Whose reform?
We'll know soon. Or rather we won't quite.
The Treasury is about to release information about what advice was submitted to the chancellor and when about changes to the inheritance tax regime. This is in response to a Freedom of Information request made some weeks ago which the prime minister alluded to in his fiery exchanges with David Cameron at the dispatch box on Monday.
You may recall :
David Cameron: "I tell you what, look me in the eye and tell me that you were planning to reform inheritance tax before our party conference. Can the prime minister look across the Dispatch Box and just say it?"
The prime minister: "The answer is yes-unequivocally yes. Every year… All the records will show it, under whatever rule they are released under the Freedom of Information Act."
The information which will be released will show that:
Gordon Brown considered inheritance tax reform up to a few days before his last Budget in March. Specifically, he was given advice on the "transferability of nil rate IHT allowances" in March. This was the measure which his successor Alastair Darling announced in October.
Furthermore, the Treasury will reveal that Darling commissioned further advice on this in August, responded to that advice and continued receiving more papers up until mid September - before the Tory conference.
So, will this prove that the government were "planning to reform inheritance tax before our [the Conservative] party conference"? Yes and No.
Yes, it will be clear that ministers were considering and had asked civil servants to produce detailed proposals on inheritance tax reform well before and in the immediate run-up to the Tory conference. Furthermore, Whitehall sources tell me that the assumption in the Treasury was that this would be in the PBR and, indeed, detailed costings of the measure had been drawn up.
No, however, it does not prove that ministers had finally decided to include the proposals in the pre-Budget report before the Tories announced their plans. Final decisions on what goes in and what's left out of Budgets and PBRs are made in the last day or two before they're delivered (partly because the final economic forecasts are only produced at the last minute) After all, Gordon Brown considered the idea in March but did not announce it.
What it will be impossible to assert, I believe, is that ministers cobbled together an inheritance tax plan when they heard the shadow chancellor's speech at the Tory conference and then announced their hastily drawn up plans a week later.
I'm 
Comments
How long do you think it will be before Labour start accusing the Conservatives of pinching their policies?
I think your analysis is spot one Nick.
The way that Labour presented the change made it so obvious they had "stolen" the Conservative policy that it backfired on them.
A better approach might have been for Mr Darling to say " ok, it's a good idea and we have decided to implement it".
If a change is implemented that benefits people, most of them don't give a mokneys who's idea it was in the first place.
I can understand the reasons for covering this story but the political finger pointing and muck raking doesn't turn me on. I'm less interested in who comes up with a policy than whether it's any good, and that's something I'd like parliament to focus on more heavily. As much as a government could be opportunistic the competitive behaviour of the opposition parties doesn't help. Indeed, didn't David Cameron say some time ago that he isn't concerned about his whether his policies are (allegedly) stolen but that they are executed well.
I think, two improvements could be considered here. While planning can take place before reports I'm a bit puzzled why they're left so late. Then there's the issue of Freedom of Information. This can be useful but the way it can be used to rake over coals rather then contributing towards improvement does bother me. Again, shouldn't issues of quality and cooperation be at the front instead of more self-serving grab for power and attention? Perhaps, parliament may be able to shrug this off and deal with this in a more proper fashion.
So the soap opera continues whilst the redistribution of wealth continues in the upward direction...
Why don't we debate the weight of the tax burden on lower and middle income groups compared to the rich, instead of which politician said what when where bla bla bla...?
Nick,
Does it really matter who dreamt the idea up first? The point is that, like most other taxes - stamp duty, personal thresholds, higher rate tax, etc etc - under Gordon Brown's chancellorship inheritance tax was cynically allowed to fall behind real rises in house prices which make up most people's estates. Inheritance tax is a disgrace in my view anyway, whatever the level of allowance. It discourages people from saving and investing income which has already been taxed. "Fiscal lag" was a term of which I was blissfully unware until 1997. As one of the victims of constantly rising taxes which far outstrip any rise in my modest income I will be glad to see the back of GB and all his cronies. I may even be lucky enough for that to happen before I reach the point of having to apply to a soup kitchen for some succour. If only I could believe that Cameron would ease my burden if and when he achieves office, and while I can still benefit, not after I die.
I thought Vince Cable thought of it, George Osborne publicised it and the government implemented it.
To be fair to Gordon Brown he has been banging on about having a "government of all the talents".
So based on this it doesn't really matter whether or not the Contorytive Party thought it up first.
Coming Soon,,
From the Nulab government that brought you the Dodgy Dossier, the fiddled immigration figures, the double accounting, the recycling of policies, cash for honours etc etc,
The IHT Document,
starring
Backtrack Brown as "Shaky Hands"
and
Dippy Darling as " Northern Soft Rock".
Ably backed up by a cast of complete nitwits and incompetents mascarading under the title of Honourable and right Honourable Memebers of Her Majesties Government.
