Labour is going to war on pensioner wealth

They are “codgers” who are “undertaxed”. And they should all be bundled into a cruise ship, and tossed into the ocean, while tax officers summarily seize their houses and pensions.

Okay, it is possible I made that last one up. But otherwise that is a fair summary of the views of Sir Edward Troup, the former head of HMRC who the shadow chancellor Rachel Reeves has appointed as an adviser on tax policy. We can all agree or disagree with the analysis. And yet one point is surely clear. An incoming Labour government is seemingly planning an all out war on pension wealth - the only real question is where it attacks first.

With a formidable CV, Sir Edward probably seemed a perfect choice to advise on tax policy. Unfortunately, it turns out that at an event hosted by the Resolution Foundation, Sir Keir Starmer’s favourite think tank, in 2019 he dismissed pensioners as “undertaxed…codgers” who should be made to finally start paying their fair share. With his appointment, the mask of fiscal responsibility has slipped. Labour plans to tax the elderly more.

In fairness, it probably doesn’t have much choice. The party has made a series of rash spending pledges, it has no idea how to lift growth above zero – indeed many of its policies will likely keep it stuck there for years – and it has promised to balance the books.

It is terrified of the market reaction if it increases borrowing significantly, triggering a Truss-style meltdown. With so little room for manoeuvre, it will have to cut spending somewhere, and raise extra revenue as well. Pension wealth is the obvious target.

It is not hard to work out what it might do. Scrapping perks such as the winter fuel allowance will just be the start. After an in depth review, perhaps even chaired by an “independent” expert such as a former head of HMRC, it may well scrap the triple lock. If it froze the state pension, in line with the freeze on income tax thresholds, it could steadily reduce its real value by three or four per cent a year, or a fifth over the term of a Parliament. Meanwhile, it has already outlined plans to force pension funds to “invest” in its preferred industries.

Next, it could start charging National Insurance for anyone still working over retirement age, conveniently ignoring the fact that we should be encouraging people to work for longer instead of punishing them.

And if it wanted to raise some serious cash, it could replace inheritance tax with a levy on all lifetime gifts, and impose capital gains tax on the sale of your main home at the same time. It could even go the whole way, and impose a fully fledged wealth tax, along with an exit charge on anyone who tries to get out of the country. They have never worked anywhere they have been tried, but no doubt Sir Edward and his colleagues have a clever plan for making a levy stick this time.

Sure, a few of those “codgers” might complain. But they vote Tory or Reform anyway, so Labour doesn’t need to take them too seriously. It is hard to understand how elite mandarins such as Sir Edward can honestly believe that anyone in the Britain of 2024 is “undertaxed”.

And yet the Left has been building a narrative for at least a decade of intergenerational inequality, which, with grim inevitably, it then argues can only be fixed by yet more state intervention.

As it happens, it is not really true. In reality, a stagnant economy is tough for all, regardless of how old one happens to be. But with the appointment of Sir Edward at least Labour’s strategy is clear. It will raid pension wealth again and again  – until it bankrupts a whole generation.