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

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

The Tory grandee stated he doesn’t “purchase” the argument that the tax on inherited wealth is broadly hated – telling the PM to deal with reducing earnings tax as an alternative.

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

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

However Lord Lamont, chancellor underneath John Main between 1990 and 1993, stated reducing it solely advantages “a small variety of individuals”, including: “I don’t actually purchase the argument that it’s a lot hated by everybody.”

“The most important variety of individuals ought to profit from no matter is feasible,” the Tory peer advised The Telegraph. “My precedence can be [raising] earnings tax thresholds. They have an effect on the most individuals.”

Lord Lamont added: “I believe you wish to give some aid to individuals who have paid the value and have needed to pay for a few of the measures that have been launched in the course of the [Covid] pandemic. I believe the common particular person want to see slightly mild on the finish of the tunnel.”

Regardless of 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 Research 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 offer nearly £10bn a yr 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 keeping with The Telegraph. However 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 individuals on decrease incomes – moderately than reduce inheritance tax for the wealthiest – in March.

“We should always think about incomes and thresholds moderately than inheritance tax. That produces extra profit for a higher variety of individuals,” John Stevenson MP, head of the Northern Analysis Group, advised the Every day Mail.

Former minister Neil O’Brien, Tory MP for Harborough, stated Mr Hunt ought to provide “tax cuts for these on the backside finish to assist with the price of residing, and tax cuts that increase productiveness”.

Nonetheless, many senior Tories are nonetheless pushing for the PM and chancellor to behave on inheritance tax. Sir Jacob Rees-Mogg stated inheritance tax was “a pernicious and unhealthy tax, which should be scrapped”.

Former chief Sir Iain Duncan Smith stated: “I’d scrap it altogether. The political influence can be monumental.”

And Ranil Jayawardena, chair of Liz Truss’ group of allies, the Conservative Progress Group, stated: “Time is working out and the federal government must be daring: it’s time to scrap inheritance tax.”