In the words of the Who song,
"We wont get fooled again".
I don't think it matters when Labour first considered the changes to inheritance tax, the point is they only acted after the Conservatives acted.
The fact of the matter is that David (ra ra Etonian) Cameron, accused Gordon Brown of lying. Mr.Cameron looked into Cameron's eyes as requested and told the truth. That bumbling fool Cameron and his silly little school yard friend 'Osborne' have lost another vote.
Fab another dodgy dossier!
I'm more interested to find out whose bright idea it was to muck about with treatment of employee share save schemes - scrapping the CGT taper relief makes a mockery of working people saving to buy shares in the company for which they work and then holding the shares for a few years.
Frankly, in my view, it's a bigger vote loser for Labour than inheritance tax as it bashes anybody who saves for a rainy day and has loyalty to their employer. And that's a lot of working class and middle class people.
Nick,
All Government departments produce policy ideas all the time, it doesn't make them Government policy.
The issue remains did the drafts of the PBR have the changes to IHT in them before the Tory Conference, and all of these half releases don't change that.
Nick
When dealing with slippery characters, questions posed need to be precise.It won't prevent lies being told but might make it a little more difficult. Cameron should have asked Brown to look him in the eye and tell him he had "decided" to reform inheritance tax before the Tory conference.
However, even when presented with the gift of a sloppy question, Brown fouled up by stating he had been planning to reform the tax "Every year" So why all plan and no action ?
The reality is that they were checking every year to look at the options/cost of reforming, just in case they were ever forced to do so by events.
Anybody who believes that the decision announced by Darling was unconnected to the Tory proposals would make an ideal customer for Del Boy or Arthur Daley.
Incidentally, there is much less to the resultant reform than meets the eye. The facility to use the tax free element of a spouse already existed via the inclusion of a very simple feature within in an inexpensive will.
I suppose the question is, Nick, what exactly did they think of? Married couples were already able to claim the full £600,000 allowance anyway.
However lets presume that this was a tax cut. How odd is it that a Labour government would remove the 10% band for the lowest paid but give tax breaks to the fortunate inheritor?
I am a former Tory who joined Labour some time ago. In the past few years i have made representations to Labour policy groups to the effect that there should be the capacity for couples to share their respective £300000 IHT allowances upon the death of the second spouse/partner. I would, therefore, like an apology from (Gideon......now George!) Osborne for stealing MY idea. I wouls also like to know why the leader of the opposition has undertaken a somersault in his previously expounded position of workin in tandem with government when HMG devises policies it (the opposition Tories) apreciates. No wonder I left the Tories.
As the Civil Service are impartial one would expect them to put forward a range of proposals, both acceptable and unacceptable to the current administration. Merely stating that a paper was presented entitled "Inheritance tax(IHT): transferable allowances" doesn't mean it was explicitly requested or whether the advice contained was 'good thing' or 'bad thing'.
All this shows is that the Civil Service are (I hope) still putting all the options to the Chancellor. His response to the note might well have been 'Stupid idea, get me more figures to illustrate just how stupid I think the idea is'
CGT & Corporation tax, now that is a big issue. Ireland has much more favorable IHT, Pension, Corporation tax and CGT policies, provides excellent assistance to new start business, is English speaking and is both in the Euro and favored by the USA. And they are talking about more tax cuts!!
Ireland is a really attractive option for entrepreneurs fed up with being mugged by Chancellor, demonized by the Labour Party and treated as pariahs in the press instead of being lauded as the creators of employment and wealth.
I am reminded of the Sun election day headline in '92 "will the last person to leave the UK please turn the lights out", Perhaps the headline before the next election will read "who will pay for the lights after the last entrepreneur has left?" alongside a picture of Clunking Fist and Little BigFoot.
Ryanair fly to Ireland for as little as 99 pence.
The Government may have considered it, but did nothing until it saw some polls post the Tory Conference. Says it all really.
Was this the tenth or eleventh change in the so called "Inheritance Tax" since 1997?
It bore VERY little similarity to the Tories trumpetted conference headline grabbing crude £1m limit, didn;t it? Just as I pointed out at the time and repeatedly since.
But the press and the ´óÏó´«Ã½ are tories or trots quite clearly.
So we had lies, the bigger the better it seems.
Now it is revealed that the Labour plan was already in process through HMG's machinery at the Treasury will we get any sort of apology commensurate with the porkies these Pinochios have peddled?
Will we 'eck as like.
I suppose that Brown could argue he thought of the IHT idea first,unfortunately every Tax, Income ,VAT,IHT,Corporation Tax,Council Tax is presumably under constant revue,or so the government will have you think.
The problem for Brown is that he very rarely did other than increase Taxes or bring in new ones.
Who's to say that actually he did think about IHT,he was thinking of REDUCING IT.
