6 days ago
Reeves called cutting inheritance tax a ‘break for wealthy elite'
Rachel Reeves once branded cuts to inheritance tax (IHT) 'a tax break for a wealthy elite' as fears loom over a fresh raid on family estates.
Ms Reeves made the comments in response to George Osborne's decision in 2015 to abolish the death duty on family homes worth up to £1m, a move she called 'iniquitous and ill-conceived'.
The comments, made in a 2017 article the Chancellor wrote for The Guardian, have fresh relevance as she considers a grab on inheritance in an effort to plug a gap of as much as £50bn in the public finances.
Ms Reeves, a backbench Labour MP at the time, said of the former chancellor's decision: 'It is a tax break for a wealthy elite, at a time when the NHS faces a cash crisis and the government is moving to cut £3.7bn in disability benefits from the most vulnerable in society.
'Helping future generations get the best possible start in life should be a higher priority for any government committed to social mobility than helping the relatives of rich couples enjoy the benefits of £1m of unearned, tax-free income.'
The Chancellor added that the policy proved the Conservatives had 'a warped sense of priorities'.
Ms Reeves faces a similar dilemma to the Tory government at the time after attempting to cut Britain's welfare bill by £5bn before the pledge was abandoned following a backlash from Left-wing Labour MPs.
Meanwhile, NHS doctors have launched fresh strikes with demands for repeated significant pay rises.
The Chancellor is expected to need to find between £20bn and £50bn in her Budget this autumn, following last October's record-breaking £40bn of tax rises.
But Ms Reeves has been boxed in by her own promises not to raise taxes on 'working people', including income tax, VAT and the remaining portion of National Insurance contributions.
IHT is charged on the estate of the deceased, not directly on the working people who may stand to receive the money.
Ms Reeves's argument that passing a house to one's children represents 'unearned' income suggests she would not see the raid as a levy on working people.
