Ex-chancellor Norman Lamont says Sunak must ignore calls to ditch inheritance tax

Former Conservative chancellor Norman Lamont has urged Rishi Sunak to ignore calls from his personal MPs to ditch inheritance tax.

The Tory grandee stated he doesn’t “buy” the argument that the tax on inherited wealth is extensively hated – telling the PM to give attention to reducing earnings tax as an alternative.

Mr Sunak and Jeremy Hunt are below stress to ship tax cuts by 6 March, with the PM and his chancellor stated to be contemplating strikes to scrap or reduce inheritance tax.

Sir Iain Duncan Smith, Sir Jacob Rees-Mogg and different senior Tories have urged him to eliminate inheritance tax in a bid to increase the occasion’s polling fortunes forward of the overall election.

But Lord Lamont, chancellor below John Major between 1990 and 1993, stated reducing it solely advantages “a small number of people”, including: “I don’t really buy the argument that it’s much hated by everyone.”

“The largest number of people should benefit from whatever is possible,” the Tory peer instructed The Telegraph. “My priority would be [raising] income tax thresholds. They affect the most people.”

Lord Lamont added: “I think you want to give some relief to people who have paid the price and have had to pay for some of the measures that were introduced during the [Covid] pandemic. I think the average person would like to see a little light at the end of the tunnel.”

Despite calls from the Tory proper to scrap the “hated” inheritance tax, fewer than 4 per cent of estates within the UK pay the levy on inherited property, cash and shares.

The revered Institute for Fiscal Studies says the wealthiest 1 per cent of individuals in Britain would obtain 47 per cent of the advantage of scrapping it. Inheritance tax is forecast to present nearly £10bn a 12 months for the general public coffers by 2028-29.

A plan to abolish inheritance tax is being contemplated as a part of a “gear change” on tax, in accordance to The Telegraph. But No 10 and Treasury sources have performed down stories as hypothesis.

Some red-wall Tory MPs have additionally urged Mr Sunak to herald tax cuts for folks on decrease incomes – quite than reduce inheritance tax for the wealthiest – in March.

“We should concentrate on incomes and thresholds rather than inheritance tax. That produces more benefit for a greater number of people,” John Stevenson MP, head of the Northern Research Group, instructed the Daily Mail.

Former minister Neil O’Brien, Tory MP for Harborough, stated Mr Hunt ought to supply “tax cuts for those at the bottom end to help with the cost of living, and tax cuts that boost productivity”.

However, many senior Tories are nonetheless pushing for the PM and chancellor to act on inheritance tax. Sir Jacob stated inheritance tax was “a pernicious and bad tax, which ought to be scrapped”.

Former chief Sir Iain stated: “I would scrap it altogether. The political impact would be enormous.”

Meanwhile, Ranil Jayawardena, chair of Liz Truss’ Conservative Growth Group, stated: “Time is running out and the government needs to be bold: it’s time to scrap inheritance tax.”