Chancellor George Osborne speaks during a meeting with his Italian counterpart Pier Carlo Padoan (unseen) in Rome, Italy, in this file photo dated February 3, 2016. REUTERS/Alessandro Bianchi

Chancellor George Osborne has dropped plans for a pensions overhaul which had run into opposition in his Conservative Party, already split over the country’s European Union membership referendum, media reports said.

The decision also reflected Osborne’s ambitions to succeed Prime Minister David Cameron, some reports said.

Osborne, who is due to make his annual budget statement on March 16, has been considering reforms of the pension system which could raise revenues for his push to turn Britain’s budget deficit into a surplus by the end of the decade.

Reform options included introducing a flat rate of tax relief on pension contributions, which would hit wealthier savers, or the more radical idea of taxing pension contributions and ending the tax-free lump sums that pensioners enjoy now.

“George has always been clear he wouldn’t do anything to damage saving,” a person identified as an ally of Osborne was quoted as saying in newspapers.

The combination of uncertainty about the global economy and the implementation of other pension reforms meant it was not the right time to make further changes, the person said, adding: “There won’t be any changes to tax relief at all in the budget.”

A finance ministry spokesman said he was unable to comment on the reports.

Osborne was forced into a major policy U-turn last year when he announced plans to cut tax credits for low-earning households but dropped them after they were opposed by lawmakers across the political spectrum and rejected by parliament’s upper house.

Cameron and Osborne are leading the campaign to keep Britain in the EU when the country votes in an in-out membership referendum on June 23. Opinion polls show voters split almost 50-50 on whether to stay in the bloc or leave.

Osborne’s main rival for the leadership of the Conservative Party, Boris Johnson, is backing the ‘out’ campaign.

[Source:- Reuters]