Reeves to deliver big speech amid warning not to scapegoat pensioners | Politics | News

Pensioners should not be made scapegoats for Rachel Reeves’ economic failings, campaigners have warned ahead of the Chancellor’s speech on Tuesday. Ms Reeves will set out her priorities for this month’s fiscal event and address growing speculation about plans to break her manifesto pledge on income tax.

He is expected to accept that the 2024 Budget failed to fix the fundamentals of the economy and is now coming back for more help to increase funding for other priorities such as the NHS. He will say: “You have all heard a lot of speculation about the choices I will make. I understand that; these are important choices that will shape our economy for years to come. But it is important that people understand the circumstances we face, the principles that guide my choices, and why I believe they will be the right choices for the country.”

But he was given a stern warning not to balance the books on pensioners amid rumors of an income tax hike.

Dennis Reed, of over-60s campaign group Silver Voices, told the Express that rumors of a 2p increase in income tax would “affect the vast majority of pensioners”.

He warned: “Silver Voices has no objection to the very wealthy paying more income tax to improve our public services, regardless of their age, but we warn the Chancellor not to target pensioners again in his Budget plans.

“An insidious move to pay back to working families by increasing income tax and cutting National Insurance will deliberately deal a blow to the vast majority of pensioners, including those on low and modest incomes.

“If the lower tax threshold remains frozen, it would be a double whammy for all seniors and evidence that pensioners are being scapegoated for the economic mess the country is in.”

The Resolution Foundation, a left-wing think tank closely linked to the Labor Government, is pushing for a policy that would increase income tax by 2p while cutting National Insurance by the same amount.

This will shift the burden onto those who do not pay National Insurance, including pensioners, the self-employed and homeowners, and will not affect most workers’ pay packets.

The Çözüm Foundation, which published its pre-budget report today, did not hide that it wanted retirees to bear most of the expected tax increases.

The think tank, whose former chief executive Torsten Bell is now a Treasury secretary in charge of Budget preparations, insisted: “Pensioners’ living standards have risen much more than those of working age – typical pensioner incomes have risen by 21% over the last 20 years, compared to just 4% of those of working age – and with the state pension set to rise by £560 next April, only pensioners on incomes over £40,000 will be worse off cash overall.”

A spokesman added that they would be happy to shift the tax burden onto pensioners after last year’s Budget showed they were “fully spared” in light of the U-turn on winter fuel cuts.

Tory Shadow Chancellor Sir Mel Stride pointed to Ms Reeves’ recent appointment of a new economic adviser, also from the Resolution Foundation, as further evidence that she was “intent” on higher taxes.

He told this newspaper: “This is a team proposing tax increases on everything – pensions, family homes, employers, fuel, council tax, inheritances. You name it, they want to tax it.”

“This is the risk of putting people in charge of the economy who have never run a business or created any jobs. Reeves and Starmer must start listening to those who actually drive our economy.”

“Starmer and Reeves cannot hide the facts; after last year’s disastrous budget they said they would not return with further tax rises. If they keep their word again, the Chancellor must go.”

Conservative leader Kemi Badenoch will also give a pre-Budget speech on Tuesday, urging Labor to focus on getting Britons back to work.

He will condemn Ms Reeves and Social Welfare Minister Pat McFadden for “giving up” on trying to cut the benefits bill after reports emerged that the government had failed to identify any potential savings.

Labour’s left-wing supporters appear to have forced the Government to abandon any efforts to cut benefits such as Personal Independence Payments, despite the Prime Minister saying the cost of the bill is “unsustainable”.

Ms Badenoch will warn: “Britain has stopped working because there is no point in working. Far from solving this, Labor seems determined to make it worse.”

“The Tories will make Britain work again because, first of all, it is deeply unfair.

“Earlier this year Labor supporters celebrated when they managed to pass legislation guaranteeing the sickness benefits bill would rise to £100bn a year.

“The Labor Party has given up. They have given up on making savings on welfare altogether in the Timms Review, just as their own internal review now warns that the cost of PIP payments will continue to spiral out of control.”

“The budget deficit will double thanks to the decisions made by this weak Labor Government.”