If the Tories scrap inheritance tax, I’m voting Labour

I have been playing a game with myself recently: asking just what would it take for me to vote Labour at the next election?

The gossip out of No. 10 has answered it for me: if, as rumoured, the Prime Minister toys with the idea of abolishing inheritance tax – at a time when the government has jacked up tax for many millions of workers through fiscal drag and lowering the 45 pence tax threshold – then suddenly Keir Starmer is going to look a relatively attractive option. Yes, I really would rather have a PM who thinks a woman can have a penis, than I would a party that delivers a tax cut for the idle rich while workers are struggling with falling real earnings and rising tax bills.

Yes, I know there is a class of people who seem to think inheritance tax is an outrage, even though their heirs are never going to come close to paying it themselves. At present, fewer than 4 per cent of deaths result in an inheritance tax bill. Thanks to George Osborne’s primary residence allowance, children can inherit a million pound family home without paying a penny in inheritance tax. That is just piling up misery for people who are not lucky enough to have wealthy parents and face even bigger problems of getting on the housing ladder as a result.

If I were a Tory party strategist I would ignore the polls that sometimes suggest that inheritance tax would be the most popular of all tax cuts and look at the optics instead. For the past year the government has been telling us that sorry, taxes must rise in order to fill a gaping hole in the public finances. We have been primed for pain – and it has already hit us in the pockets. Where would abolishing inheritance tax fit in with that? How is the government going to explain that it can suddenly do without £7 billion a year in revenue from inheritance tax – but that sorry, if you work for a living you are going to have to lump it for a bit longer?

No, inheritance tax is not ‘double taxation’, as its critics often complain. For one thing, a lot of the wealth that is being inherited at present has been built up in the form of tax-free capital gains on main homes – homes which in many cases were bought with the aid of mortgage interest tax relief. Moreover, all money is taxed multiple times as it passes through the economy. I pay tax on the money I earn; the plumber I employ to mend my cistern then pays tax on what I pay him. If the plumber then goes out and buys a few beers, he pays tax on that, too – and so on.

Any party that wants to promote fairness – as well as rebuilding Britain’s much-tattered work ethic – wouldn’t be slashing or abolishing inheritance tax. It would first close the loopholes which, for example, allow landowners to bypass inheritance tax. Then it would treat inherited money just like any other form of income – taxing it at the same rate, and with the same allowances, as earned income. No, that is not punitive, it is not soaking the rich, it is not socialism – it is just fair. What’s more, it would send a powerful message which seems to have been lost in workshy Britain: that work pays, that anyone who wants to better themselves should get on and do it through hard work, not by waiting for their parents to keel over.

I know I will upset may of my readers by writing this, but sorry, if the Conservatives go into the next election promising to abolish inheritance tax while having jacked up taxes on earned income, I am going to be voting for Keir. I don’t think I will be the only one.