In and of itself, there is no virtue in working, much less working hard. Tory ministers appear to disagree. The Conservative party conference was plastered with the phrase “hardworking” – “For Hardworking People”, the legend boasted from the platform – and a host of frontbench speakers milked the term for every last residue of rhetorical worth. This began a few months ago when George Osborne started his – God help us – #hardworkingpeople tweets. And it’s all been downhill from there.
Yet today the party announced that if re-elected:
….parents will be offered a new £175,000 allowance to enable them to pass property on to children tax-free after they die.
There’s clearly a contradiction here. If you wanted to reward work, your priority would be cutting income tax or boosting working tax credits. By contrast, an inheritance tax cut rewards people not for their effort or entreprenurialism but having the foresight to emerge from the right uterus.
Opponents of inheritance tax talk as if it is uniquely burdensome. In fact, what it is is particularly troublesome for the people they socialise with. As I’ve blogged before IHT has an enormous zero band rate (up to £650,000 in some cases), sweeping exemptions and can often be paid in installments. It should also be noted that it’s paid by just 4% of households. The advocates for whinging wealthy will protest that this percentage is higher in London and the South East. What they actually mean by that is that the people paying IHT in these regions are less of a minority than in the rest of the country. It also never seems to occur to them to explain why the fact that the upper middle classes of London now pay IHT makes cutting it a priority, when a big majority of households across the country pay income tax, national insurance and VAT.
George Osbourne claimed this new policy was ‘about values‘. I’m afraid I agree. Consciously or (as I suspect) otherwise, this reflects a worldview in which the interests of the affluent are paramount. What it shows very clearly is that the Tories are no more opposed to entitlement than Labour. Rather they embody the sense of entitlement of people angry at only being able to inherit £325,000. A party that claims to stand for self-reliance winds up prioritising people who think they need more of Mummy and Daddy’s money and concluding that lives already blessed by all the advantages of being raised by an upper-middle class family need a further boost. Beneath the focus group tested platitudes Cameron and Obsbourne use to sell this policy is a much clearer message: life has given us so much but we want even more.
It is a policy that is not merely weak but basically indefensible. It is profligacy in a time of austerity. Even more than that it is an insult to the majority of hard working people who this policy will do nothing for.