Peter Hoskin

The Tories reposition themselves on inheritance tax

The Tories reposition themselves on inheritance tax
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Now here's another tax debate for the Tories to get caught up in.  Appearing on the Politics Show today, Ken Clarke has suggested that the Tory plan to raise the inheritance tax threshold is no more than an "aspiration".  Here's how the indispensable Politics Home reports it:

"Mr Clarke said Tory plans to raise the inheritance tax threshold would not be a priority if they win the next election.

Hinting plans had been kicked into the long grass, he called inheritance tax reform 'an aspiration' but not something they would do 'the moment we take power'.

Asked if inheritance tax was 'off the shelf', he said: 'We'll have to consider when we get in whether we can afford to do that, in my opinion. I don't think Labour's going to leave us in a position where we can do that.'

This is both harmonious and inharmonious with George Osborne's statement on a 45p tax rate.  On the one hand - as a Tory strategist reveals to Tim Montgomerie over at ConservativeHome - both announcements chime together to create an "anti-rich" mood; the idea being that this will "buy room for acceptance of public spending cuts".  But, on the other, the claim that there's uncertainty about the state of the public finances rather undercuts the Tory decision to commit now to a red herring measure set by Brown. 

Of course, the fiscal landscape demands sacrifices, and that old plans be swept aside.  It most likely makes sense to do that in the case of inheritance tax.  But, overall, I'm still worried that politics is trumping economics in all this.

More on the story from Tim Montgomerie. Apparently, the official line is that the IHT measure would still be delivered in the first Parliament of a Tory government, and that it's consistent with their "social justice" agenda as it's funded by the taxation of wealthy non-doms.  To my ears, it's all sounding a little garbled.