Labour’s inheritance tax must be scrapped

The Tories should commit to abolishing this attack on the prudent and family-minded

How have we managed to create a world where a dwindling band of taxpayers is funding a growing number of able-bodied people to live relatively comfortably on benefits without even being required to look for work?

As the welfare bill balloons, the Government has to find more money because its own MPs will not let it cut payments or tighten the rules. Since the Chancellor Rachel Reeves has promised not to increase borrowing or add to the taxes of so-called “working people” she is forced to look elsewhere, notably at pensions and savings.

Now she is targeting inheritance tax (IHT) to plug holes in the finances ahead of an autumn Budget. Treasury officials have been told to examine greater restrictions on gifting money and assets.

The tax burden is at its highest for nearly 80 years. Taxpayers who are by no means rich are dragged into paying higher rates by the pernicious freezing of allowances. The minority of earners who contribute the most in taxes have gone along with this in the expectation of being able to help their children with any accumulated wealth left to them by a rapacious state.

If the morality of this tax is questionable, tougher rules are not even politically advantageous. Polling shows it is probably the most unpopular tax of all, even among people who are unlikely to have to pay it. It would be a desperate act to tighten the rules further, but Ms Reeves is cornered.

IHT is a tax on the prudent and family-minded. It involves being taxed when you die on wealth that was taxed while being accumulated in life, and therefore discourages wealth creation and retention. In drawing up their new policies, the Tories should commit to its abolition.