Downing Street eyes inheritance tax and mortgage reform ahead of March budget

Ministers are considering scrapping inheritance tax and extending help for first time buyers as part of a range of measures to cut Labour’s lead in the polls.

The announcements are set to form proposals under discussion for next year’s budget, after Jeremy Hunt yesterday confirmed that it will take place on 6 March.

This week it was reported that Downing Street is looking at axing inheritance tax at the Spring Budget as Rishi Sunak looks to push forward tax cuts as a dividing line between the Government and the opposition before the next election.

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Backbench Conservative MPs have been pushing for the move ahead of the Autumn Statement earlier this year after ministers floated the idea before deciding against the move so soon into the UK’s recovery from months of economic instability.

Michael Gove, the Housing Secretary, has hinted at a new offer for aspiring homeowners ahead of March's budget.Michael Gove, the Housing Secretary, has hinted at a new offer for aspiring homeowners ahead of March's budget.
Michael Gove, the Housing Secretary, has hinted at a new offer for aspiring homeowners ahead of March's budget.

Ranil Jayawardena, a former cabinet minister under Liz Truss, told the Daily Telegraph: “Time is running out, and the Government needs to be bold. It’s time to axe the death tax.”

The chairman of the Conservative Growth Group also claimed that it was the “least popular of taxes with people of all incomes”.

However, previous polling from IPSOS in June suggested that it was actually the sixth, far behind the lower rate of income tax, VAT and council tax.

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Alongside the proposed tax cuts, the Conservatives are also preparing its offer to aspiring homeowners in a bid to win over younger voters who feel they have been priced out of the housing market in recent years.

In an interview with the Times, Michael Gove, the Housing Secretary, said that his party will “definitely” have an offer for these voters in place by polling day with a range of options under consideration.

These suggestions include longer fixed-term mortgages to reduce deposit costs, a resurrection of Help-to-Buy, reforming or scrapping stamp duty, and could form part of the upcoming budget.

“We have been asking the question, how can we ensure that people with decent incomes who are finding it difficult because of the scale of deposit required can get on to the housing ladder?” said Mr Gove.

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He added that work had started at “looking at some of the rigidities in the mortgage market which they haven’t got in other jurisdictions”.

Currently only 11 per cent of 24 to 49-year-olds are planning to vote Tory at the next election, with as little as 1 per cent of 18 to 24 year olds set to vote for Rishi Sunak’s party.

The Spring Budget in three just over two months may be the last major fiscal event the Prime Minister has to change the party’s reception amongst aspirational voters, traditionally a core part of the Conservative vote.

The Chancellor has commissioned the Office for Budget Responsibility (OBR) to prepare an economic and fiscal forecast to be presented to Parliament alongside the budget next year.

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Shadow financial secretary to the Treasury James Murray said: “The next Budget will come after 14 years of economic failure under the Conservatives that have left working people worse off.

“The tax burden is set to be the highest in 70 years, with 25 Tory tax rises since the last election alone, and economic growth is on the floor. Nothing Rishi Sunak and Jeremy Hunt do in March can repair the damage they have done to our economy.”

Liberal Democrat Treasury spokeswoman Sarah Olney said: “This looks like a last throw of the dice by a flailing Conservative government.

“It’s too late for Jeremy Hunt to turn the tide after his record of failure has left us with growth flat-lining and public services at breaking point. People will never forgive the Conservative Party for crashing the economy, wrecking the NHS and clobbering families with years of unfair tax hikes.

“The only way to repair the damage done by the Conservatives is to kick them out of office through a general election.”