Surprise tax break for rich could be gift to opposition

Most of the Budget had been advertised in advance, either on purpose or by leaks.

- JOHN RENTOUL

The increase in defence spending was announced a few days ago, and the Treasury has been issuing a stream of news releases setting out most of the measures, in an attempt to win favourable headlines over several days.

Yesterday, the leak of the childcare plans meant that Jeremy Hunt was deprived of his final flourish in the chamber. That meant that almost the only surprise, apart from some terrible jokes about warm ale and frozen duty, was the decision to lift the lifetime limit on pension fund contributions.

Usually, Budgets are preceded by speculation about the abolition of higher-rate tax relief for pension contributions, one of the options for clobbering the rich that seems quite straightforward but is always stiffly resisted. This Budget, on the other hand, was preceded by informed speculation of the opposite kind: that the lifetime limit on pension contribution relief would be lifted from the current level of £1m.