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Intriguing...

  • Nick
  • 8 Nov 07, 04:05 PM

This is the key extract of the Treasury's answer to the Daily Telegraph's FOI request. You can read the full detail on the :

"We have records of officials considering the proposal on 9th January 2007. Advice on this measure entitled "Workstream H: Measure 1220 - Inheritance tax transferable nil-rate bands" was sent to Treasury Ministers as pre-Budget advice on 6th March 2007...

Following his appointment, the (current) chancellor received the above paper on 27th July 2007. The chancellor confirmed that this measure was under discussion for the pre-Budget report on 20th August 2007. Advice on "Inheritance tax (IHT): transferable allowances" was received by the chancellor on 3rd September 2007. The chancellor responded to this advice on 5th September 2007 asking officials to work up final proposals. Subsequent detailed costings followed before the pre-Budget report set out all details on inheritance tax reforms on 9th October 2007."

This confirms that the government can prove that it worked up proposals on IHT long before the Tory conference but has produced no proof that the chancellor made the decision to go ahead with those proposals before George Osborne's .

Intriguingly, this answer shows that he only took an interest in IHT one day after the Mail on Sunday carried the headline "Tories to scrap death duties" ie on 20th August.

What's more, today's answer does NOT give us any detail of what happened in the crucial month before the PBR when all the key decisions would have been taken eg were the detailed costings ordered before or after the Tory conference?

Revealingly when I asked one of those keenest to spike the Tories' guns when Darling made his decision the answer was "we'll never know".

I stand by my original verdict.

Whose reform?

  • Nick
  • 8 Nov 07, 12:55 PM

We'll know soon. Or rather we won't quite.

The Treasury is about to release information about what advice was submitted to the chancellor and when about changes to the inheritance tax regime. This is in response to a Freedom of Information request made some weeks ago which the prime minister alluded to in his fiery exchanges with David Cameron at the dispatch box on Monday.

You may recall :

David Cameron: "I tell you what, look me in the eye and tell me that you were planning to reform inheritance tax before our party conference. Can the prime minister look across the Dispatch Box and just say it?"

The prime minister: "The answer is yes-unequivocally yes. