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Labour attacks Osborne over ‘shambolic’ death tax announcement

Labour has attacked Chancellor George Osborne’s “shambolic” handling of the abolition of the 55 per cent pensions “death tax”.

Osborne chose to make the reform, which was due to be revealed in the Autumn Statement in December, the centrepiece of his Conservative Party conference speech last week.

The initial Treasury announcement, and pre-briefings to the national press and sections of the industry, explicitly said annuities and scheme pension would be excluded from the reforms. However, Money Marketing subsequently revealed people with value-protected annuities will in fact be able to take advantage of the tax cut.

The share prices of a number of specialist annuity providers, including Just Retirement, slumped on the back of the partial announcement before rebounding as details of the reforms emerged.

Speaking to Money Marketing, Labour shadow financial secretary Cathy Jamieson says: “In keeping with most of the other announcements at the Tory Conference, George Osborne’s announcement of the abolition of the 55 per cent tax on pension funds at death was rushed and shambolic.

“The Treasury initially said the changes will not apply to annuities; now it turns out that they will apply to some annuities.

“This error led to confusion in the equity markets and a slump in the share prices of some annuity providers.

“This is not an isolated incident – Government pronouncements on pension reform have been riddled with confusion and error. First, George Osborne said people would receive advice. Then it turned out he meant guidance. Then we were told the guidance would be face-to-face. Then we were told it might not be. And we still don’t know enough about what the guidance will look like in practice.

“These reforms will have huge implications for savers and it is vital the Government gets them right. That is why Labour set out three clear tests to judge them by – advice, fairness and cost. At the moment, the Government is failing on every level.”

It is not the first time the Chancellor has been caught up in a botched policy announcement. In April, Osborne wrote to FCA chairman John Griffith-Jones saying he was “profoundly concerned” a pre-briefing of information about a review of closed-book providers had caused “considerable disruption in the trading of insurance shares”.


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There is one comment at the moment, we would love to hear your opinion too.

  1. Most of this summer I have been working hard as have my clients. Across the road from our offices has been three scumbags, never worked in their lives, drinking cider and shouting at our clients and us when they enter the office. The police are powerless to do anything. They have been sitting there, drinking, playing load music and laughing at us. They have been shouting we are fools to be working, we should take the easy life they have. They have even thanked us for paying for their cider, TV (which they had outside) and rent. They have called us fools, a word similar to Bankers and much more.

    So, to Labour who have created this problem, given these individuals this opportunity I say the following. I would prefer to give the tax revenue saving to people who will use it to create greater wealth, jobs and prosperity, then give it to the likes of the above.

    I have no problem in supporting those in need, but I am fed up of seeing unemployed neighbors of mine on holiday when I take a well earned break, who have the same life style almost as me, but do sod all for it.

    I also agree with the benefits card so they cannot purchase, cigarettes, alcohol and plasma TV’s. I personally would go one step further and require them to attend a class to apply for work, take qualifications to gain work from 9am to 5pm daily. In this way they might actually go out and find a job.

    If you give these individuals enough there is NO incentive for them to work, they will sit at home. Take a look at the welfare bill for the UK and then look at the deficit.

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