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.

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An alternative Trainspotting script for John Humphrys’ Radio 4 “Choose Life” tribute

Born chippy.

Your mole often has Radio 4’s Today programme babbling away comfortingly in the background while emerging blinking from the burrow. So imagine its horror this morning, when the BBC decided to sully this listening experience with John Humphrys doing the “Choose Life” monologue from Trainspotting.

“I chose not to choose life: I chose something else. And the reasons? There are no reasons. Who needs reasons when you’ve got Radio 4?” he concluded, as a nation cringed.

Introduced as someone who has “taken issue with modernity”, Humphrys launched into the film character Renton’s iconic rant against the banality of modern life.

But Humphrys’ role as in-studio curmudgeon is neither endearing nor amusing to this mole. Often tasked with stories about modern technology and digital culture by supposedly mischievous editors, Humphrys sounds increasingly cranky and ill-informed. It doesn’t exactly make for enlightening interviews. So your mole has tampered with the script. Here’s what he should have said:

“Choose life. Choose a job and then never retire, ever. Choose a career defined by growling and scoffing. Choose crashing the pips three mornings out of five. Choose a fucking long contract. Choose interrupting your co-hosts, politicians, religious leaders and children. Choose sitting across the desk from Justin Webb at 7.20 wondering what you’re doing with your life. Choose confusion about why Thought for the Day is still a thing. Choose hogging political interviews. Choose anxiety about whether Jim Naughtie’s departure means there’s dwindling demand for grouchy old men on flagship political radio shows. Choose a staunch commitment to misunderstanding stories about video games and emoji. Choose doing those stories anyway. Choose turning on the radio and wondering why the fuck you aren’t on on a Sunday morning as well. Choose sitting on that black leather chair hosting mind-numbing spirit-crushing game shows (Mastermind). Choose going over time at the end of it all, pishing your last few seconds on needlessly combative questions, nothing more than an obstacle to that day’s editors being credited. Choose your future. Choose life . . .”

I'm a mole, innit.