Sir “Hypocrisy” Starmer refuses to repeal a law that gives him a special tax perk
Sir Keir Starmer has a unique pension deal from his time as Director of Public Prosecutions (“DPP”) which allows him to avoid tax on his savings.
On Friday it was revealed that while he is attempting to force wealthy savers to be subject to a cap on their pension savings through taxation rules, he will keep in place a law that allows him to be exempt from those very rules.
Regulations were swiftly implemented in 2013 to give Starmer a special tax break. Officially titled ‘The Pensions Increase (Pension Scheme for Keir Starmer QC) Regulations 2013’, it was introduced through secondary legislation. The regulations were issued on 21 October 2013, made on 8 October 2013, laid before Parliament on 9 October 2013 and came into force on 31 October 2013. The effect of the regulations is that Starmer is exempt from paying tax on pension savings over £1 million.
Last year, then Labour leader Starmer pledged to force wealthy savers to be subject to a cap on their pension savings. However, as The Telegraph revealed, under the Pension Scheme for Keir Starmer QC regulations, Starmer’s pension from his time as DPP, between 2008 and 2013, is exempt from tax rules he would apply to other workers who save more than £1m.
The Telegraph explained Starmer’s hypocrisy:
The Labour leader was the only member of the exclusive pension scheme, which had tax benefits that “broadly” matched those enjoyed by judges, and disclosed in Crown Prosecution Service accounts signed by Sir Keir himself.
When he stood down, the Government passed secondary legislation, titled the Pensions Increase (Pension Scheme for Keir Starmer QC) Regulations 2013, that ensured his pension was increased once a year to keep pace with rising prices.
The arrangement means he can 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.
Under the current system, almost all taxpayers must pay rates of 25 per cent on money taken as income, or 55 per cent on a lump sum, on any sums over £1.07m. [Then Chancellor Jeremy Hunt abolished the £1.07 million pension cap in his Spring Budget, effective April 2024, to prevent experienced NHS workers from trying to avoid paying tax bills.]
But under Sir Keir’s arrangement, any money he saved while serving as DPP does not count towards his total.
The same benefit is not given to other senior civil servants of an equivalent rank, such as permanent secretaries in government departments, and was removed from Directors of Public Prosecution in 2014 after Sir Keir stood down.
The tax perk had also applied to his predecessors in the DPP role. The benefit was abolished for Sir Keir’s successors the year after he stood down.
‘Hypocrite’ Starmer to avoid tax on pension, The Telegraph, 21 March 2023
Starmer subsequently pledged to repeal his “special tax perk” law. In March 2023, Starmer announced that if Labour wins the next election, he will change the law to remove the tax break he personally benefited from.
In June 2024, it was reported that Labour’s planned pension tax would re-impose a 55% tax rate on pension savings above £1.07 million. This would affect around 2 million people, including public sector workers, entrepreneurs and captains of industry. However, as Express reported, “one man has arranged his own personal opt-out … Sir Keir Starmer.”
This month it was reported that the new government was debating means-testing the state pension to fund their spending plans. This would involve taxing retirees who earn above a certain threshold, potentially reducing their state pension payments. Effectively, retirees could get a lower sum if Starmer and Reeves decide they are earning too much.
But, this “earning too much” rule won’t apply to Starmer. On Friday, Richard Holden MP tweeted that Starmer has made a U-turn and will not be scrapping the law that specifically applies to him, and him alone.
Richard Holden is a British Conservative politician who was first elected in December 2019 as the first-ever Conservative Member of Parliament for North West Durham. He currently serves as the Member of Parliament (“MP”) for Basildon and Billericay, Essex. He was elected to the seat in the July 2024 general election, succeeding the abolished constituency of North West Durham.
On Monday, Mr. Holden put a written parliamentary question to the Treasury “to ask the Chancellor of the Exchequer if she will take steps to repeal the Pensions Increase (Pension Scheme for Sir Keir Starmer QC) Regulations 2013.”
In the response, Darren Jones, the Chief Secretary to the Treasury, said: “The 2013 regulations were introduced to ensure the Director of Public Prosecutions’ pension scheme is uprated in line with other public service pension schemes.”
“There are no plans to repeal the regulation,” he added.
Starmer’s hypocrisy continues.
