The left should applaud Osborne's inheritance tax U-turn

The Chancellor's decision to freeze the inheritance tax threshold at £325,000, rather than raise it to a £1m, is an opportunity to put the principled case for the tax.

Back in 2007, when the Tories as much as Labour assumed that boom and bust had been abolished, George Osborne told his party's conference that a Conservative government would raise the inheritance tax threshold to £1m. It was unacceptable, he said, that a tax "designed to hit the very rich" was increasingly borne by "ordinary people". The pledge was a political masterstroke, prompting a surge in support for the Tories and spooking Gordon Brown into abandoning plans for an early election. 

But the policy looked less impressive by the time of the general election when Osborne's declaration of an "age of austerity" sat uneasily with a pledge to cut taxes by £200,000 for the wealthiest 3,000 estates. The Chancellor, according to Janan Ganesh's recent biography, was secretely glad when the Liberal Democrats gave him political cover to abandon the pledge.

In last year's Autumn Statement, he announced that the inheritance tax threshold, frozen since 2009 at £325,000 (£650,000 for couples), would rise by a paltry 1 per cent in 2015-16 to £329,000. Now he's set to announce that, in fact, it won't rise at all. Instead, to help meet the £1bn a year cost of the coalition's social care plan, the threshold will be frozen at £329,000 until at least 2019. Many more "ordinary people", to use Osborne's phrase (although the average house price is £249,958), will be hit by inheritance tax. Were the threshold to rise in line with inflation, it would stand at £420,000 in 2019. 

In other words, Osborne is effectively increasing the tax - and he is right to do so. If "equality of opportunity" is to be more than merely a slogan, a progressive inheritance tax system is essential to prevent privilege being automatically transferred from one generation to the next. As Warren Buffett sagely observed when he campaigned against George W. Bush's plan to abolish "the death tax", one would not choose the 2020 Olympic team "by picking the eldest sons of the gold-medal winners in the 2000 Olympics". It would, he added, replace a meritocracy with an "aristocracy of wealth". Inheritance tax is currently levied at 40 per cent; a progressive government would consider introducing a higher band for the wealthiest estates. 

Osborne's U-turn may have more to do with his desperate need for revenue than any conversion to progressive taxation but it is an opportunity for Labour to finally make the principled case for the tax. 

George Osborne plans to freeze the inheritance tax threshold at £325,000 until 2019. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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The Prevent strategy needs a rethink, not a rebrand

A bad policy by any other name is still a bad policy.

Yesterday the Home Affairs Select Committee published its report on radicalization in the UK. While the focus of the coverage has been on its claim that social media companies like Facebook, Twitter and YouTube are “consciously failing” to combat the promotion of terrorism and extremism, it also reported on Prevent. The report rightly engages with criticism of Prevent, acknowledging how it has affected the Muslim community and calling for it to become more transparent:

“The concerns about Prevent amongst the communities most affected by it must be addressed. Otherwise it will continue to be viewed with suspicion by many, and by some as “toxic”… The government must be more transparent about what it is doing on the Prevent strategy, including by publicising its engagement activities, and providing updates on outcomes, through an easily accessible online portal.”

While this acknowledgement is good news, it is hard to see how real change will occur. As I have written previously, as Prevent has become more entrenched in British society, it has also become more secretive. For example, in August 2013, I lodged FOI requests to designated Prevent priority areas, asking for the most up-to-date Prevent funding information, including what projects received funding and details of any project engaging specifically with far-right extremism. I lodged almost identical requests between 2008 and 2009, all of which were successful. All but one of the 2013 requests were denied.

This denial is significant. Before the 2011 review, the Prevent strategy distributed money to help local authorities fight violent extremism and in doing so identified priority areas based solely on demographics. Any local authority with a Muslim population of at least five per cent was automatically given Prevent funding. The 2011 review pledged to end this. It further promised to expand Prevent to include far-right extremism and stop its use in community cohesion projects. Through these FOI requests I was trying to find out whether or not the 2011 pledges had been met. But with the blanket denial of information, I was left in the dark.

It is telling that the report’s concerns with Prevent are not new and have in fact been highlighted in several reports by the same Home Affairs Select Committee, as well as numerous reports by NGOs. But nothing has changed. In fact, the only change proposed by the report is to give Prevent a new name: Engage. But the problem was never the name. Prevent relies on the premise that terrorism and extremism are inherently connected with Islam, and until this is changed, it will continue to be at best counter-productive, and at worst, deeply discriminatory.

In his evidence to the committee, David Anderson, the independent ombudsman of terrorism legislation, has called for an independent review of the Prevent strategy. This would be a start. However, more is required. What is needed is a radical new approach to counter-terrorism and counter-extremism, one that targets all forms of extremism and that does not stigmatise or stereotype those affected.

Such an approach has been pioneered in the Danish town of Aarhus. Faced with increased numbers of youngsters leaving Aarhus for Syria, police officers made it clear that those who had travelled to Syria were welcome to come home, where they would receive help with going back to school, finding a place to live and whatever else was necessary for them to find their way back to Danish society.  Known as the ‘Aarhus model’, this approach focuses on inclusion, mentorship and non-criminalisation. It is the opposite of Prevent, which has from its very start framed British Muslims as a particularly deviant suspect community.

We need to change the narrative of counter-terrorism in the UK, but a narrative is not changed by a new title. Just as a rose by any other name would smell as sweet, a bad policy by any other name is still a bad policy. While the Home Affairs Select Committee concern about Prevent is welcomed, real action is needed. This will involve actually engaging with the Muslim community, listening to their concerns and not dismissing them as misunderstandings. It will require serious investigation of the damages caused by new Prevent statutory duty, something which the report does acknowledge as a concern.  Finally, real action on Prevent in particular, but extremism in general, will require developing a wide-ranging counter-extremism strategy that directly engages with far-right extremism. This has been notably absent from today’s report, even though far-right extremism is on the rise. After all, far-right extremists make up half of all counter-radicalization referrals in Yorkshire, and 30 per cent of the caseload in the east Midlands.

It will also require changing the way we think about those who are radicalized. The Aarhus model proves that such a change is possible. Radicalization is indeed a real problem, one imagines it will be even more so considering the country’s flagship counter-radicalization strategy remains problematic and ineffective. In the end, Prevent may be renamed a thousand times, but unless real effort is put in actually changing the strategy, it will remain toxic. 

Dr Maria Norris works at London School of Economics and Political Science. She tweets as @MariaWNorris.