Shadow Chancellor Oliver Letwin’s proposals would give tax breaks to companies that offer access to financial advice for their staff.
He highlights what he considers to be complex and unfair areas of taxation – council tax, inheritance tax, stamp duty, income tax and National Insurance thresholds, taxation of savings and pensions, taxation of small businesses, capital gains tax and environmental taxes.
The proposals would see a lifetime savings account introduced where the Government would match individual contributions.
Letwin wants to increase tax-free annual limits for Isas, which were threatened with cuts in last year’s Budget, and to make Isa saving more flexible.
The Tories would consider restoring dividend tax credits on pension funds, cut the basic rate of tax on savings income and introduce tax credits to encourage employers to make pension contributions.
Pilot schemes offering intranet access to financial advice within companies have already been launched by financial firms such as Aegon.
Some trade bodies, including the IMA and the Building Societies Association opposed Chancellor Gordon Brown’s plans to cut Isa limits. In the pre-Budget announcement last December the Isa limits were extended until 2009.
Letwin says: “A strong savings culture is essential to give people security for the future and independence from the state. The decline in our savings ratio has been combined with a strong increase in debt.”