BudgetMar 16 2023

Starmer: LTA abolition 'huge giveaway' to the wealthy

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Starmer: LTA abolition 'huge giveaway' to the wealthy
(Aaron Chown/PA Wire)

In response to the Spring Budget, Labour leader Sir Keir Starmer said although a fix for doctors was needed, abolishing the lifetime allowance will only benefit the very wealthy.

Speaking in the House of Commons yesterday (March 15), the leader of the opposition party criticised the new pensions and tax changes in the Budget, saying a succession of Conservative governments has left the British economy “the sick man of Europe once again”.

“The Tory cupboard is as bare as the salad aisle in our supermarkets: the lettuce may be out, but the turnips are in,” Starmer told MPs in response to the Spring Budget.

Referring dismissively to last September’s “kamikaze” budget, Starmer said that chancellor Jeremy Hunt’s opening boast boiled down to “things aren’t quite as bad now as they were in October last year”. 

Pensions and tax

Starmer said that Hunt’s announcement to abolish the pension lifetime allowance will benefit only “those with the broadest shoulders”.

“We needed a fix for doctors but the announcement today is a huge giveaway to some of the very wealthiest,” he said.

“The only permanent tax cut in the Budget is for the richest 1 per cent. How can that possibly be a priority for this government?"

And on Hunt's tax changes, Starmer said, “real stability means tax doesn’t go up and down like yo-yos”. 

Claiming that Conservative governments have changed corporation tax 22 times during their long period in power, he warned that businesses will question how long it will take before the wind blows in the other direction again.

Hunt could have used “sensible” taxation policies on non-doms to relieve the tax burden on working people, Starmer said, separately adding that Conservatives had missed the opportunity for a proper windfall tax. 

“Even the former CEO of Shell admitted that they should be paying more,” Starmer said.

The chancellor’s commitments

Yesterday the chancellor scrapped the pension lifetime allowance and uplifted the money purchase annual allowance to encourage people to stay in work longer.

He also increased the pensions annual allowance, changed rules around cryptoasset tax returns, and doubled the tax fraud prison sentence.

The OBR said the UK narrowly avoided a technical recession, signalling a retreat from its gloomy November forecasts, and from Hunt’s admission at the last financial statement that the country’s economy was already in recession.

But debt will fall by “only the narrowest of margins in five years’ time,” the OBR added after the chancellor’s speech 

The near-term downturn is set to be shallower, the OBR said; the budget deficit will be lower but “persistent supply-side challenges remain”.