Penalty for hard work is not what new Conservative voters were looking for

Dave from Bolton made a compelling case as to why he voted Conservative in a recent party video. He said: “I want to be able to have my own business. I want to be able to work hard and get rewarded for that and it felt like the Conservative Party was really speaking to what I wanted to do and where I wanted to be in the next five to 10 years.”

Great stuff. So it’s crucial that the Government doesn’t punish people like Dave when he does succeed.

Which makes stories about tax raids on the better off a little concerning – telling people they’ll have to cough up when they do well doesn’t seem to be what people like Dave voted for.

There is reportedly a keen Treasury eye on the pension relief enjoyed by higher-rate taxpayers. As long as the amount they save in a given tax year is less than £40,000 and the total they’ve ever contributed has not yet reached £1,055,000, no tax need be paid on what they put into their pot.

Meanwhile, those on modest incomes are taxed as soon as they earn just £166 a week. When put like that, it’s hard to argue with the case for looking again at exemptions on tax for high earners. The only problem is that when you do look at it again, not only does tax relief for pension contributions make a lot of sense, the prospect of further restricting it clearly becomes a very bad idea.

Ignoring a few restrictions such as the £40,000 annual limit, broadly speaking UK pensions are taxed in an ‘EET’ manner: contributions into pension funds are exempt; returns the funds earn during the investment period are exempt; but then at the end the pension, payments received by pensioners are taxed. This is one of the two logical ways of treating tax on pensions, the other being ‘TEE’: pension contributions are paid from already-taxed income, making the eventual pension payments tax-free.

The proposals make for an ugly mess: half taxed on the way in, exempt (for now) within the fund and then largely taxed on the way out.

Concerning too are the discussions about raids on property and other assets. It seems a misunderstanding of what the Tories’ new voters were looking for. They may be new converts

‘They may be new converts to the message, but they still expect the Tories to be the ones backing them when they succeed’

to the message, but they still expect the Conservatives to be the ones backing them when they succeed.

Levelling up doesn’t mean cutting other people down.

Given we know higher tax levels depress the economy and the UK has a problem with its low savings ratio, the last thing this chancellor should be contemplating is another tax rise.

Our landmark polling has shown that working-class voters are remarkably favourable to pro-ambition policies. Almost 70 per cent of those polled support linking tax thresholds to inflation or wage growth. These voters don’t want the tax system to punish those who are doing well.

Voters across the country broadly want the same thing: a prosperous, thriving economy where jobs are plentiful, homes affordable and the cost of living low. You get that by cutting taxes, not inventing new ones – especially not on pension investments by people doing the right thing and saving for their futures.

Going after these savings might mean a quick buck, but voters like Dave won’t thank them for it.

John O’Connell is chief executive of the TaxPayers’ Alliance