Three years ago I made an impassioned plea in a speech to the Tory conference to the then Shadow Chief Secretary George Osborne to abolish inheritance tax. It got a good round of applause from the audience but George was having none of it. I am delighted he has now seen the light! I think it is a clever move upping the threshold to £1 million, as it means it is more difficult to say that it is a tax cut for the rich. Most importantly it means that family homes can be passed through the generations more easily.
In the last hour I have almost lost count of the number of people who have come up to me with beaming smiles, saying: "Isn't it wonderful that we have Conservatives to sell?" My gut feeling is that this is the key speech of the conference. It will take some beating.
52 comments:
How many people live in a family home all their lives, and how many people with homes worth £750k aren't rich in your book then?
I think what this tax cut would be most likely to achieve is a further boom in house prices, and a bigger expansion in buy-to-let as people decide to rent out their newly acquired second home rather than have to sell it to pay some of the tax.
Great.
Watched it on BBC news - VERY shakey camera work!!! Almost as if the camera man was trying to shake his head.
On another matter:
Obviously an ongoing ploy to make the snot swallower seem more normal. 'Oh Lay Your Hands'... rings out as he takes the stage for his speech.Chatting with good-looking women (Mariella Frostrup).Apparatchiks taking every opportunity to shake his sticky hand.Pointing out Labour's desperation to make him acceptable by association would be even more effective than the 'phone download of him coaxing the 'timorous wee bogey' out and sucking it down??Can't someone just say: 'The Prime Minister picks his nose and eats it'?
John @ 1.16pm - what tosh.
The buy-to-let market is in ruins.
It's about letting people keep more of their own money, instead of Govt frittering it away.
It is an irrelevance because he's preaching to his own voters.
The tories need to swing non-tory voters to vote tory.
Here is a far more sensible proposal.
Those on minimum wage pay taxes. A lot of taxes. Take them out of the tax net completely by raising the tax threshold to 12,000 a year.
If necessary, increase the rate on the next band, so that the richer off aren't better or worse off.
The reason is that most of those on benefits aren't stupid. They have worked out that they are better off not working.
A clear difference between income working, and income on benefits means people will work.
Secondly. You only get benefits if you have paid in for 2 years. That way, indigenous and immigrant are on the same footing.
Thirdly, put a limit on benefits you can claim in your life time.
Lastly, everyone pays into a fund for their retirement in their name, with compulsion. Once the fund reaches a certain size, you don't have to contribute. The level of the fund is set at the level needed to remove yourself from benefits whilst retired.
As for your little sidebar on the debt run up by the government being a trillion. Think again. Government employee pensions alone are a trillion. The state pension more. The state second pension another huge sum. PPI another chunk. Then you have the actual borowing of Gilts.
20% OFF COUNCIL TAX WOULD WIN THE CONSERVATIVES THE ELECTION!
PAID FOR BY GOOD MANAGEMENT OF LOCAL AUTHORITIES.
Re: Brown and Mariella Frostrup. Brown was calling for celebrities to take a stand against drugs. Now, I'm sure that Ms Frostrup is a clean living girl whose past life would withstand any scrutiny from the gutter press, so why doesn't she put her name to Gordon's anti-drug campaign?t
It's not their own money is it though. The people whose money it was are dead. I have to say I'd much rather the Government took my money when I didn't need it any more than out of my paycheque when I do.
Buy to Let is stalling a bit in the face of interest rate rises. I'd love to see it 'in ruins' personally (certainly the irresponsible 'borrow to let' market), but give a British person a house and the last thing 99% of them will do is sell it, it's a national psychosis.
Brilliant speech by George Osborne, a real vote winner.
The unity in the hall was great to see too. Brownite stooge Kevin Maguire looked sick afterwards. No dissent, just solidarity, not the script the New Labour apparatchiks in the media were hoping for.
Watch the polls change in the Tories favour later this week.
Quite absurd to prioritise a tax cut to people inheriting £1 million pound homes over taxing income.
Further evidence that these Bullingdon boys are quite out of touch.
Eton for them but no grammar schools for us.
£1 million tax free inheritance for them, 41% tax for those who have to earn a living.
Tax on your family holiday for us, free stay at a relatives country estate for them.
Excellent George. About time.
Whatever the squealing there is no way a family home should be subject to a tax purely based on class envy.
The very rich don't have to pay it anyway, it's only borderline cases who didn't plan that get caught, usually those with rather modest homes and incomes. (you see what you can get for £300K in London area!)
Iain, one of my hobbies is to look for disingenuous comments from political 'commentators' from all of the political parties (Liberal and Conservative).
