Judges win pension tax exemption

Many judges had threatened to resign over the tax

The threat of a large-scale walkout by judges appears to have won them exemption from a new pensions tax, it has emerged.

Gordon Brown has announced that from 2006 people with personal pensions of more than £1.5m will pay extra tax.

But the changes were greeted with threats of a mass exodus from the bench if judges were included in the changes.

In response, a separate law has been passed which means judges do not have to pay the extra tax.

The move has been criticised as unfair by opposition parties.

'Significant' resignations

Senior judges are often highly qualified lawyers who build up big investments for their retirement, as well as having their judicial pension.

This looks like one law for the judges and a different law for everyone else David Willetts, shadow work and pensions secretary

Lord Falconer, who administers the courts, persuaded his cabinet colleagues that the judges should be exempt from the tax.

A document on the website of the Department of Constitutional Affairs said: "In discussions with the judiciary, they have expressed the view that failure to resolve this would cause both a significant number of judges to resign, and those thinking of applying for the bench to reconsider their position."

The decision was not announced in the Queen's Speech but a press release was issued from Lord Falconer's department.

The new law - covered by the Judicial Pensions Bill - is designed to maintain the current value of judge's pensions.

BBC correspondent Shaun Ley said the exemption would not cost taxpayers, but it is expected to cause anger from other high-earners who must pay.

Shadow work and pensions secretary David Willetts said the move was unfair.

"This looks like one law for the judges and a different law for everyone else, " he said.

"Gordon Brown is capping everyone else's pension, but judges are to be exempt.

"Conservatives want to see good pensions for the many, not Labour's special privileges for the few."