TESSAs and PEPs to be safe under Labour

An incoming Labour Government would keep its hands off personal equity plans and TESSAs, shadow Trade and Corporate Affairs minister Stuart Bell has promised.

Pledging that the millions with tax reduced savings schemes could rest easy, he said that Labour policy is to encourage long term savings.

Bell indicated however, that shadow Chancellor Gordon Brown is considering changes in the Capital Gains tax regime along the lines of the initial CBI proposal for a two-tier capital gains tax.

The suggestion is that the tax would be ended in respect of capital gains on longer term investments, but the #6,300 annual allowance for short-term gains could be reduced in line with the personal allowance for income tax – #3,765.

Mr Bell, speaking to the Share-Link Private Investors Conference, said: ‘Gordon has already pointed out that since it is Labour policy to encourage longer term savings, we have no plans to change TESSAs and PEPs. We do, of course, believe that the corporate tax and financial system could be reformed to offer better incentives for long-term investment.