The Guardian view on inheritance tax rises: to win the argument, ministers must build the case on fairness
The shift has been a two-stage process. First, economic data made it look highly improbable that Rachel Reeves could fulfil existing spending pledges, while also sticking within her self-imposed fiscal rules, on current revenue projections. She needs money. Second, the chancellor and the prime minister stopped denying that this was the case. They have not confirmed that taxes are going up, but they no longer pretend that isn't a reasonable expectation.
One option under consideration, as revealed by the Guardian this week, is to change the inheritance tax (IHT) regime. The range of reliefs that currently limit tax on gifts made in the years prior to death could be replaced by a lifetime cap. This would bring more high-value assets into the scope of IHT. Only a wealthy minority would be affected. The most recent HMRC data shows that fewer than 5% of deaths lead to any required payment of inheritance tax. While the headline rate is 40%, various reliefs and exemptions bring that down to an effective rate of 13%.
A common argument against most taxes is the disincentive impact they might have on investment and aspiration. That hardly applies to a levy on unearned, hereditary windfalls. In utilitarian terms, this is just the sort of pot that an enterprise‑oriented exchequer should target.
But the public does not see it that way. IHT is unpopular despite its negligible impact on most household finances. Partly that is a function of wishful thinking. Surveys show voters vastly overestimating the likelihood that they will one day inherit or bequeath an estate that is taxed. But distaste for IHT also has a deeper emotional resonance. It is deemed unfair, as a 'double' taxation because estates might consist of savings accrued from earnings that were taxed earlier in a working life. This is not an exceptional case. Many items and activities fall under overlapping tax purviews, but people feel there is something particularly mean about the Treasury dipping into the finances of grieving families.
Failure to address similar reservations led the government into a storm of protest last year when very generous IHT reliefs on farmland were made slightly less generous. The damage from that furore was out of all proportion to the financial gains.
The government is right to look at raising more money from IHT, but the lessons of past battles must be learned. Myths need robust debunking, while other issues around inheritance – the instinct of parents to help children – need handling sensitively. There is a powerful argument for intergenerational fairness in a society where inheritance, especially of property, dictates life chances, dividing ever younger cohorts into landowner and tenant classes. Taxing inheritance is a modest but necessary levelling mechanism.
That case needs making well ahead of the budget. The tone of the conversation around tax may have changed, but the mechanism involved a prime minister and chancellor reluctantly conceding a reality only once it had already been widely acknowledged elsewhere. If they want their plans to gain public favour, they must rise out of that reactive, defensive crouch and make bigger arguments for a fairer tax system.
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Daily Mail
3 minutes ago
- Daily Mail
The 19-year-old 'fogey' who hasn't voted in a general election or had a serious girlfriend, but he's running a £400million budget as Britain's youngest council leader
Councillor George Finch seems to have been rearranging the furniture in his new office by himself. 'I thought this worked better,' he says, explaining the new placement of desk, chairs and boardroom table. President Trump might have brought in interior designers when he moved back into the Oval Office, but there is nothing blingtastic about the Warwickshire equivalent. Nor is the new leader of Warwickshire County Council about to blow the budget on gilded adornments for the walls or turn Shire Hall into a skateboard park, which must have been a fear. There are plans for a Union flag to be given prime position in this room, but it sounds like it will be propped against the wall rather than attached to it. 'I can't put anything else on the walls because this is a listed building so there are all sorts of rules,' he explains, with a slight roll of the eye. 'You can't even put a pin up.' Then there is the carpet, best described as municipal green. 'I have to say, I don't love the carpet,' he admits, giving me a tour of his new fiefdom. 'It's giving library vibes. But I'm really not crying about it. I think it's good quality carpet so if it does the job, that's what matters. It doesn't matter about the colour or the age, as long as it does its job.' What a sensible soul George Finch seems, yet it's little wonder his appointment earlier in the summer caused abject horror in some quarters. Because George – the new wunderkind of the Reform party; his boss Nigel Farage's great hope for the future – is 19 and believed to be the youngest council leader in Britain. 'People are comparing me to William Pitt the Younger (who was PM at the age of 24) and Alexander the Great,' he says. 'I'm not saying that – I'm just George – but people do seem obsessed by the age thing.' It's a bit early to be talking about whether we are in the company of a future prime minister, but it's fair to say George's ascent has been extraordinary. This is a kid who hasn't yet voted in a general election (he wasn't old enough at the last one). He still lives with his parents, can't yet drive and tells me (and it's the only time he's tongue-tied) that he hasn't yet had a serious girlfriend. 