The New Statesman’s rolling politics blog

RSS

Magpie politics will be the death of Labour

Why the party can't win the argument over inheritance tax

In recent weeks Labour ministers have stepped up attacks on the Conservatives over their grossly regressive pledge to raise the inheritance-tax threshold to £1m. This policy-based critique was, I thought, an improvement on the claim that David Cameron was a "vacuous" politician. But new figures out today, showing that under Labour the number of families paying inheritance tax has fallen to the lowest since records began, remind us why this approach so often flounders.

Alistair Darling's "magpie" pre-Budget report, which increased the threshold to £600,000 (and to £700,000 by 2010) after George Osborne stole the headlines with his promise to raise the threshold to £1m, remains one of the most shameful moments of Gordon Brown's tenure.

Labour has failed to win the political argument over inheritance tax because its disagreements with the Conservatives are differences of degree rather than kind. Ministers have focused on the negative point that the Tories' plan would benefit the 3,000 richest estates in the country and have refused to make either the egalitarian or the meritocratic case for inheritance tax.

I used to be one of those who believed that Cameron's embrace of social liberalism proved that Labour had unambiguously shifted the political consensus to the left. In truth, much Conservative policy reflects Labour's failures, not its successes. It is because Labour has been insufficiently radical that the Tories have been able to masquerade as progressive even while pledging to cut taxes for millionaires.

Labour cannot successfully rebut Cameron's claim that the Tories are the party of the poor after presiding over the highest level of inequality in 40 years. It cannot credibly challenge the punitive Conservative public-sector pay freeze after rushing out news of its own freeze the night before Osborne's speech. It cannot ridicule the Tories' obsessive anti-statism after fetishising the market for years in the pre-crash world.

Brown must learn that pandering to the right does not neutralise the Conservatives -- it puts them in power.