Conservatives promise tax cut for pensioners with ‘triple lock plus’
The Conservatives have promised to cut taxes for pensioners by creating a new “age-related” tax-free allowance – dubbed “triple lock plus”.
Currently, people can receive £12,570 a year of their pensions before they start paying income tax on them – the same figure as the personal allowance for those who work.
But if the party wins the next election, a pensioner’s allowance would rise in line with either average earnings, inflation or by 2.5% – whichever is higher – from next April, echoing the rules on annual state pension increases.
Rishi Sunak said the move “demonstrates we are on the side of pensioners”, and would bring people “peace of mind and security in retirement”.
But Labour’s shadow paymaster general, Jonathan Ashworth, called it “another desperate move from a chaotic Tory party torching any remaining facade of its claims to economic credibility”.
He added: “Why would anyone believe the Tories and Rishi Sunak on tax after they left the country with the highest tax burden in 70 years?”
The Liberal Democrats said the Conservatives had “hammered pensioners with years of unfair tax hikes”, adding: “People won’t be fooled by yet another empty promise from Rishi Sunak after this record of failure.”
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The Conservatives first brought in the triple lock when they were in a coalition government with the Liberal Democrats in 2010 to tackle pensioner poverty, saying the annual rise would protect retirees from hikes in living costs, and both Labour and the Lib Dems have promised to keep it in place.
However, while the state pension has continued to rise, the threshold for when both pensioners and those of working age pay income tax has remained frozen since April 2021 when Boris Johnson was in power, meaning some of those on lower incomes have been brought into paying tax.
This new measure would change that for pensioners, with a “guarantee in legislation that the pensioners’ personal allowance will always be higher than the level of the new state pension”.
The Tories said eight million people would save around £100 next year and gain further savings each year as the tax-free allowance grew, with the £2.4bn a year policy paid for through “clamping down” on tax avoidance and evasion.
Boris Johnson froze the thresholds for paying income tax in April 2021, but Rishi Sunak is planning to change that for pensioners. Pic: AP
Making the announcement, Mr Sunak said: “I passionately believe that those who have worked hard all their lives should have peace of mind and security in retirement.
“Thanks to the Conservatives’ triple lock, pensions have risen by £900 this year and now we will cut their taxes by around £100 next year.
“This bold action demonstrates we are on the side of pensioners. The alternative is Labour dragging everyone in receipt of the full state pension into income tax for the first time in history.”
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But Labour’s Mr Ashworth hit back, saying: “Not only have they promised to spend tens of billions of pounds since this campaign began, they also have a completely unfunded £46bn policy to scrap national insurance that threatens the very basis of the state pension.
“Labour will protect the triple lock. But Rishi Sunak is planning to reward Britain’s pensioners for their loyalty by stabbing them in the back, just like he did to Boris Johnson and just like he has done to his own MPs.”
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This is another bold and very political announcement by the Conservatives.
It was only months ago that there had been discussion in Whitehall of whether the triple lock had a future at all, given its extortionate cost.
Now the Tories have gone in the opposite direction, dressing up an income tax cut for pensioners as a beefing up of the expensive ratchet measure.
It will likely prompt questions of generational fairness, given that tax thresholds for those of working age are still due to stay frozen until 2028, while at the same time the triple lock has seen the state pension rise by 8.5% this year and 10.1% in 2023.
Tory sources pointed out that workers had already had a big national insurance cut. And while they said there were currently no plans to unfreeze allowances more broadly, they did re-emphasise an ambition to keep cutting taxes in other areas if feasible.
This move is political because it will inevitably lead to questions about whether Labour will follow suit and mirror this promise.
If they do not, expect accusations of a Labour tax rise for pensioners.
What’s more, with the state pension expected to rise above the current allowance level in a few years, the Tories are also suggesting that a Labour government would drag everyone who claims the state pension into paying income tax for the first time.
The hobbling irony there, of course, is the main reason that would happen is the tax allowance freezes that the Tories brought in.
Coming off the back of the national service policy blitz, this is clearly another attempt to reach out to the Tory base of older voters.
Combine that with Rishi Sunak’s recent visits to traditional Conservative heartland seats and it’s hard not to conclude that this is a campaign currently in a defensive mode.
What’s maybe more interesting though is that, as yet, neither Labour nor the Liberal Democrats have criticised the substance of the policy change directly, no doubt aware of the political risks of being seen to line up against tax cuts for pensioners.
While the Conservatives will focus on pensioners, Labour will use Tuesday to appeal to businesses as shadow chancellor Rachel Reeves makes her first major speech of the general election campaign.
She will promise to run “the most pro-growth Treasury in our country’s history” if her party takes power on 4 July, and promises to be both “pro-worker and pro-business, in the knowledge that each depends upon the success of the other”.