To say that 'houses pass through the generations' allows entry to the Tory (exclusive) club of disingenuous comments I'm ple...afraid to say.
If an elderly frail person goes into an old peoples home (departure lounge) then what happens to that house that current generations are trying to bag into an off shore account?
Georgie boy says what??
Gary
A true Tory would abolish IHT in its entirety.
Increasing the threshold is mostly window dressing I'm afraid although obviously of benefit to some.
Did he say IHT would in future be indexed to the cost of living ?
Does anyone know what happened to the idea of moving to flat taxes o income? Osborne declared that he was quite enthusiastic a few months ago.
Is there a word missing from the quotation in your last para? It raises an amusing image of Wee Georgie Osborne standing on the Blackpool seafront with a trestle table trying to flog off clapped-out knights of the shires, but I'm not sure that's exactly what some of your interlocutors meant...
Its a potential election winner. The response from Labour/BBC will be:
1) It can't be paid for, then latter
2) Its for the rich, then latter
3) To announce the same policy themselves, but with added regulation and control.
Inheritance tax credits ? You know Gordon Brown wants to ....
Osborne's great speech has brought out the New Labour trolls squealing with faux outrage.
Still think you're going to walk the election do you boys or is your brave leader having second thoughts?
Osborne also performed very well on the Today programme this morning - Very assured, relaxed and good-humoured in the face of Naughtie's traditional huffing, puffing and squinnying. Notice that the egregious Naughtie had to give a sly reference to Ashcroft when non-domiciles were mentioned.
Osborne's inheritance tax plans are well judged, fair and are not just for Christmas (great line that). Definitely a vote catcher. No wonder the trolls are squealing.
I agree with Anonymous 1:35 - Prioritising inheritance tax? Hello? I'm not saying I agree with inheritance tax; I don't, but how many people pay it? How many extra votes is this proposal going to garner? It does indeed demonstrate how out of touch with Britain the Bullingdon boys are.
There are hordes more people only earning around 12,000 a year. They should be taken out of the tax system. In fact, I'd raise the level at which people start paying taxes to 13,000. How the hell can anyone pay a mortgage - or rent - and pay for public transport to get to and from work (or run an old banger) and have children on what's left after 12,000 is taxed? It's obscene. And that's without any opportunity to save a few pounds a week.
And they're concentrating on inheritance tax payers? They still have it bass-ackwards and they are going to lose the election because they do not know how to talk to their fellow citizens.
Let's hear about cutting the public sector by one-third. Let's hear about the abolition of every single quango in Britain and save huge tranches of taxpayers' money (and also get rid of a bunch of sinister people who operate under the radar of public scrutiny).
How about making it illegal for local councils to set aside social housing stock for immigrants and push them to the head of the queue over our native Brits? That will get them votes.
How about abrogating the "right" of immigrant children who can't speak English - who hold back classes of indigenous British children - to education until they bloody learn it?
Inheritance tax! Dear God! These people have never once shaken hands with the reality of life in Britain.
Vote Conservative - The Posh People's Party! Who cares about all the little scrotes swilling around the lower levels?
Buy to let aka the scheme that lets a poor man pay a rich man's mortgage.
I'm sure letting a few toffs off paying death tax will play wonderfully well in the key marginals and won't give Labour a reason to say "look we told you, they care only for their own class" at all...
Giddeon Osboure for Chancellor; have you all gone bonkers. No a hope. A tax break for people with a 1 million pound asset….oh dear.
Isnt the Inhertance Tax issue the property of the The Daily Mailers. If you think that is a vote winner then you are blinder than I ever thought.
This is a sensible move, hard for Labour to attack as it is an upshift in the starting point so helps the poorer end of the scale. This has been a growing issue because House price inflation has been 10 times greater than the growth in the IHT threshold so incrementally more people are getting stung. It is hard to justify presenting grieving relatives with a tax bill of many thousands of pounds simply because they are unfortunate to have a relative that has died who lived in a house that has shot through the tax barrier.
Labour stooge on Radio Five phone-in this morning denouncing the stamp duty measures:
"reduced tax will feed through into spending and this will result in higher employment and, because the economy is already at full employment, this will result in more immigrants!"
So there you have it, vote for Tory tax cuts and be swamped by nasty foreigners.
Surely, this must be the rantings of a loner and not a hint of future election tactics from NuLab?
Good move.Reform of IHT plays well with the older generation.These people always cast their votes.
"It is hard to justify presenting grieving relatives with a tax bill of many thousands of pounds simply because they are unfortunate to have a relative that has died who lived in a house that has shot through the tax barrier."
