CLAWS ARE OUT
Labour want YOU to pay £1,000 ‘Retirement Tax’ on your pension for first time in history, top Tories blast
Labour call the move "desperate" in battle for the grey vote
LABOUR have refused to back a £295 tax break for pensioners - with the Tories branding them backers of a “Retirement Tax”.
The Conservative plan to take state pension out of income tax was branded a “gimmick” by Labour - who have ruled out meeting the £2.5 billion pledge.
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Prime Minister Rishi Sunak has vowed that the state pension will never be taxed under the Conservatives under his ‘Triple Lock Plus’ plan.
Without adjusting the threshold, pensioners would be taxed on their state pension for the first time during the next Parliament.
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Every weekday Sun Political Editor Harry Cole brings you the latest news and analysis from the election campaign trail.
On today's episode, The Sun’s expert team predicted Labour's manifesto will be as light as a korma.
Harry said: "Starmer is going for the vibes feel. It's all about presentation.
"It's shirt sleeves rolled up, big change sign. But there's no policy - it's incredibly policy light."
Deputy Political Editor Ryan Sabey added: "The manifesto will be policy light - it will be very, very thin.
"They just don't need it. They're nearly there. They're nearly going to seize power.
"So all they need to do is actually get over the finishing line."
But Sun on Sunday Political Editor Kate Ferguson warned the "cynical" move could backfire.
She said: "I remember a frontbencher telling me a few months ago what they thought the Labour manifesto would be on a curry scale.
"They said it's going to be a korma, not a vindaloo."
Harry also dubbed Sir Keir Starmer as his Villain of the Day after the Labour leader described himself as a "proud socialist".
He said: "Do you believe that? The socialists in the Labour Party don't think he's a socialist."
"Starmer's doing everything he possibly can to distance himself from Jeremy Corbyn - and there he is singing The Red Flag."
Kate said: "The point of Keir Starmer is that he's not singing The Red Flag."
But Harry said: "Well, then why say it? Say 'I'm a progressive' - why hark back to that ideology? It's a bit of slippery slope."
Kate said: "It's two things. You cannot, as Labour leader, say in the general election 'I'm not a socialist'.
"It would just be anathema to your base and to most of your supporters.
"The definition of 'socialist' has certainly moved, too. Very convenient."
Under the plan, the state pension will be protected by the triple lock AND the tax free allowance for pensioners will also be protected the same way.
It will mean pensioners will have nearly £2,000 more by 2029 than they do today under the proposals.
Next year alone, pensioners will receive a £100-a-year tax free allowance and an increase in the state pension of £428.
By the end of the next Parliament, the state pension will be up by £1,677 a year and the income tax cut will be worth £275.
Labour have committed to the triple lock but havent given the green light to the tax threshold going up as well which the Tories say will cost pensioners around £1,000 in total by the end of the next Parliament.
Treasury Minister Laura Trott said: “Labour have decided not to match our commitment to increasing personal tax thresholds for pensioners, dragging thousands of pensioners into a new Retirement Tax.
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“This means that under a Labour government people on the basic state pension will be taxed for the first time in history.
“The choice is clear: stick with the Conservatives who have a clear plan and have taken bold action to ensure dignity in retirement, increasing the state pension by £3,700 since 2010 in cash terms, meaning pensioners are £900 better off every year.
“Or go back to square one with Sir Keir Starmer and the Labour Party.”
The policy will cost £2.4 billion a year by 2029/30 and be funded by clamping down on tax avoidance and tax evasion.
Both the state pension and the tax free allowance will go up in line with the higher of average earnings, inflation or 2.5 per cent.
Labour's Jonathan Ashworth said: “Why would anyone believe the Tories and Rishi Sunak on tax after they left the country with the highest tax burden in 70 years?
“This is just another desperate move from a chaotic Tory party torching any remaining facade of its claims to economic credibility.
But Paul Johnson, director of the Institute for Fiscal Studies, said it was “simply a reversal of a tax increase that the Conservatives proposed”.
He told the BBC: “Pensioners used to have a bigger personal allowance than people of working age - it was the Conservatives who got rid of it.
“So this is one of many examples actually of tax policy that has been reversed by the same Government.
"George Osborne got rid of it in the 2010s when the personal allowance of people under pension age continued to rise.
“So one of the consequences of that, actually, is that the point at which pensioners currently start to pay tax is below where it was in 2010, whereas the point at which the rest of us start to pay tax is well above where it was in 2010.
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“Secondly, it’s worth saying that in part, looking forward, this is simply a reversal of a tax increase that the Conservatives proposed.
“The idea is that the allowance doesn’t rise at all in line with inflation for the next three years. So half of the cost of this is simply not imposing the tax increase that was previously proposed.”
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