'I mean I have had a girlfriend at school, but not…no. I've got a job to do. I've put a lot aside for this'. This time last year he was getting his A-level results and heading off to university to study politics and international relations. Local politics was more of a sideline – he'd been a youth councillor before winning the seat of Bedworth Central this year – but last month when his Reform party colleague Rob Howard stepped down as leader, citing ill health, George stepped up. It's a bit early to be talking about whether we are in the company of a future prime minister, but it's fair to say George's ascent has been extraordinary A vote last month confirmed his appointment. It's all been a whirlwind and technically he's still on his summer holiday from university. But can he resume his studies and still get to grips with potholes? He's not entirely sure, but is veering towards 'probably deferring or suspending my studies. 'I've spoken to the university, asked their advice, but they don't know what to do, which is hilarious'. As the mother of 19-year-old twins, I feel it's my civic duty to tell him that my mind is blown by his appointment. My twins are a couple of weeks older than him and have also just completed their first year at university. They are bright, capable and will hopefully go on to great things but very recent life experience (this week's, in fact) has taught me that they aren't yet ready to be left in charge of a non-stick frying pan. How on earth can George's mother sleep at night knowing he's in control of a £400 million budget? It turns out George is quite experienced in having women old enough to be his mother voicing such concerns out loud. 'Some of it is quite funny but one woman said to me recently, 'My son can't even run a bath', which had me thinking, 'But that's down to you. That reflects badly on you. Why would you say that?' For the record, I can run a bath.' But you're not qualified for this? Even your mum (he says she is 'very proud and wholly supportive that I'm doing something for my community') can't argue you are. 'No person is,' he says. 'No one is qualified to be a politician. You don't need to be. It's about whether you have the confidence of the people and of the group, and of the council, and I have all those things.' Maybe your university studies – or what there has been of them – will help? He raises an eyebrow. 'I don't think what I learned about the philosophy of politics will be remotely helpful. 'What has the philosophy of politics got to do with dealing with people's potholes or tax rates? Nothing.' If you can run a council on confidence, enthusiasm and common sense, then Warwickshire will be fine. George is like no 19-year-old I have ever met. He bounds out to meet me like an exuberant labrador, all warm handshakes and floppy fringe. At school he was a rugby lad but 'did my cruciate in, so my knee is buggered' which put paid to a sporting career – but he did learn much about teamwork. His demeanour and ease in talking to elders ('I can talk to anyone, me') might suggest a private school background. Wrong. He went to a state school, reluctantly got a student loan for that university course ('we're being sold a dud, thinking it's OK to be knee-deep in debt') and comes from a family that would traditionally have been Labour voters. 'Everyone in Bedworth would have been Labour. My dad wasn't into politics but he'd have been a Labour voter, sure, just because they were the party for the working classes,' he says. His dad Stuart worked in construction until contracting sepsis 'and having to give up his job'. His mum Amy was a hairdresser but went back to college to study to be a special needs assistant. The fact that his younger sister – he has an older one too – has health complications perhaps made him grow up faster than he would have, he agrees. Harriet, 14, has special educational needs and lives with FND, functional neurological disorder. 'It means she can lose function in her arms and legs. It happened yesterday. She lost function in both legs,' he says. This is a family that knows about local services, about sitting in an A&E department for days at a time, spending hours on the phone, lost in the system. 'My mum and dad would be in A&E on a monthly basis,' he says. 'It's been a heartache trying to get support for my sister from… institutions. The NHS haven't helped and as you become older you get more attuned to these things. 'She shouldn't be in A&E at all. What she needs is a rehabilitation plan. I can tell you about these things.' This is also a teenager who knows how to lift a phone to make a doctor's appointment and who learned early how to send an email which made him sound older. 'Even before I was a councillor I was doing the research, learning how to formulate emails, how to fill in an HCP [healthcare proxy] form. There is no proper support for families. My parents did the bulk of it but I was there helping to advocate,' he says. It's easy to join the dots to see how he became involved in local politics but how does a child from a Labour-supporting family come to join the Reform party? If he does become PM in the future they will write university dissertations about this, but George pinpoints the shift to Brexit, 'when people, including my parents, became concerned about accountability and about who was running our country'. He had a brief flirtation with the Tories but ultimately became disillusioned that anyone was going to make Britain great again. Into the void stepped Lee Anderson, the one-time Conservative MP who had defected to Reform. 