Should Hunt be spending £66,000 a year on keeping a highly-paid 'boomer' in work?

The Chancellor high-fiving children during a visit to a nursery in south London. Credit: PA

My goodness wasn't Jeremy Hunt's budget boring!

Which I have to say, in all impartiality - and I don't say that in a Gary Lineker sense - is a very good thing. 

Because he is trying to address two of the structural weaknesses of the economy, and has done so largely in a technocratic rather than ideological way.

He is giving £9bn a year of tax breaks to companies to persuade them to invest more, to correct an estimated £350bn investment shortfall in the UK since Brexit.

Which in turn has led to a collapse in productivity, and is one of the big reasons why we are around a third poorer than we would be if previous trends had been sustained.

The other drag on growth has been that since the pandemic, and also partly connected to Brexit, businesses have struggled to recruit the talent they need.

Hunt is spending more than £5bn a year on encouraging young parents, those over 50 and the disabled to take jobs or work more hours.

Most of which is politically uncontentious.

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You could imagine Rachel Reeves, the shadow chancellor, promoting initiatives like those. Except for one of those policies.

The scrapping of the £1m lifetime limit on the value of the pension pots we are allowed to accumulate, together with a rise to £60,000 a year in allowable pension contributions, is a big tax break for those on higher incomes.

But here's the real sting, according to the OBR this initiative will only persuade or keep 15,000 people into work at an annual cost of around a billion pounds.

That means the Treasury is spending more than £66,000 a year to persuade older people to work - which, to employ a technical term, will be seen by many as bonkers.

The struggling NHS definitely needs fewer doctors to be forced into retirement because of the tax penalties they face if they breach their lifetime and annual pension limits. 

But it is amazing that the Treasury thinks it's worth spending such a huge sum to persuade those boomers and Gen X-ers to keep on trucking. 

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