Which would you rather have then, a £600,000 asset and a £120,000 tax bill, or a £100,000 asset and no tax bill?
How about some proposals for people whose relatives live in rented houses, or who face more death-related expenses than the estate of the deceased is worth? I thought we were in a new era for Conservatism...
Great Speech by Osborne.You know you've scored a hit when the left and their stooges in the media start rubbishing it almost before the speaker has sat down.
If Gordon's watching he must starting to have that sinking feeling in his stomach.
Cameron also did a good i/v with Adam Boulton on Sky.After the i/v Boulton made the point that the word is that Gordon has "painted himself into a corner. He calls an election and risks the polls being wrong or he bottles it and get accused of being "frit" to use one of the phrases of his new pin-up - Mrs T !
A lot of voters still haven't made up their minds. This week could start to reverse the opinion polls and we haven't started on the election campaign proper yet when we start to take Gordon to bits piece by piece by piece for his abysmal record over the last decade.
Gary old chap
Since you can buy half of Stoke-On-Trent for under £300K then I can see why this is a non issue to you.
In the South, where the election will be won, failure to properly raise IHT thresholds has brought modest homes, and people who could never be described as rich, into this tax, which is especially cruel in a time of great distress. Add the disgraceful way your master has put council tax burdens onto subsidising Labour heartlands and I can see why this overdue proposal has got your lot very worried.
Since millionaires can legally avoid IHT (you rightly identify one vehicle) the accusation that this is a posh peoples tax concession is very wide of the mark, as inaccurate as Brown claiming a tax cut and screwing the lowest paid by removing 10% rate - much more damaging to the poor than anything Osborne talked about today.
Yes a very good speech from George but not so good as William's. The Tories new tax policies are very good and will encourage both a high Tory turnout at Gen.Election and some movement from other parties.
"Most importantly it means that family homes can be passed through the generations more easily."
Thus making it more difficult for people to get on the housing ladder.
What utter contradictory bollocks this is..
charlotte corday - good to see that it isn't just the Independent that is willing to get down and dirty in the gutter with a cheap-shot smearing campaign..
Would you like it if someone smeared you with allegations that you had been a drug-dealing crack whore ?
So if you can't take it, honey, then stop dishing it out..
A one bedroom, sitting room, kitchen and bathroom, third floor walk up in Holborn and St Pancras costs over £300,000. And they aren't lived in by millionaires, that's a Labour constituency,Camden,and a mixed, working people's area; and it's liable to inheritance tax. Every dwelling in Holborn and St Pancras is liable to inheritance tax. Brown's obscene in his taxation levels, creating poverty and making working people apply for their money back and their savings and their parent's savings back, and be humiliated by means tests and vile bureaucracies.
While Mr Osborne is at rectifying this he could end gift tax as well, so families can use savings and increases in their house values to help the next generation start up their own business, as well as buy somewhere to live.
The Labour state should back off everyone's lives. Thank goodness the Conservatives are offering to give families and individuals some chance to run their lives their own way.
hatfield girl - I'm interested to see that you think the answer to having properties in 'Labour area' [what on earth does that mean?] for £300 k for a flat is the abolition of IHT.
Most people in this country DO NOT live in London !! And yet they are caught by the 'smoke-and-mirrors' of thinking that their wealth is hugely increasing when it is built on the illusory increase in property prices.
Look in today's Telegraph - prices of flats 'bought-to-let' already falling off a cliff by 40%.
If that was repeated all across the country then fewer people would be priced out of the market by buy-to-let, and we wouldn't need to worry about the Inheritance Tax rates.
The fact that Tories think this is the main priority demonstrates how massively out of touch with common or garden ordinary voters they are.
For all the nay-sayers - my own modest little terrace in Finchley is already worth half a million and I have been very worried about what will happen after we die. We have worked to keep our home during the very lean times and I would rather burn it down than let the taxman have one penny. And it is not just London. Property prices in Northern Ireland have soared since the peace as they have all over the country. A tax break for the posh? Get real!
4.45 If Brown hadn't closed down every single way of making money for working people without paying 40% stoppages, except for house purchases then people would be using their money to do something else. If the New Dawn New Labour party hadn't attacked every aspect of family life by making it necessary to atomise family units into benefit attracting state- acceptable units then the state wouldn't need to be so big and families could be responsible for the nurture, education and care of their own in every generation with their own earnings and savings and choices. Your statist ideology wants everyone to face the state and not
each other by draining off all our resources whatever we do.