It comes after more than 120 business leaders, including chef Tom Kerridge and Wikileaks founder Jimmy Wales, signed an open letter giving their backing to Labour to “achieve the UK’s full economic potential”.
The Liberal Democrats will turn their attention to crime on the campaign trail, pledging to introduce “burglary response guarantee” so all domestic burglaries are “attended by the police and properly investigated”.
Politics
Row over how many farms will be affected by inheritance tax policy – as PM doubles down ahead of farmers protest
Sir Keir Starmer has insisted the “vast majority of farmers” will not be affected by changes to Inheritance Tax (IHT) ahead of a protest outside parliament on Tuesday.
It follows Chancellor Rachel Reeves announcing a 20% inheritance tax that will apply to farms worth more than £1m from April 2026, where they were previously exempt.
But the prime minister looked to quell fears as he resisted calls to change course.
Speaking from the G20 summit in Brazil, he said: “If you take a typical case of a couple wanting to pass a family farm down to one of their children, which would be a very typical example, with all of the thresholds in place, that’s £3m before any inheritance tax is paid.”
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The comments come as thousands of farmers, including celebrity farmer Jeremy Clarkson, are due to descend on Whitehall on Tuesday to protest the change.
And 1,800 more will take part in a “mass lobby” where members of the National Farmers’ Union (NFU) will meet their MPs in parliament to urge them to ask Ms Reeves to reconsider the policy.
Speaking to broadcasters, Sir Keir insisted the government is supportive of farmers, pointing to a £5bn investment announced for them in the budget.
He said: “I’m confident that the vast majority of farms and farmers will not be affected at all by that aspect of the budget.
“They will be affected by the £5bn that we’re putting into farming. And I’m very happy to work with farmers on that.”
Sir Keir’s spokesman made a similar argument earlier on Monday, saying the government expects 73% of farms to not be affected by the change.
Environment, Farming and Rural Affairs Secretary Steve Reed said only about 500 out of the UK’s 209,000 farms would be affected, according to Treasury calculations.
However, that number has been questioned by several farming groups and the Conservatives.
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The NFU said the real number is about two-thirds, with its president Tom Bradshaw calling the government’s figures “misleading” and accusing it of not understanding the sector.
The Country Land and Business Association (CLA) said the policy could affect 70,000 farms.
Conservative shadow farming minister Robbie Moore accused the government last week of “regurgitating” figures that represent “past claimants of agricultural property relief, not combined with business property relief” because he said the Treasury does not have that data.
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Agricultural property relief (APR) currently provides farmers 100% relief from paying inheritance tax on agricultural land or pasture used for rearing livestock or fish, and can include woodland and buildings, such as farmhouses, if they are necessary for that land to function.
Farmers can also claim business property relief (BPR), providing 50% or 100% relief on assets used by a trading business, which for farmers could include land, buildings, plant or machinery used by the business, farm shops and holiday cottages.
APR and BPR can often apply to the same asset, especially farmed land, but APR should be the priority, however BPR can be claimed in addition if APR does not cover the full value (e.g. if the land has development value above its agricultural value).
APR and BPR can apply to farmland, which the Conservatives say has been overlooked by the Treasury in compiling its impact figures. File pic: iStock
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Mr Moore said the Department for the Environment, Farming and Rural Affairs (DEFRA) and the Treasury have disagreed on how many farms will be impacted “by as much as 40%” due to the lack of data on farmers using BPR.
Lib Dem MP Tim Farron said last week1,400 farmers in Cumbria, where he is an MP, will be affected and will not be able to afford to pay the tax as many are on less than the minimum wage despite being asset rich.
Politics
Cabinet split over assisted dying as Education Secretary Bridget Phillipson latest to reveal she will vote against bill
A split is emerging in the cabinet, with Education Secretary Bridget Phillipson revealing she will join several of her colleagues and vote against the bill to legalise assisted dying.
Ms Phillipson told Sky News she will vote against the proposed legislation at the end of this month, which would give terminally ill people with six months to live the option to end their lives.
She voted against assisted dying in 2015 and said: “I haven’t changed my mind.
“I continue to think about this deeply. But my position hasn’t changed since 2015.”
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MPs will be given a free vote on the bill, so they will not be told how to vote by their party.
The topic has seen a split in the cabinet – however, Prime Minister Sir Keir Starmer has yet to reveal how he will vote on 29 November.
Ms Phillipson joins some other big names who have publicly said they are voting against the bill
These include Deputy PM Angela Rayner, Health Secretary Wes Streeting, Justice Secretary Shabana Mahmood and Business Secretary Jonathan Reynolds.
Border security minister Angela Eagle is also voting against the bill.
