Starmer adviser says well-off older individuals should ‘contribute’

A Labour adviser has urged Keir Starmer to target well-off pensioners on the eve of the election.

Edward Troup, a former HM Revenue & Customs chief who has been advising shadow chancellor Rachel Reeves, said the older generation must ‘contribute’.

In an interview with LBC Radio, Sir Edward also insisted inheritance tax rises must be ‘on the agenda’ even though they were ‘unpopular’. 

The ex-mandarin, who has been giving advice on how to ‘modernise’ HMRC and improve compliance, stressed that he was not laying out Labour policy.

The party also insisted: ‘These are not Labour Party policies.’ 

But the intervention will fuel fresh fears that Sir Keir has much wider plans on tax than the party is currently letting on.

A Labour adviser has urged Keir Starmer to target well-off pensioners on the eve of the election

Edward Troup, a former HM Revenue & Customs chief who has been advising shadow chancellor Rachel Reeves , said the older generation must ‘contribute’

The Tories have been repeatedly warning that Labour has left loopholes in its commitments that could allow them to raise significant revenues. 

Sir Edward said this afternoon: ‘Both political parties have ruled out increasing the rates of the main taxes, so if the incoming government does want to raise money and the indication is that they will have to, one way or another, then they really do have to look at the smaller taxes.

‘And inheritance tax, it’s not a tiny tax, it’s a reasonable size tax and so inheritance tax will have to be on the agenda.

‘But it will be unpopular and the amount that can be raised, even by quite radical changes is not going to make the difference between problems with the public finances and solving the problems.

‘If you wanted to look at ways of raising money which don’t affect the economy, which obviously income tax and National Insurance do, then inheritance tax ticks a lot of boxes.’

Sir Edward said Baby Boomers – born in the 1950s – had it ‘better’ than subsequent generations.

He said: ‘I’m in this category myself, I’m a baby boomer, I was born in the fifties, I bought my house when interest rates were high, but inflation was a lot higher.

‘My income went up and paying off my mortgage became easier.

‘My generation is having it better than the generation who are currently working.

‘I don’t mean pensioners who are not well off, I mean pensioners who work and have got income – they should be taxed at least as hard as those people you know who are working of working age.’

He cautioned that an incoming Labour government will need to look at bringing in more money from somewhere.

‘I do think National Insurance contributions for those people who are continuing to work and continuing to earn after state pension age – we shouldn’t take their state pension away but we should ask why should you suddenly pay less tax?’ he said.

‘A lot of people do go on working and often full time and very remuneratively, after the state pension age. So I’d look at National Insurance.’

Sir Edward also suggested the state pension might also need to be means tested in future due to the spiralling costs to the public purse.

‘It’s a benefit which you’ve earned, but in a sense, we’ve earned all our benefits by paying tax and being members of society,’ he said.

‘I don’t think it’s wrong, it’s an income and actually, you do pay tax on it as it happens.

‘We can all think of the wealthy individuals in this country and say, well, do we think he or she should have a full state pension?

‘Or if the public finances are in a bit of a state, perhaps he or she should be giving that up? So, there is a debate to be had.

Sir Keir and Rachel Reeves have insisted their spending plans do not require any further tax increases

‘It’s not easy and I don’t hold a particular view about how we deliver something which I think, should be delivered.

‘My generation, the pensioners’ generation, if they’ve got income, if they’ve got means, should be contributing at least as much, and possibly more than those people who are working, bringing up families and are really contributing now to that country.’

Sir Edward stressed he was not advising Labour on policy.

‘The panel is looking at making HMRC work better, it’s not been looking at policy, it’s looking at how can we collect money at the taxes that are there, better,’ he said.

‘I have not been advising on policy… Any views are well away from what I’ve been discussing with Labour.’