Sign up to the Inside Politics email for your free daily update on the biggest stories in UK politics
Get our free Inside Politics email
Rishi Sunak and Jeremy Hunt are planning a secret tax raid on pensions as part of a bid to balance the books and restore Britain’s financial credibility, according to reports. The prime minister and chancellor are looking to find tens of billions a year to plug a hole in the public purse, with a mix of tax rises and spending cuts being considered to boost market confidence after the devastating impact of Liz Truss’s unfunded mini-budget. Reports say much of the money could be raised through so-called stealth tax rises that allow people to be tricked into paying more to the Treasury without ministers having to take the political hit of announcing a rate rise. Rishi Sunak and Jeremy Hunt have delayed their financial statements until later this month (PA) One measure to be unveiled later this month is a lifetime pension freeze, according to the Daily Telegraph. Two million savers would be left paying more under a plan to delay raising the tax cap on pension funds, the newspaper reports, at a time when the future of the pension triple lock remains unclear. The lifetime pension limit is frozen at £1,073,100 until 2025, with savings above the limit taxed at 55 per cent if the money is taken as a lump sum, or 25 per cent plus the income tax rate if paid in stages. The reported plan would extend that freeze for another two years. Mr Hunt and Mr Sunak risk alienating large sections of their party with a series of tax rises, hidden or otherwise, planned for the chancellor’s budget statement on November 17. The pair are believed to have agreed a 50-50 split on tax rises and spending cuts to reduce borrowing, although they have been warned by the United Nations against a return to the austerity imposed during the Conservatives’ previous 12-year term. in charge. Tax increases and spending cuts are expected to be part of the announcements on November 17 (AFP/Getty) Other tax threshold freezes, affecting different rates of income tax and national insurance, and an increase in capital gains tax have already been agreed, the Telegraph reported. It comes after Mr Sunak said inflation was “enemy number one” as he vowed to rebuild confidence in the government after Liz Truss’ disastrous tenure in No 10. With the UK facing a £50bn black hole in its public finances, Mr Sunack told The Times it was important the government was honest with voters about the “trade-offs” the country faced in the upcoming autumn statement of Mr. Hunt. “Everyone appreciates that government can’t do everything,” he said. “How does the government do it all? It simply does so by borrowing money which eventually leads, as we have seen, to high inflation, loss of credibility, soaring interest rates. “I fully recognize that confidence has been damaged in recent weeks and months. I realize that trust is not given, trust is earned. My job is to regain people’s trust.”
