‘Don’t hammer grandparents!’ Rachel Reeves issued stark tax warning | Politics | News
Rachel Reeves has been warned not to “hit” pensioners by extending the freeze on tax thresholds after a U-turn on plans to raise income tax. The Chancellor threw markets into turmoil last week when he surprisingly abandoned a long-planned plan to increase the main rate of income tax.
But the move has left campaign group Silver Voices fearing he will still be digging into pensioners’ pockets to fill his £20bn financial black hole. It is now thought Ms Reeves will raise billions of dollars by freezing income tax thresholds for another two years; This, paired with the Triple Lock, will see almost all recipients of the basic state pension paying income tax by the next election. The Chancellor is also believed to be considering lowering the income tax threshold, further jeopardizing the household finances of older Britons.
Warning that freezing the thresholds would be a “blatant breach” of Labor’s manifesto tax commitments, Dennis Reed, director of Silver Voices, warned Ms Reeves needed to “wake up and smell the coffee”.
He told the Express: “We now fear an extension of the freeze on lower tax thresholds or even a reduction in personal allowances. Both measures would be a clear breach of the Manifesto commitment and would squeeze the living standards of older people on low and modest incomes intolerably.”
“We’re calling on the chancellor to wake up and smell the coffee, the public doesn’t want you to beat up their grandparents.”
An online petition calling for tax thresholds to be raised to prevent pensions from being eligible for income tax has reached 175,000 signatures two weeks before Ms Reeves’s second budget.
An HM Treasury spokesman said: “We do not comment on speculation about tax changes other than financial matters.”
Silver Voices welcomed Ms Reeves abandoning plans to breach Labour’s manifesto by increasing income tax by 2 percentage points while cutting National Insurance by 2 percentage points.
This policy would not leave working-age people worse off, but would shift the burden onto pensioners who pay no income tax but National Insurance.
Mr Reed previously warned: “Confidence is at an all-time low following the winter fuel debacle, social care reform and a betrayal of the women of the 1950s.
“Since coming to power, no senior government figure has spoken out acknowledging the cost-of-living struggles of low- and modest-income older people. It’s always about ‘working families’ and to hell with the rest of you.”
