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Senior Tory Defends Pension Tax Cut As A "Basic Decent Principle"

The chancellor of the duchy of Lancaster defended the government's pension changes. (BBC/Sunday with Laura Kuenssberg)

5 min read

Oliver Dowden has defended the government's decision to lift the £1m cap on pension pots, a move set to benefit around 1m wealthy pensioners, in the face of claims that it is a tax cut for the wealthy.

The chancellor of the duchy of Lancaster said the move was necessary to ensure more public servants like consultants police officers and senior doctors stayed in the workforce longer. 

The opposition Labour Party has attacked the move announced by Chancellor Jeremy Hunt on Wednesday as part of the Budget, claiming it is a "tax cut for the well off".

However, speaking on Sunday, Dowden said the policy was supported by health experts. 

"We had a very specific problem, and we still have it, which is when people in senior roles in the public sector - particularly people like consultants, but it's also senior police officers and others - they get caught in this trap whereby if they carry on working and earning more, they breach their pensions cap now," Dowden told the BBC's Sunday with Laura Kuenssberg.

"We were under a lot of pressure in lobbying to do something about this, from the Labour Party from the BMA [British Medical Association] and others.

"We've taken this action - and the consequence of it is we'll have more senior public sector workers working in the public sector helping delivering on our core priorities... that's cutting the waiting list because we'll have more consultants but that's getting crime under control.

"And I was very heartened by the fact for example that the BMA welcomed this and said it was transformative. So it's the right policy to address this."

Dowden also appeared to suggest allowing people who "work hard" to keep more of their money was the moral thing to do. 

"I think it's a basic decent principle that if people work hard, they should be able to save money and invest for their retirement - so I think there's a there's a basic principle there," he said.

"But the reason why we brought this forward now is because of the particular pressure to senior public service workers who we need to make sure that we deliver some of the government's core priorities."

This weekend Labour has further criticised the government's policy to remove the £1m cap on pensions, arguing that only 0.01% of the population will benefit. 

“The vast majority of pension won’t benefit from the government’s proposals because they will never get near a pension pot of more than £1 million," said Pat McFadden, Labour’s shadow chief secretary to the Treasury.

“The government should rethink this giveaway and instead focus on a scheme to deal with the early retirement problems facing the NHS.”

Later on Sunday with Laura Kuenssberg, Dowden also largely avoided weighing in on former prime minister Boris Johnson's appearance before the privileges committee in parliament on Wednesday.

Johnson is set to be grilled by the crossparty committee on what he knew about illegal parties in Downing Street during lockdown and if he misled parliament on the isuse.

"Well, this is really a matter for the House of Commons, for parliament - and it's the usual precedent that that ministers don't comment on these things," said Dowden. 

Dowden appeared to confirm reports Prime Minister Rishi Sunak is set to allow MPs a free vote on Johnson’s future if it is found he deliberately misled parliament, in a move that would likely anger backers of the former PM in the Conservative party.

"The standard practice on what we call 'house matters' - so, matters that are being led by the House of Commons that relate to these sort of things - it is standard practice not to whip the vote," said the senior Cabinet ministers.

"I'm not sure final decisions have been made, but that would be the precedent that you would expect."

Allies of the former prime minister have this weekend told The Telegraph they believe there is a "bombshell defence dossier" that will "exonerate him from Partygate". 

“It contains new evidence that helps his case,” one source close to Johnson's defence team told the newspaper. “His case is that he told Parliament what he believed to be true at the time. There is documentary evidence which will show that he was advised to say what he went on and said.”

Elsewhere, on Sky News' Sophy Ridge on Sunday, Dowden said the government will "get cracking" with deportations to Rwanda once legal challenges over the policy have been dealt with. 

Home Secretary Suella Braverman is in the east African country this weekend to promote the policy - which so far has failed to successfully deport any asylum seekers for processing and settlement due to legal challenges and has been widely condemned by human rights organisations. 

Suella Braverman in Rwanda. "We actually succeeded the High Court stages before the Court of Appeal, but as soon as that process is through, and I'm confident our policy is lawful, we will get cracking straight away with the Rwanda policy, and use that as a tool in our armoury," said Dowden.

"Essentially, what we're saying, and this comes through in the legislation as well what we announced earlier this month: 'you cannot come to this country by crossing the Channel - and if you do so, you'll either be repatriated to your home country or you'll be sent to Rwanda."

Dowden avoided answering directly when asked by Ridge why Braverman had travelled to Rwanda with largely right-wing media outlets including GB News, the Telegraph, the Daily Mail, the Sun, and the Express. 

The decision to exclude outlets who are traditionally more critical of government policy has been criticised by journalists who have argued it is an attempt by the government to avoid scrutiny. 

"I simply don't know the details of individual operational decisions - but I'm very happy, because I'm confident that under Rishi Sunak as our prime minister, we are gripping this problem," said Dowden.

"We're taking difficult decisions as you rightly highlighted, but we're determined to stop this evil traffic continuing."

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