Senior cabinet members voting in favour of assisted dying include Energy Secretary Ed Miliband, Science Secretary Peter Kyle, Work and Pensions Secretary Liz Kendall, Culture Secretary Lisa Nandy, Northern Ireland Secretary Hilary Benn, Transport Secretary Louise Haigh and Welsh Secretary Jo Stevens.
The split over the issue is said to be causing friction within government, with Sir Keir rebuking the health secretary for repeatedly saying he is against the bill and for ordering officials to review the costs of implementing any changes in the law.
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Health Secretary Wes Streeting has called for a cost report into assisted dying. Pic: PA
Sky News’ deputy political editor Sam Coates has been told Morgan McSweeney, the PM’s chief of staff, is concerned about the politics of the bill passing.
He is understood to be worried the issue will dominate the agenda next year and, while he is not taking a view on the bill, he can see it taking over the national conversation and distracting from core government priorities like the economy and borders.
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Details of the bill were published last week and include people wanting to end their life having to self-administer the medicine.
It would only be allowed for terminally ill people who have been given six months to live.
Two independent doctors would have to confirm a patient is eligible for assisted dying and a High Court judge would have to give their approval before it could go ahead.
Politics
Lord Patten calls on Sir Keir Starmer to condemn ‘sham’ sentencing of 45 Hong Kong pro-democracy campaigners
Lord Patten, the last governor of Hong Kong, has called on the British government to condemn the “sham” sentencing of 45 Hong Kong politicians and activists as Sir Keir Starmer holds talks with the Chinese president.
The former opposition pro-democracy politicians, social workers, activists and academics are due to be sentenced on Tuesday for conspiring to subvert power through an unofficial “primary” election four years ago.
Members of the public have been queuing to attend their sentencing, which will see them facing up to life in jail.
It is Hong Kong’s largest and longest-running prosecution under the national security law, which was enforced by Beijing and saw months of mass protests, police violence and arrests in 2020 and 2021.
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Called the “Hong Kong 47” after 47 were charged in January 2021 with conspiracy to commit subversion, 45 of them are set to be sentenced this week after two were acquitted in May this year.
Lord Patten, a patron of British NGO Hong Kong Watch, said the sentences tomorrow will be a “sham” and he called on the prime minister to speak out against them.
Sir Keir met Chinese President Xi Jinping at the G20 summit in Rio on Monday where he told him a “strong UK-China relationship is important for both of our countries”.
The UK PM told reporters on Sunday he intended to pursue a “serious, pragmatic” relationship with Beijing.
Sir Keir Starmer during a meeting with Xi Jinping in Rio. Pic: PA
Lord Patten said: “The sentencing of 45 of the 47 Hong Kong democrats is not only an affront to the people of Hong Kong, but those who value rights and freedoms around the world.
“These brave individuals were an integral part of defining the pro-democracy movement in Hong Kong, and were peacefully supported by thousands through votes.
“I absolutely condemn these sham sentences, which resulted from a non-jury trial and point to the destruction of freedoms of assembly, expression, and the press in Hong Kong.
“The UK government must not allow the results of this case to go unnoticed or uncondemned.”
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Sir Keir’s meeting with President Xi in Rio is the first of any prime minister in more than six years.
The PM and his foreign secretary, David Lammy, have been critical of China in the past, particularly regarding allegations of human rights abuses against Uyghurs in Xinjiang.
Relations between the UK and China have become frosty over the last decade as the Conservative government spoke out against human rights abuses and concerns grew over national security risks from Chinese investment.
Sir Keir appears to be prioritising trade, with China being Britain’s sixth largest trading partner, accounting for 5% of goods and services trade worth £86.5bn.
The PM’s spokesman said Sir Keir told Mr Xi he wants to “engage honestly and frankly on those areas where we have different perspectives, including on Hong Kong, human rights and Russia’s war in Ukraine”.
Student protest leader turned politician Joshua Wong is one of the Hong Kong 47. Pic: Reuters
Hong Kong 47 in jail for nearly four years
Most of the Hong Kong 47 have been in custody since they were arrested in early 2021.
One of the most famous members of the group is Nobel Peace Prize nominee Joshua Wong, a student protest leader who became leader of the now-disbanded political group Demosisto.
Sixteen of the group pleaded not guilty, with 14 of them convicted after a 118-day trial without a jury. Those found guilty will be sentenced along with 31 who pleaded guilty.
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They were arrested after organising a primary election in July 2020 aiming to help pro-democracy politicians seize a majority in the 2021 Legislative Council elections.
Prosecutors said had they won a majority in the chamber, the democrats were planning to “indiscriminately” veto bills, including the annual budget, which would force the chief executive’s resignation and a government shutdown.
National security judges ruled the move would have plunged Hong Kong into a “constitutional crisis”.
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