Jeremy Hunt loses it with Amol Rajan in fiery Radio 4 interview
Jeremy Hunt insisted the Government has done an “enormous amount for pensioners” after economists claimed older voters are the biggest losers from the Budget.
The Chancellor insisted senior citizens have been “really prioritised” through the triple lock that has put up the state pension by record levels.
Economists claimed analysis of all tax and benefit policies since 2019 shows households headed by someone aged 18-45 will gain £590 on average while those over 66 face an average loss of £770.
Mr Hunt said that ultimately growing the economy will help increase the state pension.
He added: “We’ve done an enormous amount for pensioners. This Government introduced the triple lock… we have really prioritised pensioners.”
Jeremy Hunt faces pensioner Budget backlash (Image: House of Commons)
The Chancellor announced a second 2p cut to national insurance in the Budget at a cost of £10 billion.
But while the total reduction of 4p in the pound amounts to around £900 extra a year for workers, it does not help pensioners.
Institute for Fiscal Studies analysis found pensioners will be substantial net losers as a result of the budget. More than 60 per cent of pensioners will now pay income tax and most of them will be £650 a year worse off by 2027.
That increases to more than £3,000 a year worse off if they are higher rate taxpayers.
IFS director Paul Johnson said the Chancellor had used “smoke and mirrors”.
He said the Conservatives and Labour are engaged in a “conspiracy of silence” about what will happen to the public finances after the election.
“Government and opposition are joining in a conspiracy of silence in not acknowledging the scale of the choices and trade-offs that will face us after the election,” he added.
“They, and we, could be in for a rude awakening when those choices become unavoidable.”
Counter the narrative that pensioners always win.
A worker on £25k has seen big direct tax cuts since 2010, pensioner on same income has seen taxes rise.
NI cuts only help workers of working age.Note also higher earners haven’t gained. Direct tax changes have been progressive https://t.co/QoVivcVDN1
— Paul Johnson (@PJTheEconomist) March 7, 2024
The left wing think tank Resolution Foundation said this is the first parliament in modern history set to see a fall in living standards with real household disposable income to fall by 0.9%.
Chief executive Torsten Bell said it has been a “frenetic few years” for tax policy with several rises and cuts in tax with middle earners coming out on top.
“The biggest group of losers are pensioners, who face an £8 billion collective hit,” he added.
“Looking at all policy changes announced this parliament reinforces the sense that the Government has reversed course from the approach that dominated during the 2010s.
“This time it is those aged over 65 and on the highest incomes who are set to lose most.”
Mr Bell said while Budgets are a big day for Westminster, the “big picture” for Britain has not changed as it stays a nation where taxes rise and incomes “stagnate”.
“Big tax cuts may or may not affect the outcome of that election, but the task for whoever wins is huge,” he said.
“They will need to both wrestle with implausible spending cuts and also restart sustained economic growth – the only route to end Britain’s stagnation.”
Silver Voices criticised the Chancellor for failing to mention pensioners at all in his Budget speech.
Director Dennis Reed said: “If this was a pitch to floating voters it failed miserably in respect of senior citizens.
“The Budget was a blank page for 12 million older voters. In appealing for the votes of working families, the Chancellor has taken older voters for granted.
“The Conservatives will have to do a lot better than this in their election manifesto if they want to appeal to the Silver Vote.”
Mr Hunt announced at the Budget that his long-term ambition is to abolish national insurance.
But he said yesterday that plan to scrap the remaining 8p in the pound work tax will not happen “any time soon”.
He told Times Radio it is a “huge job”.
“I don’t think it’s realistic to say that’s going to happen any time soon,” the Chancellor said.
He suggested the Government could potentially “merge” national insurance and income tax.
But there are a number of obstacles that would need to be cleared first, including how to deal with the fact that pensioners pay income tax but not national insurance contributions (NICs).
Income tax raised around £251 billion in 2022-23, while national insurance brought in around £177 billion.
Prime Minister Rishi Sunak insisted the change would only be made “responsibly”.
He said: “I think what people can see from me, I think they trust me on these things, is that I will always do this responsibly.
“We funded our current tax cuts responsibly, borrowing hasn’t increased, we are still on track to meet our fiscal rules that have our debt falling.
“We have also made sure that we keep investing in our public services, especially the NHS which received even more funding yesterday which was welcomed by the NHS CEO.
“And that’s what you get when you stick to a plan. We can invest in the NHS, we can cut people’s taxes and we can continue to have our debt on a falling trajectory.”
“Has your Budget come close to meeting the scale of the challenges this country faces?”@AmolRajan lists a stagnant economy, creaking public services and a reliance on foreign labour.
Jeremy Hunt says he ‘believes it has’ and calls the characterisation ‘unworthy of the BBC’.
— BBC Radio 4 Today (@BBCr4today) March 7, 2024
Shadow chancellor Rachel Reeves said talk of abolishing NICs altogether was “irresponsible”.
She said: “You get rid of national insurance altogether, that’s a cost of £46 billion every single year. And I think it is really irresponsible to start making promises without the faintest idea of where the money’s going to come from.”
Institute for Fiscal Studies director Paul Johnson said the Chancellor had used “smoke and mirrors”.
He said the Conservatives and Labour are engaged in a “conspiracy of silence” about what will happen to the public finances after the election.
“Government and opposition are joining in a conspiracy of silence in not acknowledging the scale of the choices and trade-offs that will face us after the election,” he added.
“They, and we, could be in for a rude awakening when those choices become unavoidable.”Jere
