The Labour Party has said that it is planning to cut pensions tax relief for all those earning more than £150,000in order to be able to raise funds for the Compulsory Jobs Guarantee, a key part of the welfare plan.

Media reports showed that the people earning more than £150,000 would only get 20 per cent tax relief on their pension contributions compared to 45 per cent given to them under the current regulations. The party has indicated that it will would raise some of the money necessary for its welfare reform by cutting the relief.

The party will raise the money through tax on bankers' bonuses as well as cutting tax relief on pension contributions. The move will cost as much as £1 billion a year to the higher earning members in the country. Experts pointed out that the move would only impact around 300,000 of the richest people in in the UK.

The funds will be used to fund a scheme, in which every young person without a job for more than 12 months will get a 'starter job' for six months with the governments funding pay as well as employers' national insurance contributions for 25 hours at minimum wage.