Keir Starmer accused of ‘hypocrisy’ over pension tax avoidance

Jeremy Hunt defends pensions tax break

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Sir Keir Starmer has been accused of hypocrisy over his pension deal from his time as Director of Public Prosecutions. The deal allows him to avoid tax on his savings. This comes after the Labour leader urged his MPs to vote against a key aspect of Jeremy Hunt’s Budget in an attempt to prevent wealthy savers from avoiding tax on their pensions.

In his budget last week, Jeremy Hunt abolished the Lifetime Allowance on pensions – a cap which dictates how much money people can save before they pay tax.

According to the Telegraph, Sir Keir’s pension from his time as Director of Public Prosecutions (DPP) is exempt from tax rules he would apply to other workers who save more than £1m.

The Labour leader has criticised the Chancellor for what he called a “huge giveaway to some of the very wealthiest” in his budget.

Tonight, Sir Keir led 176 Labour MPs to vote against the change.

His party has also pledged to reverse it if it wins the next general election.

A Government insider told “Looks like Starmer benefits from a bespoke, one-man CPS pension plan that is exempt from the Lifetime Allowance.

“Tonight, his Labour MPs voted to deny that very same benefit to thousands of doctors, headteachers, police chiefs, senior Armed Forces personnel and more.

“Sir Keir is more than happy to tax experienced public servants into early retirement – and keep the benefit all to himself.”

Mr Hunt was expected to raise the current cap from £1.07million to £1.8million.

However, he revealed he wouldn’t do that, despite demands, and was instead abolishing the cap altogether.

Mr Hunt also announced the Government is to raise the annual allowance people can save each year before being taxed, from £40,000 to £60,000.

The centre-right Centre for Policy Studies think-tank said the Government’s previous decision to lower the pensions cap from £1.8 million in 2011 to £1.07 million by 2016 has “hastened the retirement of some older workers.”

Some Tory MPs had called the current tax-free allowance limit a “doctor’s tax”, because it was encouraging health professionals in their constituencies to quit early as they could no longer save tax-free.

Sir Keir benefits from a one-man “tax-unregistered” pension scheme, which means the lifetime allowance does not apply to his contributions from his time as DPP between 2008 and 2013, when he earned almost £200,000 a year, the Telegraph reported.

The Labour leader was the only member of the pension scheme, which had tax benefits that “broadly” matched those enjoyed by judges.

The scheme was disclosed in Crown Prosecution Service accounts signed by Sir Keir.

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After Sir Keir stood down as DPP, the Government passed secondary legislation – titled the Pensions Increase (Pension Scheme for Keir Starmer QC) Regulations 2013 – which ensured the Labour leader’s pension was increased each year to keep pace with rising prices.

The arrangement allows him to continue to save money from his salary as an MP and any future salary as a Government minister for longer without incurring a tax bill.

Sir Keir’s civil service pension is not large enough to incur a tax charge under the pension cap system on its own, and he has not paid into it since 2013.

A Labour spokesperson told the Telegraph: “The pension rules for the Director of Public Prosecution are set by the government of the day, not the DPP themselves.”

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