On three occasions last night, Gordon Brown asked David Cameron why he was proposing to raise the inheritance tax threshold to £2,000,000 for married couples. On camera, the Tory leader gave an evasive answer. Off camera, he is alleged to have told an audience member, “it’s only a small amount of money”.
During the debate, Cameron said:
“Now, let me answer this question directly about inheritance tax. I believe in this country that if you work hard and you save money and you put aside money and you try and pay down your mortgage on a family home, you shouldn’t have to sell that or give it to the taxman when you die. You should be able to pass it on to your children. It’s the most natural human instinct of all, and I’m afraid these other two parties simply don’t understand that.
“Inheritance tax should only be paid by the richest, by the millionaires; it shouldn’t be by people who’ve worked hard and done the right thing in their lives.”
After the debate, speaking to Keith Bevan – a member of the audience – David Cameron is alleged to have said, “it’s only a small amount of money”. The exchange was relayed by Mr Bevan to listeners of Radio 5 Live:
A Parliamentary Answer from October 2009 says:
“The cost of increasing the inheritance tax threshold to £1 million with effect from April 2010 is estimated at £500 million in 2010-11, £1.2 billion in 2011-12, £1.4 billion in 2012-13 and £1.5 billion in 2013-14. Forecasts beyond 2013-14 have not been made.”
Today’s Guardian fact-checks Gordon Brown’s statement that will, “give an inheritance tax cut to the 3,000 richest people in the country of £200,000”. They conclude:
“Raising the threshold would allow those people to pass on more of their estate tax-free. But it would also benefit around 8,000 families who inherit an estate worth between the current threshold of £325,000 and the £1m mark. Verdict: Correct, but not the whole story”
The £1.2 billion bill for the total of 11,000 estates averages £109,000. The biggest winners could gain £540,000 which is “more than 13 times the cost of the average house in the UK” according to the New Statesman which is more than three times the average house price.
A small amount of money? As Nick Clegg said of Camera’s on camera response, “that’s the most creative justification I’ve ever heard for giving tax breaks to double millionaires.”
UPDATE 17.05:
I’ve just received a call from the Conservative party press office saying that David Cameron denies making the remarks in the “strongest terms”. As some commenters have pointed out, unlike Rochdale, there’s no recording of the remarks so it’s Mr Bevan’s word against Mr Cameron’s.
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155 Responses to “Cameron off camera: inheritance tax cut is “only small amount of money””
Evan Price
The cost to the Country of the increase in the threshhold to £1million would be, at worst, a small sum of money in terms of Government receipts – and it is smaller than it would have been had Labour not decided to allow married couples to transfer their nil-rate band… so whilst it can be spun that he was referring to a small sum of money for an individual, what I suspect he was talking about was the revenue raised by this tax and the reduction in that revenue as a result of the proposal.
I have seen no commitment by the Conservatives that they would continue the transferrable nil-rate band …
Entertainingly, for a party that is committed not to recognising marriage in income tax, Labour was prepared to recognise marriage in inheritance tax through the transferrable nil-rate band.
Lynn Jackson
RT @leftfootfwd: Caught off camera: Cameron tells audience member inheritance tax is "only small amount of money" http://bit.ly/a3a6mp
Jody Raynsford
RT @tommilleruk: Cameron gaffe on inheritance tax: http://tinyurl.com/3254bpe
Angry Walrus
Will,
Cheers for the fix. The simple picture behind the IHT cut is that the people who pay the most tax get the most nomimal benefit from any Tax cut. Pretty much everyone who owns a house less than twice the average value will benefit.
Back to the actual article, in some terms Cameron is actually right, compared to the £17Bn annually to pay for the rise in the basic allowance for income tax (which I think is a great idea, but probably too expensive now) the cost of the IHT cut is over 30 times less. Both of these are staggeringly small compared to the cost of the debt we’re running up. (I posted a range of other things we could have bought with three years of Labour’s debt on my “blog”, amongst them were enough 747s to emmigrate the entire country in 20 flights!)
From an electoral standpoint, there are many (a majority?) of voters who feel that IHT is essentially unfair, and there’s probably much more value in driving those votes than making a 0.3% cut in the deficit (£500m compared to £170Bn).
AW
David Stone
@leftfootfwd What did CCHQ have to say about this? Did anyone hear the full quote? Needs more context. http://bit.ly/akAc2F