'I went to a talk he gave, paid my entry fee, went with my mate – we were suited and booted – and I was blown away by him,' says George. 'I spoke to him afterwards about the wave of wokeism washing over our education establishment and he said, 'Come and join us'. I did, the very next day.' No wonder Nigel Farage and co have embraced him, and armed him for the battles ahead. He set out his stall early, stepping into an extraordinary debacle when he accused the local police force of covering up the fact that the suspect in a child rape case locally was an asylum seeker. He seems blasé about the fact that he risked contempt of court wading into this one. Evidence of naïveté? He says it's more about 'expecting transparency'. Going to war with 'the blob' – aka bureaucrats – holds no fear either. One of the first things he did as council leader was to confront Monica Fogarty, his chief executive, over flying the LGBTQ rainbow flag over council offices during Pride Month. He wrote to demand it come down. She refused. The flag is now down (but only because Pride Month ended) and he seems be claiming victory. 'It's very simple. A non-elected bureaucrat telling an elected leader, with constitutional powers, what to do? Is that democratic? It is not,' he say. But who has the power to fly a flag in any council? These powers aren't yours, are they? 'Constitutionally, they are mine. We are expecting to put a flag policy in place in September, so hopefully that will draw the line under it,' says George. By then – if he can get support – there will only be three flags permitted to fly at Warwickshire council offices, as per Reform guidelines. 'That will be the Union flag, the St George's flag and the county flag,' he says. There is something a little sad about talking to someone so young about how 'the country has gone to hell in a handcart'. I have the sort of conversation with him that it's more usual to have with someone from my parents' generation. He says he has always been 'an old head on young shoulders', a bit of a history nerd, obsessed with world wars and 'interested in things like how Henry VIII ruled with his ministers'. He became aware – then furious – about how his elders were directing him to learn about other things. 'You see it everywhere. I looked at studying history at university but I couldn't just do the history I wanted to study. One of the courses I was looking at was about how people were LGBT during the Tudor period. What? That's a non-subject.' He cites a moment when some of his co-students at Leicester University were arrested after a Free Palestine demonstration. 'A few of them got arrested after vandalising property and the lecturer stood up and said we must get the university to write a letter to the police to get them freed. What? They'd just done criminal damage. 'Another girl was arranging a protest. I was thinking 'I just want to learn'.' His growing political awareness put him in direct conflict with many of his peers ('but not all. It's a myth that all students are to the Left'). What surprises me is that he doesn't seem remotely bothered about how he comes across to the younger generation. He isn't worried that his peers may think his association with Reform makes him 'racist or sexist or any of those things, because I know it's absolutely not true'. There is much of the old fogey about him. No, he doesn't watch Love Island ('why would I bother?')and is horrified that I might describe him as a member of Generation TikTok. What music does he listen to? 'Ah, well, you are going to say 'Really?' now, but I do listen to old stuff – Billy Joel, David Bowie, Queen, Elton John. You know, proper music with a bit of meaning to it. 'Nowadays, it's a load of gibber-jab. You can't even understand it. It goes too fast. BOOM BOOM. What's the point of all that?' Oh. Out the window goes my opportunity to talk to him about techno mixes and K-pop. 'I don't even know what that is,' he admits. You're not a Swiftie, I persevere? His face is blank. George, you are 19. How can you not know about Taylor Swift? 'Oh yeah, everyone knows Taylor Swift. I just don't know these abbreviations.' I ask what posters he had – maybe still has – on his bedroom wall at home. 'I was never really one for posters because why would you ruin the wallpaper?' When he did move out, briefly, into university halls of residence there was one, though. 'I did put up a picture of Ronald Reagan.' He's a hero? 'That's the kind of Conservatism we need.' Is there room for a Nigel Farage poster on his wall? 'He's changed the course of history. One single man, and he's done that. Look at what he is doing now.' He is, of course, convinced that Reform will form the next government. 'Labour are toast. You can see the panic in Keir Starmer's eyes. It must be soul-destroying because the Conservatives didn't realise they were toast until late in the day.' Will he be a part of any future government, though? There is talk within the party of how he could stand at the next election but – ever the politician – he insists that 'once we get the education system sorted and go back to traditional values' he could go back to Plan A which was to be a history teacher. Surely he has his eye on Number 10? He refers me back to potholes, his immediate concern. 'We have 107 of them in Warwickshire,' he points out.
Daily Mail
3 minutes ago
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The Guardian
3 minutes ago
- The Guardian
Horse racing to go on strike in protest against government's planned betting tax rise
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