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Jeremy Hunt promises pensioners he will not let them down on major tax change

2024-03-15 00:00:00.0 每日快报-政治原网页

Jeremy Hunt promised to protect pensioners in his plans for sweeping reforms to end the “unfair” double taxation of workers.

The Chancellor insisted his intention to end national insurance would be done without “harming” retirees after Labour claimed it would mean the end of the state pension.

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“Our plan is to do this when it’s responsible – without harming pensioners or damaging funding for the NHS and other public services.”

Chancellor Jeremy Hunt announced plans to abolish national insurance at the budget (Image: House of Commons)

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Shadow chancellor Rachel Reeves was accused of scaremongering earlier this week after she claimed national insurance contributions fund state pensions and the NHS.

But neither is dependent on the tax and the government can use any cash raised by taxation to meet its spending commitments.

Silver Voices director Dennis Reed said that although state pensions are not reliant on the amount of NICs collected by the government, abolishing it could lead to problems.

He said: “When national insurance was set up, it was intended to fund the state pension and benefits.

“It has become muddled up over successive governments.

“But if there is no national insurance at all it opens up the doors to means testing of the state pension in future.

“If everything comes from the taxman it becomes a benefit rather than the deferred payment it is.”

National Insurance Contributions fund state pensions and the NHS.

So will the Prime Minister’s ￡46 billion of unfunded tax cuts come from cutting state pensions or cuts to our NHS? #PMQs

— Rachel Reeves (@RachelReevesMP) March 13, 2024

Mr Reed said pensioners must be given a proper deal when the general election is called.

“On the triple lock, older people want to see a commitment for the whole of the next parliament,” he said.

“A vague manifesto commitment will not be enough.”

The Chancellor has been concerned in the past about the high cost of the increases in the state pension caused by the triple lock.

But since taking over at the Treasury he has looked at the detail about the significant numbers of pensioners who struggle to make ends meet and is fully committed to the funding formula.

A senior Whitehall source pointed to the government’s track record on committing to the triple lock when it is considering what will make it into the manifesto.

Another insider said they “can’t see it not being there” after the decision to stick with it through such big increases in the last two years.

This is just scaremongering. The value of NICs receipts do not determine the NHS budget or the value of pensions. Those decisions are taken entirely separately. If @RachelReevesMP was so concerned about this issue, presumably the Labour Party will be voting against our tax cuts… https://t.co/Wm5JJCHKxw

— Jeremy Hunt (@Jeremy_Hunt) March 13, 2024

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Around one in six older people live in poverty, according to official figures.

The triple lock links state pension increases to the highest of 2.5 per cent, wages rises or inflation.

It means payments will rise by 8.5% in April after a big rise in salaries, meaning a hike of ￡900 for some pensioners.

The full basic state pension will rise by ￡13.30 per week, from ￡156.20 to ￡169.50 - an extra ￡691.60 a year - while the full new state pension will rise by ￡17.35 per week, from ￡203.85 to ￡221.20 - another ￡902.20 annually.

It follows a 10.1% rise at the start of the current financial year.

The triple lock was introduced by the coalition government in 2010 and came into force the following year.

It has been applied every year since, except for a temporary suspension in 2022/23 as a result of the pandemic.

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Analysis of official figures found around 1.2 million households are “mainly reliant” on the dependent on the state pension for their retirement income.

It means at least three quarters of their cash comes from the payment.

Single pensioners account for most of the households largely and three times as many women, 580,000, as men 180,000, rely primarily on it.

Caroline Abrahams, charity director at Age UK said: “With about one in six pensioners living in relative poverty in the UK and many more still struggling on modest incomes, the Triple Lock is as important now as it has ever been.

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