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Rachel Reeves ‘war on pensioners’ continues with £16bn tax raid ‘being considered’

Rachel Reeves could launch a £16 billion pension tax raid and hit retirement incomes, a report has warned.

The Chancellor may consider charging employers National Insurance for retirement contributions in October’s Budget, according to pensions consultancy firm Lane Clark & Peacock (LCP).

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Chancellor Rachel Reeves could target private sector pensions (Image: Getty)

Ms Reeves could be tempted to target tax relief on employer contributions which are currently exempt from National Insurance (NI).

This would save the Treasury £23 billion, according to Government calculations.

Labour Party Conference 2024

Chancellor of the Exchequer, Rachel Reeves during an ‘in conversation’ event (Image: PA)

But LCP suggested the Chancellor may choose to exempt public sector workers.

This would save ministers £16 billion – but it would leave private sector employers to pick up the bill.

Employees pay an NI rate of 8pc on earnings between £242 and £967 a week and 2pc thereafter. Employers pay 13.8pc on all earnings above £175 per week. But no NI is levied on either the worker or the firm if that same remuneration is paid into a pension.

Experts fear the changes could lead to employers lowering the amount they spend on their workers’ pensions, hitting retirement incomes.

But LCP said Ms Reeves may continue targeting pensioners because it has the “potential to raise billions of pounds”, could be implemented quickly and would not directly hit voters’ pay.

Tom McPhail, of pensions consultancy The Lang Cat, warned that targeting employer pension contribution tax relief would leave employees worse off in retirement.

He said: “The consequence will likely be that generous pension schemes where employers pay more than the minimum of 3pc will get rarer.

“The impact on employers will be smaller retirement savings in 10 or 20 years down the line when they come to retire.”

Steve Webb, partner at LCP said: “The Chancellor will be looking for relatively simple changes which can be introduced quickly and will raise large sums with least voter anger.

“Changes to taxes on business may fall within that category and the large cost of exempting employer pension contributions from NI contributions will not have escaped the Chancellor’s attention”.

A Treasury spokesman said: We do not comment on speculation around tax changes outside of fiscal events.”

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Shocking graphs show exact date Keir Starmer’s freebies rocketed from £900 to £100k

Gifts to Prime Minister Kier Starmer sky-rocketed from £900 to over £100,000 as he was lavished with hospitality ahead of his election victory, analysis by the Express has shown.

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Keir Starmer’s appearance at the Euro 2020 final sparked a spree of hospitality gifts being accepted (Image: Getty)

Delving into the Parliamentary archives for members’ financial interests shows that in the North London politician’s early days as an MP his trips were infrequent and fairly modest.

From 2015 to his run for the Labour leadership four years later, the only two trips of note were a visit to Taiwan to meet political leaders and an evening in Leeds for the Yorkshire Post Excellence in Business Awards.

By the time he became leader of the opposition in 2020, his all-time total for gifts received was barely £1,000.

However, once he’d taken the hot seat and Covid lockdown restrictions were relaxed, the hospitality enjoyed by Starmer multiplied considerably.

In the summer of 2021, he was in the posh seats for the final of the European Championships at Wembley and the Challenge Cup Final at Old Trafford, as well as being treated to corporate boxes for his local teams Arsenal and Saracens’ games.

Five holidays, eight Premier League matches, two Coldplay gigs and one sold-out Talyor Swift concert later the total value of gifts he’s declared is 100 times higher than it was three years ago at £102,120.

Chancellor Rachel Reeves, meanwhile, hadn’t accepted a single gift in her Parliamentary career until the start of last year when she started being given theatre tickets worth hundreds of pounds.

By the summer of 2023, the then shadow Chancellor was taking two guests to Wimbledon and tickets to the Proms.

A graph showing the total value of gifts recieved by Rachel Reeves

Rachel Reeves had not accepted any gifts until January 2023 (Image: Reach Data Unit)

Although her total is dwarfed considerably by Starmer in the past year the gifts accepted by Reeves have still gone from £220 to £13,873.

Angela Rayner’s gifts are the most modest of arguably the three biggest names on the Labour front bench. She has accepted a mere £2,176 with tickets to festival Parklife in Manchester near her constituency making up a sizable portion of the hospitality the Labour deputy leader has enjoyed.

MPs have been under greater scrutiny over the freebies they accepted after it was revealed Sir Keir Starmer accepted £35,000 worth of tickets from football clubs and other politicians were gifted tickets to sold-out events like Taylor Swift’s summer tour.

Both parliamentarians and those seeking to influence them with hospitality have been forced to defend the gifts. Starmer claimed he has “done nothing wrong” by accepting the freebies and last week the Premier League said spending £8,500 to take five Labour MPs to the Brit Awards “is normal practice.”

English football’s most powerful body was forced to explain itself after Express analysis of The Register of Members’ Interests showed that, as politicians debated whether top-flight soccer in England required an independent regulator, the most affected organisation was treating them to a night out where they got to enjoy performances by Calvin Harris, Ellie Goulding, Dua Lipa and Kylie Minogue.

The cumulative total of gifts accepted by Labour front benchers

The gifts accepted by Labour’s biggest names has sky-rocketed as power beckoned (Image: Reach Data unit)

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