Tories’ promises to raise tax threshold for pensioners a joke, Labour says

Pensioners do not believe the Tories when they say they are going to raise the tax thresholds, Labour frontbencher Liz Kendall said, as she branded the party’s promises “a joke”.

The shadow pensions secretary said the number of over-65s paying income tax has almost doubled under the Conservatives, rising from 4.5 million in 2009/10 to 8.5 million in 2023/24.

During a visit to Essex on Thursday, Ms Kendall claimed the Conservatives have worsened the quality of retirement.

Speaking from a community cafe in Thurrock, Ms Kendall said: “We’ve seen more pensioners having to retire later, having to spend out their savings, and more pensioners in poverty.”

She added: “The Tories can make all the promises that they want, pensioners here in Thurrock have said to me today they simply don’t believe them. And they’re right to say that.

“It is completely rich and a joke coming from the Tories when we have the highest tax burden in this country for 70 years.

“That’s why Labour’s commitment to change the way the economy works, to keep interests rates, inflation, mortgages as low as possible and to have that clear commitment on the triple lock.”

Asked if Labour would raise inheritance tax, Ms Kendall said the party has been “clear” it will not raise income tax, national insurance contributions or VAT.

This comes as the Institute for Fiscal Studies (IFS) claimed that the Chancellor “has made it harder to deliver growth-enhancing reforms to the tax system”.

Writing in The Telegraph, Jeremy Hunt pledged not to increase capital gains tax, stamp duty or the number of council tax bands, or “undertake an expensive council tax revaluation”.

Council tax banding in England across categories A-H is based on property values in 1991.

IFS associate director David Phillips said: “The new family home tax guarantee would mean perpetuating the increasingly absurd situation whereby the council tax that households pay is based on the value of their property relative to others in England on April 1 1991 – a third of a century ago, when Mikhail Gorbachev was president of the Soviet Union and Chesney Hawkes topped the charts with The One And Only.”

He added: “By ruling out revaluation and reform of council tax, Jeremy Hunt has made it harder to deliver growth-enhancing reforms to the tax system. Labour and other parties should not follow suit.”

Mr Phillips called for stamp duty land tax to be “abolished” – after Mr Hunt pledged not to raise it – and said: “It is one of the most economically damaging taxes levied by the Government, significantly increasing the cost of moving and gumming up both the housing and labour market.”

The IFS has previously said that all parties should give voters as much clarity as possible about their intentions for tax.

In response to this, Ms Kendall said: “We have been really honest with people: we will not raise taxes on working people. We won’t raise income tax, national insurance contributions or VAT.

“But we have said we will close those tax loopholes, scrap the non-dom tax status to pay for 40,000 extra appointments in the NHS every single week, and we’ve said we’ll get rid of those tax breaks that private schools enjoy to fund 6,500 more teachers on key subjects in our state schools.”

Prior to the visit, Ms Kendall said: “Rishi Sunak was recently asked why he hates pensioners.

“It’s not hard to see why when they have so profoundly failed pensioners, from increasing levels of pensioner poverty, to breaking their promise on the triple lock, Rishi Sunak and the Tories have worsened the quality of retirement.

“Now the Tories pose a new threat to pensioners’ living standards, with reckless unfunded spending commitments and a £46 billion tax black hole that threatens the economy and the future of the state pension.

“Combined with this is the fact that under their watch a record amount of over-65s are paying income tax.

“Retirement should be a time we all look forward to, but more pensioners than ever are renting into retirement, their children are returning home because they’re locked out of the housing market and soaring childcare costs mean pensioners are taking on more responsibilities they weren’t expecting.

“My message to pensioners at this general election is simple – look at your wallet, look at the quality of your healthcare and look at the lack of housing for your children and grandchildren and ask yourself, is this as good as it gets?”

The party claimed the rise in the number of pensioners paying income tax is because of freezing of income tax thresholds and people needing to work later in life, adding that Labour will “turn the page on Tory chaos with economic security and political stability”.

Conservative Chief Secretary to the Treasury Laura Trott hit back, claiming Labour “is secretly preparing more than 10 new tax rises later this year”.

She said: “The Prime Minister warned this week that Keir Starmer would put up taxes on working families by £2,094 to fill Labour’s £38.5 billion black hole.”

Ms Trott added: “Keir Starmer has a long track record of breaking pledges.

“He thinks he can coast to victory with a blank cheque then pretend he has a mandate to raise taxes, raid pensions and impose a ‘retirement tax’.

“He now urgently needs to level with the British people about which taxes he wants to increase and by how much.”