Pension reform will improve retention in police ranks

JEREMY HUNT’S pension reforms are a “game changer” which will keep officers fighting crime, the country’s most senior police commissioner said last night, as Labour came under pressure not to reverse the Chancellor’s plans.

The chairman of the Association of Police and Crime Commissioners said Mr Hunt’s decision to scrap the rule that means people must pay tax if their pension pot exceeds £1.07million is “essential” to persuading senior officers not to take early retirement.

Marc Jones warned that the previous system, which Sir Keir Starmer has pledged to return to, would “disincentivise officers from working longer”.

The call came as senior business leaders pleaded with the Labour leader not to go forward with his plans to reinstate the lifetime pensions allowance if he wins the next election. Sir Martin Sorrell, executive chairman of S4 Capital, said the party was making a “mistake”.

Teachers’ leaders are demanding an exemption to ensure their pension pots are not taxed under Labour’s plans, while the union representing nuclear inspectors, chief fire officers, air-traffic controllers and electrical engineers warned the party to think again.

Sir Keir also came under pressure from his own grassroots, after two polls showed Labour supporters backed the scrapping of the lifetime allowance.

A survey by Omnisis found that 60 per cent of the public support abolition of the lifetime allowance, as do 58 per cent of Labour supporters.

Another poll by BMG for the i newspaper found that lifting the cap on taxfree pension savings was backed by 38 per cent of the public, with 20 per cent against and the rest “don’t know” or neutral. Among Labour voters, 33 per cent are in favour, 30 per cent opposed and the rest “don’t know” or neutral.

Prof John Curtice, a leading political scientist, said: “Voters seem to support the one proposal to which Labour has objected – increasing the amount people can save in their pension pots without incurring a tax bill.

“The decision to attack this change may not resonate as strongly with voters as Labour assumes.”

Mr Hunt announced in his Budget on Wednesday that he would get rid of the current system under which people are charged tax if their pension pot exceeds £1.07 million.

A day later, Labour pledged to reverse the policy if it wins the next election, saying it only benefited the top “1 per cent”.

Mr Jones, who is also a Tory police and crime commissioner for Lincolnshire, wrote to the Chancellor to say the scrapping of the allowance would “assist forces up and down the country to retain the best and most experienced police officers and staff and therefore protect the public”.

He wrote: “From the many conversations I have had with experienced police officers around the country, removing the cap on pensions by abolishing the Lifetime Allowance and increasing the Annual Allowance of taxrelieved pensions savings from £40,000 to £60,000 will be a game changer for thousands who love their jobs and do not want to retire.”

A Labour spokesman said: “Instead of a serious plan the Tories have just given a billion pound tax break to some of the wealthiest in society.”