George Osborne and David Cameron speak to business leaders at the AQL centre on February 5, 2015 in Leeds. Photograph: Getty Images.
Show Hide image

When will the Tories make their inheritance tax pledge?

Osborne has at least one big card left to play - but it might help the Conservatives less than they hope. 

How many bullets do Labour and the Tories have left to fire? That is the question being asked in Westminster as the polls remain deadlocked. Ed Miliband's team believe that the Tories are "running out of road" having launched major assaults on Labour's spending plans and its "anti-business" stance to little effect. 

But one card that the Conservatives do have left to play is inheritance tax. David Cameron and George Osborne have repeatedly stated that they will announce plans to significantly increase the threshold before the election. The latter told the Sunday Times in January: "I have taken steps to help with inheritance, making sure that people can pass on their pension to their children. People can pass on their ISAs. David Cameron has made it clear, as have I, that we believe inheritance tax is a tax that should be paid by the rich and we will set out our further approach closer to the election." It was Osborne's pledge to raise the starting level to £1m in his 2007 conference speech that spooked Gordon Brown into calling off the election and that earned the Chancellor his reputation as a strategic grandmaster. 

Next week's Budget would be a natural opportunity for him to repeat this gambit. The Tories have briefed that the statement will include separate, non-coalition sections on the tax and welfare changes a future Conservative government would make, such as reducing the benefit cap to £23,000 and raising the 40p tax threshold to £50,000. 

But while cutting inheritance tax is usually regarded as an unambiguous vote winner, it's worth recalling that at the 2010 general election it partly harmed the Tories by reinforcing their reputation as the party of the rich (with Gordon Brown lambasting them for planning to cut taxes for "the wealthiest 3,000 estates"). Indeed, in his biography of Osborne, Janan Ganesh revealed that the Chancellor was secretely glad when the Lib Dems forced him to drop the policy. 

Any new pledge would risk having the same effect while also making it harder than ever for the Chancellor to argue that his sums add up. But this fiscal firework is one of the few things that could still change the game. 

George Eaton is political editor of the New Statesman.

Photo: Getty
Show Hide image

What Jeremy Corbyn gets right about the single market

Technically, you can be outside the EU but inside the single market. Philosophically, you're still in the EU. 

I’ve been trying to work out what bothers me about the response to Jeremy Corbyn’s interview on the Andrew Marr programme.

What bothers me about Corbyn’s interview is obvious: the use of the phrase “wholesale importation” to describe people coming from Eastern Europe to the United Kingdom makes them sound like boxes of sugar rather than people. Adding to that, by suggesting that this “importation” had “destroy[ed] conditions”, rather than laying the blame on Britain’s under-enforced and under-regulated labour market, his words were more appropriate to a politician who believes that immigrants are objects to be scapegoated, not people to be served. (Though perhaps that is appropriate for the leader of the Labour Party if recent history is any guide.)

But I’m bothered, too, by the reaction to another part of his interview, in which the Labour leader said that Britain must leave the single market as it leaves the European Union. The response to this, which is technically correct, has been to attack Corbyn as Liechtenstein, Switzerland, Norway and Iceland are members of the single market but not the European Union.

In my view, leaving the single market will make Britain poorer in the short and long term, will immediately render much of Labour’s 2017 manifesto moot and will, in the long run, be a far bigger victory for right-wing politics than any mere election. Corbyn’s view, that the benefits of freeing a British government from the rules of the single market will outweigh the costs, doesn’t seem very likely to me. So why do I feel so uneasy about the claim that you can be a member of the single market and not the European Union?

I think it’s because the difficult truth is that these countries are, de facto, in the European Union in any meaningful sense. By any estimation, the three pillars of Britain’s “Out” vote were, firstly, control over Britain’s borders, aka the end of the free movement of people, secondly, more money for the public realm aka £350m a week for the NHS, and thirdly control over Britain’s own laws. It’s hard to see how, if the United Kingdom continues to be subject to the free movement of people, continues to pay large sums towards the European Union, and continues to have its laws set elsewhere, we have “honoured the referendum result”.

None of which changes my view that leaving the single market would be a catastrophe for the United Kingdom. But retaining Britain’s single market membership starts with making the argument for single market membership, not hiding behind rhetorical tricks about whether or not single market membership was on the ballot last June, when it quite clearly was. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.