The Tax Battle that Led to the Bottle

Propeller-Head Wonk Watch: As Polly howls in pain this morning at the Brown/Darling rhetorical U-turn on tax, which she correctly recognises has razed the ideological ground ahead of Brown as he retreats, who should we credit for her torment. Osborne? Well yes, but why did he select inheritance tax and stamp duty as tax cutting priorities?

Matthew Elliott’s Tax Payers Alliance relentlessly highlighted the unpopularity of these particular taxes in the non-ideological language that practical politicians understand. They commissioned an ICM poll in August 2006 revealing that “significantly raising the threshold for inheritance tax, or abolishing it” was the second most popular cut after cutting Council tax. This September their YouGov poll confirmed that inheritance tax was perceived as being the most unfair tax of all and was the third most popular tax to be reduced, marginally behind lowering council tax and raising the tax-free personal allowance.

The poll findings made a deep impression on the Shadow Treasury team, proving that tax cuts could once again be a popular vote winner, giving Osborne the confidence to make the announcement that has turned around Tory fortunes. As Osborne takes the battle glory, remember who fired the opening shots…

+++ YATES TO SPEAK TO SELECT COMMITTEE 23rd OCT +++

Propriety and Honours: Lessons Learned

Date and Venue: Tuesday 23 October, 3.00 pm in the Wilson Room, Portcullis House

Witnesses: AC John Yates, Metropolitan Police, Carmen Dowd, Head of Special Crime Division, CPS and David Perry QC

Guido plans to be there too…

Last Man Standing

With Ming now facing the guillotine and Brown severely battered it is interesting to check what the bookies have done. The odds on Cameron being the only one of the three leading his party into the next election have been slashed from 25/1 to 6/1. Punters now think there is a good chance that both Ming and Brown will not lead their parties into the next general election.

The punters also reckon May 2009 is the favourite election date at 5/4 on. The most dramatic change is in the biggest party prices. Remember Guido’s crazy bet last month? Labour are 10/11 on and the Tories are neck and neck at 11/10 – in from 3/1. Lovely jubbly…

Thirst Aid for the Political Class

A co-conspirator writes:

MPs in Bellamy’s last night were being given priority service – with a queue for drinks, the barman by-passed those at the front and asked MPs joining the queue at the back what they would like. I saw this happen twice. I don’t blame the barman of course (or the MPs actually in the cases last night) – it is no doubt a directive from above telling the barman to do so.

But honestly, why do MPs need priority getting a drink? Is it because they have urgent things to attend to and need to get them down as quick as possible?

Is it important to their role as public servants that they get pissed quicker?

LibDems : The Game is Very Definitely On

Guido had lunch with a well connected LibDem who confirmed what outsiders already suspect. The two-year election delay means curtains for Ming. Freed from the fear of an imminent election there is a sense of release and a feeling that he can be replaced without electoral backlash – as if it was possible to poll worse.

Obviously the question is how? The party conference was disciplined by the shadow of an election, the annual LibDem MPs gathering has passed. Clearly ill-health would be the best face-saving excuse. The status anxiety of Elspeth is thought to prohibit both the passing to Campbell of the whiskey and revolver or hope of him going voluntarily. So how is it to be done?

Huhne and Clegg are soft campaigning for the succession, but spare some pity for the ambitious Ed Davey. As Ming’s chief-of-staff he can’t do anything that smacks of disloyalty.

There is no fool, like an old fool, if Ming stubbornly resists retiring it could get messy and humiliating. Guido can’t wait…

Gordon’s "Vision" Problem

Gordon on Monday kept repeating that he needed time to set out his “vision”. As Freedland points out this morning in the Guardian, he has had 13 years to figure out his “vision”, what is his problem?

Guido wonders if Gordon Brown is not only physically vision-impaired but politically vision-impaired as well. He is now reduced to making counterfeit copies of Tory policies. After 100 days he has not shown any vision for change beyond the old tax more, spend more agenda.

Ed & Yvette Profit Handsomely

So who did really well yesterday? Not small businessman, wacked with an 80% hike in capital gains tax when they sell their business at retirement. Alternatively if they work themselves to death dealing with regulatory red tape and hand the business on to their children, Brown and Darling will take, compared to the Tories, an extra £560,000* off the bereaved children. So much for rewarding enterprise.

If you own two homes you just got a handy reduction from 40% to 18% on capital gains. Is it a coincidence that almost all MPs own two homes? The constituency and Westminster home owners already benefit from a tax-free allowance worth £40,000 annually to pay their mortgages. Now they can sell the taxpayer funded second home and only pay the reduced capital gains – a 55% tax cut for MPs.

Mr and Mrs Balls are paid by the taxpayers quarter-of-a-million a year between them, so hard done by are they that they still claim tens of thousands extra in mortgage subsidy on top. Now with the new changes they will be able to sell that second home you paid for and they will pay only 18% tax on it. No wonder they are laughing…

UPDATE : A co-conspirator reminds Guido not to forget the Miliband boys successful efforts to award themselves an IHT tax cut. David Milband is today living in a £ 1.5 million ultra-fashionable-Primrose Hill townhouse at the centre of a complex inheritance-tax avoidance scheme. He shamelessly exploited a loophole which he used to reduce his death duty bills.

When his father Ralph died in 1994 aged 70, leaving a large estate, the Miliband boys agreed a ‘deed of variation’. The cunning move meant that 40% of the equity of the Primrose Hill home was transferred to Ed and David, who were each given a 20% share in the house neatly evading the tax bill.

*Could be an incorrect figure, see the debate in the comments. Guido is not an accountant.

An Apology to Readers

Below you can see that yesterday Guido suggested there had been some kind of policy U-turn on Death Taxes by the ventriloquist’s dummy that is the Chancellor of the Exchequer. Guido even illustrated it with a big blue U-turn just to drive the point home.

As the sharper readers have pointed out, it was no such thing. In fact it was just essentially a re-presentation of, what Alastair Darling let slip this morning on the Today programme, was an already scheduled raising of the IHT threshold from £300,000 to £350,000. It additionally removed the necessity for spouses to visit a financial advisor for one aspect of estate planning. There was no new tax cut. It was a U-turn in rhetoric only.

Darling and Brown will still be rubbing their hands every time a middle-class, family-home-owner dies, the uninvited smiling guests at the funeral wake to present the bereaved with a tax bill.

Guido apologises for any confusion caused.

So How Many Schools and Hospitals Will Darling Cut?

Alastair Darling seems to have decided to split the difference between the status quo and the Tory proposals on inheritance tax. A big reversal from last year when he told The Times

“Inheritance tax brings in about £3 billion a

[…]

+ READ MORE +

Snouts in Trough : "Do You Know Who I Am?"

So much for equality in the people’s palace. The political class really does have airs and graces:

Access to Services
Before the recess the Speaker approved the Administration Committee’s recommendation that Members should have priority access to services throughout the

[…]

+ READ MORE +

Sith Cancel Scheduled Downing Street Meeting

The Telegraph’s Chris Hope is reporting that the Smith Institute has cancelled the meeting it was having at No. 11 Downing Street and moved it to a different central London location – the British Academy.

He says the Smith Institute

[…]

+ READ MORE +

Yesterday the Labour Party Realisedthe New Boss is the Same as the Old Boss

What must have been depressing about yesterday, from the point of view of Labour MPs and activists, wasn’t that they lost the non-election, wasn’t that they had got their hopes up to crush Cameron only to see them dashed, it

[…]

+ READ MORE +



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David Cameron tells MPs after voting:

“Wouldn’t miss this for the world. Secret ballots very important. Remember the Chartists.”

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