No Unfunded Tax Cuts, Brown Pledges

by Jason Gorringe, Tax-News.com, London

30 August 2006

Writing in the Financial Times on Monday, UK Chancellor, Gordon Brown took what many consider to be a thinly veiled pot-shot at former cabinet colleague, Stephen Byers, who recently called for the abolition of inheritance tax.

Recent research conducted by the Halifax building society, based on data from HM Revenue and Customs, has shown that the total number of estates paying inheritance tax (IHT) rose by 72% over the five years to 2003/04 to more than 30,000.

Writing in the Sunday Telegraph earlier this month, Mr Byers urged the abolition of IHT, calling the levy a "penalty on hard work, thrift and enterprise".

He went on to add that IHT is "unfair and punitive" and a form of "double taxation" because it taxes assets acquired with income which has already been taxed.

Hitting back at this subtle attack on his authority as Chancellor, Mr Brown wrote in the FT:

"Our reforms have allowed us to cut corporation tax from 33p to 30p in the pound and long-term capital gains tax from 40p to 10p, changes that we could afford and sustain."

"No political party will be trusted if it promises stability in one breath and unfunded tax cuts in the next. To make unfunded promises, to play fast and loose with stability (indeed to play politics with stability) is a return to the bad old days – something I will never do and the British people will not accept."

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