Come on Gordon "look me in the eye and tell me that you were thinking of decreasing the allowance"
Of course Justin is dead right. It was originally a Vince Cable proposal, so whether or not Gordon Brown is telling the truth about not nicking the policy from the Tories is irrelevant. They both half inched it from the Lib Dems: its a shame the media haven't acknowledged that.
"So the soap opera continues whilst the redistribution of wealth continues in the upward direction...
Why don't we debate the weight of the tax burden on lower and middle income groups compared to the rich, instead of which politician said what when where bla bla bla...?"
I think you will find that it's because inheritance tax hits so many 'middle' income people now that it has become a big issue. They are the group most likely to affect the outcome of the next general election.
Ian wrote:
"How long do you think it will be before Labour start accusing the Conservatives of pinching their policies?"
Last night on C4 news they did just that - "sources" stating that the Tories have a mole in the treasury feeding information then used to pre-empt government policy.
The tone of the piece was surprising in its apparently poor journalism (un-named sources, speculation and partially confirmed rumour) which I doubt was the case, C4 normally being pretty good.
At the end of the day anyone who asumes they are the only one to have had an idea is crazy. There are a lot of bright people around paid to just think stuff like this up, and the likelihood of similar topical policies being developed in parallel is pretty much certain.
The real issue is political parties reacting to public opinion rather than a set of beliefs and ideals, but to expect anything more these days would be too naive I suppose. I've said it in these pages before, we get what we ask for and deserve.
@ Edmund Price,
well, the date of the pre-Budget report is fixed, and the Tories knew it...
...so maybe they rushed to announce it at their party conference in order to steal Labour's thunder?
The government's unnecessary defensiveness did the rest...
@ John F,
The Who's (excellent) song is about revolution - I'm struggling to see your point in relation to parliamentary democracy - explain?
FREE THIS FREE THAT NOW THE GAMES ON TOP.THAT MAN SALMON IS THE SHINING LIGHT IN A SEA OF POLITICAL DROSS.AS OF THIS MOMENT I AM PACKING UP MY TENT AND HEADING NORTH.BEFORE I HAVE TO SELL THE TENT FOR FOOD.
Who cares who came up with the idea first - all that matters is that both the Government and the main Opposition Party are committed to changing the present system.
In my opinion, Labour have got it just about right, protecting the wealth of those who have worked hard and earned what they have got, as opposed to protecting those who have probably been overpaid for what they have done. And, more importantly saving money on unecessary legal manipulation.
Those who have amassed fortunes dont need any protection. They are well capable of looking after themselves.
As has been pointed out already with minimal tax planning couples could make use of each other's allowance prior to this. However, even so, this does simplify the process and cuts out the need for a solicitor.
A bigger issue is whether this is justified in the first place. I would consider myself middle class and I do not know many people who would leave estates in excess of £600,000 (after debts etc are paid off)Let alone the possible £2,000,000 (with tax planning) that could be tax free for couples under the tory proposals.
I would much prefer a higher threhold before capital gains tax kicks in. This would enable entrpreneurs and others who have invested wisely to make use of the profits they have made in this life.
When I die, if I have over £600,000, I do not think my heirs could complain too loudly that they had to pay tax on the excess. Especailly as they did not work for it, I did. Selfish I know, but I want a tax system that rewards the person who created the wealth, not those that benefit by luck of birth.
The sooner this Government is out the better? Incompetent fools, whom if they worked in the private sector would be hung out to dry.
So what are the consequences?
Everyone else is subject to the terms of the Data Protection act, which as far as many people are now concerned has been well and truly broken. Unlawful I think is the common terminology.
So who is going to come before the Judiciary to answer for this incompetence?
Hurray, at last people are waking up the the fact we have a grossly incompetent government and have had for the last ten years, the sooner they are sacked/kicked out the better. The latest fiasco at HMRC is just the tip of the iceberg.
Brown won the debate at PMQs because the government was doing what was right. Alistair Darling put in place solid action when informed and its not credible for Mr Darling or for Mr Brown to be blamed for the actions of one person not following procedure. That's why Cameron was failing to get anywhere on this issue and not because he was holding back. Cameron loves bandwagon's and not actually saying anything his fained anger is all part of the act. The media and press seem obsessed with ignoring facts in order to seek blame. The issue is a serious one but not in the over dramatised way the media and press portrayed it. Human error is human error, i find it strange that point is not understood.
I heard this morning on radio 4 that the Audit office had only requested the child name and NI number but the Inland Revenue said it was too costly to strip off the rest of the information. This is absolutely pathetic excuse. What I can not believe that people accept this type of excuses and should be challenged. I know this a lot of rubbish because it takes a couple of minutes to write a database query to do whatever you wish with the data and may be 60 minutes (at the most) to execute it and compile 25 million records which can run on its own without the need of the staff time. So this excuse is not good enough.