: “At a time when families across the country face rising bills, higher costs and frozen wages, this gilded giveaway is the wrong priority, at the wrong time, for the wrong people.
“That’s why a Labour government will reverse this move. We urge the Chancellor and the Conservative government to think again too.”