And the fact that most people don't live in London is irrelevant - working people do live in Holborn and St Pancras and they're being taxed out of their skins, just as are working people all over England.
Earth to Tories, earth to Tories .... oh never mind Spaceship Cameron has clearly lost all contact with the planet on which most of us voters live.
Do we really want to kick out Brown for this out of touch shower? Oh God it's another 5 years of Labour I'm afraid.
Anyone impressed by Osborne could most politely be described as easy to please.
There is obviously a limit to what can be said on the Internet while matters are ongoing, but plans for a new party are now very well-advanced, and we will certainly stand a candidate in every constituency if the next General Election happens at the conventional time of spring 2009. Indeed, we expect to be the only party to contest every seat in the House of Commons, throughout the United Kingdom.
Ours will be a One Nation party, with an equal emphasis on the One and on the Nation: a pro-life, pro-family, pro-worker and anti-war party of economically social-democratic, morally and socially conservative British and Commonwealth patriots. There is not the time to register it between now and an Election this year, but several of our people would still hope to stand as Independents should such an Election take place.
Ours will be the only party of conservative values: of British independence, the Union, real education, the countryside, agriculture and small business, law and order, family values, energy independence, and co-operation with Russia on the basis of shared values deriving from Classics and the Bible. The only party of Disreali's One Nation.
Ours will be the only party of liberal democracy: of freedom, social justice, a real NHS, peace and disarmament, the countryside, agriculture and small business, British independence, and a real voice for the remaining old Liberal areas that have had to vote for the Lib Dems despite having nothing in common with them (and which have been completely ignored economically and politically for their pains). The only party of Lloyd George, Keynes and Beveridge.
And ours will be the only party of labour: of social justice, public transport, workers' rights, local government, a real NHS, peace and disarmament, British independence, freedom, and a real voice for the areas that have supported Labour in the past (much good it has done them). The only party of Attlee, Bevin, Morrison, Bevan and Gaitskell. The only true heirs of John Smith.
Watch this space.
Mr Lindsay, If you wish to rid the country of authoritarian statism you must vote Conservative. This vote does not express agreement with all that Conservatives stand for, but such is our electoral system then you vote for excluding what is most dislikeable, not for a utopian (to you) and unachievable regime.
Those who think IHT only affects a small minority should consider a statistic quoted in the Notes for Editors for Osborne's speech that 37% of households are vulnerable to IHT at the present threshold, but only 2% if the threshold is a million. For details on why this figure is consistent with the "6% of estates" that the socialists quote, see my comments on today's ConservativeHome thread on this.
Which planet are the people living on who think that something greatly to the benefit of more than a third of households is an irrelevence, particularly when the actual cost of the concession is so small?
And for the person who said "passing houses down the generations" would worsen the housing shortage - what do they imagine the inheritors will do with the house? They will either rent it out or someone from the family will live in it (often selling their existing property). It makes absolutely no difference to the housing stock. And if it is rented out for a while, surely that's rather more stable than a rented-out house that's been bought on a 100% buy to let mortgage?
This is popular, and it's right of centre - a combination that always greatly annoys the left. No-one is suggesting it's the one and only tax policy, but it's good nonetheless.
While I'm personally pleased because IHT is a tax on aspiration, I would prefer the money to be spent on taking the lower paid out of tax or at least reducing it substantially. That would really mean something to the hard-working classes and pensioners etc and it would show up Gordon's disgraceful decision to raise the lower rate of tax by 100% in his last budget (from 10 to 20%). What they now need to do is make the case for reducing spending: we simply don't need the vast number of quangos and people doing non-jobs (diversity co-ordinators etc.,) who've been put on the payroll with gold-plated pensions at our expense. Still it's a start.
While I'm personally pleased because IHT is a tax on aspiration, I would prefer the money to be spent on taking the lower paid out of tax or at least reducing it substantially. That would really mean something to the hard-working classes and pensioners etc and it would show up Gordon's disgraceful decision to raise the lower rate of tax by 100% in his last budget (from 10 to 20%). What they now need to do is make the case for reducing spending: we simply don't need the vast number of quangos and people doing non-jobs (diversity co-ordinators etc.,) who've been put on the payroll with gold-plated pensions at our expense. Still it's a start.
Ho Ho...Nu Labour astro-turfers all over this one..
Osborne must be doing something right.
Stamp duty abolition just puts up house prices by £1600.Basic supply and demand.
6% of people pay inheritance tax.
Under the new rules 1%.
So 5% benefit
And wait till the non domicile stuff unravels.
Hatfield Girl (is that Hatfield College, Durham?), what do you mean by "authoritarian statism"?
