by Labor is considering an inheritance tax raid to “redistribute” wealth if it comes to power, a leaked front bench recording suggests.
Darren Jones, the shadow chief secretary to the Treasury, told a public meeting that he expected the “political consensus” that inheritance tax should be used to address “intergenerational inequality”.
It comes at the end of an election campaign in which tax was a key battleground, with the Tories claiming households will pay more than £2,000 extra under Labour.
Labor has consistently refused to rule out rises in inheritance tax, capital gains tax or council tax, after saying the party will not cut income tax, VAT or National Insurance if it wins Thursday’s election.
In the recording, Mr Jones says that “huge amounts of wealth are coming through the system through inheritance”, which is why Labor wants to keep taxing people’s estates.
On the final day of the campaign on Wednesday, Rishi Sunak is expected to launch a last-ditch effort to win over swing voters with warnings that Labor will tax their homes, pensions and cars.
In an interview with the Telegraph, Mel Stride, the Work and Pensions Secretary, said Labor would repeat the mistakes of the Blair era and send the benefits bill “out of control”.
The Prime Minister was holding a campaign rally in London late on Tuesday night, to be on a tour of the country on Wednesday.
The latest poll suggests the Tories have narrowed the gap to Labor slightly to 19 points, but would still face heavy losses, with Labor commanding a large majority in the Commons.
The Conservatives claimed Mr Jones’ comments had “let the cat out of the bag” on Labour’s plans to tax family homes, but Labor said it was “absolute nonsense” to suggest the comments showed tax increases.
It is estimated that the number of estates subject to inheritance tax will increase by 50 per cent in the next five years, as the thresholds at which the tax is payable are frozen and house prices continue to rise.
Mr Jones will be No 2 at the Exchequer if Labor wins the election and Sir Keir Starmer gives him the same care in government. This would give him a direct say on taxation.
The Telegraph has previously reported that, at the same meeting, he was recorded saying Labour’s green energy plans would cost hundreds of billions of pounds.
At the public meeting, held in Bristol village hall in March, he said: “We had a bit of a debate [on inheritance tax] in Westminster because there were some plans to end it.
“We said on our side of the House that we didn’t think that was the right thing to do, because this kind of bulk was going through the system of huge amounts of inherited wealth in our country, more or less. of housing asset values.
“And while we don’t think capital gains on primary residences is the right answer, we think the inheritance tax regime – although some people say it’s unfair because they say it’s double taxation – is the biggest point of intergenerational inequality we think important that inheritance tax remains because it allows you to get some of that value back in, to be able to redistribute through the generations.
“It’s not a silver bullet, but the political consensus is likely to be there. You could say, in relation to inheritance tax, you have to think of inheritance tax as a way of redistributing money.”
Inheritance tax is currently charged at 40 per cent on the value of an estate over £325,000. It has been described as the most hated tax in Britain because the money used to buy a family home is already taxed through income tax.
The Conservatives have considered scrapping the tax altogether, but Labor is unwilling to hand in the £9.7 billion a year it is expected to forfeit by 2028/29.
Currently, around four per cent of estates are subject to IHT, but by the end of the next Parliament in five years’ time this is expected to rise to six per cent as the £325,000 threshold is frozen until 2028, attracting more and more people. into death taxes.
Laura Trott, Chief Secretary to the Treasury, said: “Although Labor is campaigning on a ‘nothing to see here’ policy platform, they are telling journalists off the record that they are planning a range of total new taxes if elected. Now we know where they plan to tax first. People’s family homes – the cornerstone of most families’ financial security.
“This is what Starmer’s supermajority is all about – tax increases on hard work and ambition. If you want to stop Starmer’s supermajority, the only way is to vote Conservative on Thursday.
A Labor spokesman said: “This is complete nonsense. Nothing in our plans calls for any additional tax increases. We have laid out fully costed, fully funded plans, and there are very specific tax loopholes that we would close. We have made it clear that raising taxes is not our interest – our priorities are economic growth and making working people better off.
“£71 billion unfunded election promises, shaming the country and our veterans at D-Day, and lying through their teeth to cling to power. Who would expect improvement from a Conservative Party when, after 14 chaotic years, they cannot point to a single achievement?”
