As the next Labour Budget looms, pensioners are in the firing line again.
Andy Burnham has been urged to tax pensioners hard (Image: Getty)
And once again, the attack comes from one of those leftie think tanks that spends its days dreaming of ways to drive our taxes to fresh highs, while splashing still more on benefits and green tech. They’ve developed a thing about pensioners. Tax-wise, they want to hit them for six. It’s almost as if they want to start an intergenerational war. Or perhaps it’s revenge, because pensioners have learned the hard way never to vote Labour.
When Torsten Bell was top dog at leftie think tank The Resolution Foundation, he was all over pensioners. He wanted to tax their homes, savings, capital gains and inheritances, and axe the triple lock to boot. He’s been keeping his head down since being made Labour pensions minister. Now the Institute for Public Policy Research (IRRP) has taken up the challenge. It’s been dubbed Labour’s favourite think tank.
The IPPR has just called on Andy Burnham to shift the tax burden from workers to pensioners, to fund the costs of our ageing population. Like almost everybody on the left, it wants to slap new taxes on our homes. It also wants to hike capital gains tax rates to bring them into line with income tax. And that’s just for starters.
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The IPPR has just called for Burnham to slap National Insurance on older workers. It proposes applying the 2% National Insurance rate to the earnings pensioners get from a job, provided their total income is above the £12,570 personal allowance. This isn’t a new idea, former Tory PM Boris Johnson was preparing to do it, at a lower rate of 1.25% to fund social care. The charge was later dropped.
Rest assured, that if pensioners do ever to have to pay NI, that initial 2% charge would probably rise over time, and possibly apply to ever more income.
Ben Ansell, a professor at the University of Oxford and author of the paper, argues that the tax system had increasingly shifted responsibility towards younger workers while protecting retirees who have benefited from decades of rising property and asset wealth. As the population ages, pensioners must pay.
A couple of decades ago, everybody was worried about pensioner poverty. Today, the left seem to think pensioners are all sipping daiquiris in their second homes.
That’s why Rachel Reeves thought it would be fine to withdraw the winter fuel payment, failing to realise that this would hit single pensioners on as little as £11,350 a year. The backlash sank Reeves and Keir Starmer‘s before they’d got going. Another tax onslaught on pensioners would sink Burnham. I’m hoping he’s too sensible.
A better way to help young people would be to reverse Reeves’s disastrous £25billion “jobs tax”, which is wiping out entry-level jobs. And revamp the benefits system to encourage work. Too often, it locks claimants out.
We’re all worried that young people can’t get on the property ladder. But nobody on the left accepts our housing shortage might have something to do with the fact that Britain’s population has increased by roughly 10million since the turn of the century, largely due to immigration. They refuse to see any link.
The problem with these reports is that they’re produced by left-wing academics who only hobnob with like-minded middle-class lefties. Most wouldn’t descend to talking to older working-class pensioners who have laboured for decades and still find themselves scratching around for every penny in retirement.
The left treats accumulated wealth as evidence of privilege, when for the vast majority of pensioners, it’s the product of a lifetime of sweat, saving and mortgage servicing. Labour simply treats them as cash cows. With luck, Burnham won’t take this report seriously. There’ll be another one along in a minute.