Jeremy Hunt is lining up another tax cut. This time pensioners must benefit too
So Jeremy Hunt is hinting that he might cut taxes again this year. Is there any election looming or something?
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When Hunt was appointed chancellor in October 2022, he made a virtue of hiking taxes to bring their nation’s deficit under control. Yet with the Conservative Party staring down the barrel of the next election, he's suddenly doing a reverse ferret and claiming to be a tax cutter instead.
Yesterday, Hunt insisted it's now the government's "absolute priority" to bring the tax burden down. Which is hard to swallow given that 14 years of Tory rule has driven the UK tax burden to a 70-year high.
Still, that's politics. The big question is, what tax will Hunt cut next? He's already slashed NI twice this year, in a boost for 27 million workers.
Unfortunately, that has done nothing for the nation’s 12.5million pensioners, because people don’t pay NI after they hit state retirement age.
While Hunt has previously talked earlier of his dream to abolish NI altogether, that shouldn't be his priority today.
He needs to spread his net wider, and do something for pensioners, who have been hammered by the cost-of-living crisis.
Older people spend a greater proportion of their income on essentials like food and fuel, which have rocketed fastest.
Pensioners don't pay NI, but they do pay income tax. The six-year freeze on income tax thresholds is hitting them particularly hard.
The full new state pension now pays £11,502 a year, which means they only need to earn £1,068 from other sources to breach the £12,570 personal allowance.
Some older pensioners on the basic state pension who have built up additional state pension on top already exceed the personal allowance.
As the income tax threshold freeze drags on, their numbers will grow.
In total, nine million pensioners will pay income tax this year, more than double the number who paid in 2010, when the Tories came to power.
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This is a cruel irony, given that pensioners are more likely to vote Conservative than any other age group. What have they got in return for their loyalty?
Making sure the older generation benefits from Hunt’s next tax cut isn't just basic fairness. It makes political sense, too. There is still a chance that many pensioners will return to the Tory fold, once faced with the alternative of a Labour government led by Keir Starmer.
Yesterday, the chancellor insisted that it will always be the Tory party who champions pensioners. Well it’s time he showed it by cutting a tax they actually pay, rather than one they don't.