There can be no liberty without the authority necessary in order to protect it, nor any authority (as radically distinct from raw power, brute force) without the liberty that provides it moral basis.
Marxists, including neoconservatives, are correct that the family, private property and the State have a common origin, with each absolutely necessary in order to maintain the other two.
But Marxists, including neoconservatives, are wrong to see this as a bad thing, and therefore to desire the withering away of the State, which they know would be the withering away of the family and of private property, and which they want precisely for that wicked reason. Such a position is in no sense conservative.
However, this is all academic until a new party emerges. The Tories have no intention of "ridding" Britain of anything. They like things exactly as they are. They just happen to believe that they themselves should be running them, for class reasons.
A vote for the Tories is a vote to keep things exactly the same apart from that the positions of Prime Minister and Chancellor of the Exchequer would be held, as of right, by members of the Bullingdon Club, simply as such.
Hang on a minute.
The non domicile stuff is already unraevelling.
Turns out loads of people ar Nurses,average paid city workers .
Well who could've gussed that eh Ian.
Not vote for neo-conservatives, Mr Lindsey, just vote for the ordinary common or garden variety Conservatives who, for all their sins, are recognizable as a small state, low tax, no identity card, committed to the constitution's restoration and reinforcement, let us have a vote on losing our national identity within the European Union, sort of party.
I have visited the lovely city of Durham but was not a member of the university there.
"small state"
Never really were: Margaret Thatcher just moved the public sector from real things like coal and steel to the administration of the administration of administration.
"low tax"
Again, never really were. And certainly aren't now!
"no identity card"
Michael Howard came up with the scheme, and the Tories certainly wouldn't repeal it if it were already in place when they came to office.
"committed to the constitution's restoration and reinforcement"
Where?
"let us have a vote on losing our national identity within the European Union"
Remind me who it was who signed the Treaty of Rome, the Single European Act and the Maastrict Treaty. The Tories have still not left the EPP, and it seems more than fair to say that they never now will.
A referendum on the EU Constitreaty would in any case deliver a Yes vote, for reasons that I have set out in the past. We don't need a referendum; we need Parliament to do its job properly and just say No. No chance of that from the Tories. Cameron hasn't even said that he would campiagn for a No vote in a referendum, only that such a thing should be held.
All in all, Hatfield Girl's depiction of the Tories is certainly not "recognisable" to me.
This is a winner for the Tories - as they will never need to pay out in this promise to raise IHT thresholds.
The reason ? Since the chance that they will be for long term care of the elderly [as happens in Scotland] is twenty per cent of fuck all. So all that 'inheritance' will disappear into the bank a/cs of the likes of Dr Chai Patel.
So this is like that 'Northern Rock' promise - since it will not be called on, it doesn't cost a dime to make..
IHT is fundamentally immoral, and so I am pleased the threshold would be raised.
However, this is not a vote winner. As others have previously pointed out, The Tories need a swing from Labour in marginal seats to win the next general election. How many Labour voters in marginal constituencies have estates worth more than £325,000, and are now planing to vote Conservative to avoid IHT?
Surely a better tax cut would be one that benefits everybody, but especially those on low-middle incomes? A two-pence cut in the basic rate would be nice. But even better would be to double the free allowance to around £12,000, taking many part time and low income workers out of tax altogether, and removing the need for expensive tax credits!
What's wrong with inheritance tax? I don't want my parents house or my parents money when they're gone, I didn't earn it. I don't see anything wrong with the Government taking a large slice to ease the burden on the living.
letterman - if you don't want the money saved by not having to pay IHT on your parents' estate, then you have the chance to give the money to a charity of your choosing. Rather than one of the Govts choosing...
letterman - what Marqee Mark said.
By the way, letterman, do try to remember the possessive apostrophe. There's a reason for it.
I don't want my parents house or my parents money when they're gone, I didn't earn it.
Good! Because loads of immigrants will soak it up before you have a chance to change your mind. (They didn't earn it either. Who do you think your parents would have preferred to get it? A Somali family of six illiterates who live under shariah law as practiced in their "gars" in London, or their own child? Tough choice for liberals, I admit.)
Verity said :
"shariah law as practiced in their "gars" in London, or..."
the word is "practised", not "practiced".
A new £1m threshold for inheritance tax will mean a £270000 cut for estates worth £1m or more, tapering to zero for thos worth £325000 or less. The change in stamp duty will mean a cut of £2500 for those who can afford a first-time property purchase of £250000, tapering to zero for thos who cna afford a property of £125000 or less. I wish Osborne had provided relief a little further down the scale.
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