Prime Minister Gordon Brown has repeated what the Labour press office claimed was a “slip of the tongue” by suggesting that higher-rate pension tax relief will be restricted for incomes over £100,000.
Brown first indicated a change to the stated Labour party policy on restricting higher-rate pension tax relief during the final leaders’ debate last Thursday night. He said: “Our four-year deficit reduction plans include a rise in the top rate of tax above £100,000, taking away pension tax reliefs for those above £100,000 at a higher rate and a National Insurance rise.”
This appeared to signal a marked change to the current Government proposals to cut higher-rate pension tax relief for incomes over £130,000 from April 2011.
However, when quizzed about this apparent change of stance by Money Marketing on Friday, the Labour press office claimed that Brown had made a “slip of the tongue” in the debate and the current £130,000 figure remained the correct one.
But Brown then went on to repeat the same statistic on Friday night during an interview with Jeremy Paxman on BBC1.
Many in the industry exp-ressed concern after the initial Budget tax relief announcement last year that Labour would look to catch more earners with res-trictions further down the line.
Hargreaves Lansdown head of pensions research Tom McPhail says: “Clearly, the fact that Gordon Brown stated that higher-rate pension tax relief will be cut for people earning over £100,000, then reiterated that message means we have to assume that if re-elected Labour will cut tax relief for those earning over £100,000. A Lib/Lab pact will only make the situation worse because the LibDems want to scrap higher-rate pension tax relief altogether.”
Cicero Consulting director Iain Anderson says: “Whoever wins the election, pensions tax relief is going to be up for grabs and the industry needs to be ready for this regardless of the outcome.”
The Labour party would not comment on Brown repeating the £100,000 figure.