Reeves: PM and I decided ‘as a team’ not to hike income tax

Tom Selby, director of public policy at AJ Bell, said: “It’s difficult not to take the Chancellor’s ‘frustration’ over the ‘damaging’ speculation ahead of the Budget with a pinch of salt.

“Not only was this Budget preceded by a seemingly endless parade of gloomy economic warnings in what felt like the longest build-up to a fiscal event in living memory, but many of the leaks and speculation were a direct result of the Treasury’s departmental shortcomings and inability to deliver certainty for savers and investors.

“The fact the most concrete bit of pre-Budget policy positioning in the form of Rachel Reeves’ unprecedented Downing Street address to the nation, which strongly inferred that income tax rises were in the post just weeks before the Budget, ultimately came to nothing is reason alone to question today’s incredulous remarks.

“But this once again outlines one of the obvious ways the Chancellor could have prevented such damaging speculation, particularly around the safety of pension tax incentives.

“AJ Bell campaigned hard for the government to commit to a Pension Tax Lock ahead of the Budget, launching a Parliamentary petition that reached over 20,000 signatures in a matter of weeks.

“Although both pension tax-free cash and tax relief on pension contributions came out of the recent Budget unscathed, many people will have already made decisions based on pure speculation, and there remains a huge risk that the same rumours will re-emerge ahead of the next Budget.

“The Chancellor does not need to be a passenger when it comes to pension tax speculation – she could take a firm grip by committing to stability over the long term, a pledge which would cost the government nothing and show it is firmly on the side of people who do the right thing and save for their financial future.”