Threat to 25% tax free lump pension sum.

this always used to be how it was done. I'm not sure whether that has been the case in recent years as I've taken less notice. But I believe it is still the case.

I was under impression that there are some changes to existing taxes which do not require parliamentary approval i.e. do not require the passing of a Finance Bill. But I now believe that is not correct and rather that what happens is that for some elements, and these typically being part of that, a "Ways and Means" resolution for Provisional Collection of Taxes is passed at end of the Budget statement. This then empowers the government to collect these taxes as if they have had been raised (with perhaps the actual formal embodiment of the increase being included in the later Finance Bill). 

Re. VAT: this is one of those that they do probably need to give a little bit of notice of to allow retailers to adjust pricing and EPS systems accordingly. So while in theory they could enact it "immediately", in practise I'm not sure that would be implementable. When we had temporary VAT reductions (remember those?), how quickly did those come into effect can anyone remember?

Excise duties are a different kettle of fish.

Oil prices have been coming down, and from an eco agenda point of view the near permanent freezing of the "fuel duty escalator" (which in real terms has been a "down escalator" for much of its recent life) can be viewed as bad policy. At least one of the motoring organisations has recently given the govt. good cover (if it wanted it) to raise fuel duties as they have asked for it ("duty cuts not being passed on to the motorist so govt. should raise it", to paraphrase). 


To the general point of "how quickly can changes be enacted". A few things and phrases come to mind. 

- Ways and Means Resolution to allow for Provisional Collection of Taxes: if they want to bump up tobacco/alcohol/fuel duty or other excise duties from say 6pm on budget day (or from midnight) then this is the mechanism to do it. It empowers the government to collect taxes as if they had already been passed in a Finance Bill. It always used to be what happens, I don't know about recently.

- "Anti-Forestalling Measures": announcing that certain changes will be subject to AF measures i.e. the later Finance Bill will enact the changes as if they came into effect from date X (e.g. midnight on budget day). I expect increases in CGT and if they are I fully expect them to be subject to AF measures making them effective from say 01/10.

- Retrospective application: although rare, these do happen where there is significant risk to the exchequer and the retroactive nature can be viewed as reasonable.

For which reason I think outright abolition is unlikely - even with notice.  A cap on the tax free amount, and/or a tapered rate, seems more likely IMO.

Edit: crossed with bracknellboy

Because people will be less likely to take it if it's taxed.

I have a friend who is 63 he took his 25% 4 years ago and is "cashing in" chunks of his pension every year. when he hits 67 he will be asset rich and cash poor. his attitude is the state won't let him starve.

Maybe it is time to look at limiting how much is cash terms can be taken tax free, remembering that many peoples contributions are tax free. I guess a fair limit would be £150,000 with tax paid as if income on anything above that.
before people say £150,000 is outrageously high I was not a high flyer at work and when I took my pension 6 years ago with reductions for early retirement I could have taken £125,000, every £18.10 I took above the lower limit reduced my annual pension by £1.

maybe it is unfair that many with good pensions get tax relief when paying in and then pay no tax on a large lump when it is withdrawn.
yes I've seen the screams online that taxing pensions is unfair as you pay tax when you earn the money and tax again when you take it. I don't know of anyone that doesn't get tax relief on pension contributions so it is only right that they pay when it comes out.

We do however need a system that encourages people to save for retirement, the current binary system of pension credits discourages those that would only get a small extra pension from saving.

one thing that needs a serious look is class 2 voluntary NI It's £3.45 a week but adds £-6 a week to your state pension so basically you get your "investment" back in less than a year, the Voluntary NI to make up missing years is £900 a year that gets you the same return so pays for itself in under 3 years.
Yes I do pay the voluntary class 2 NI I'd be stupid not to.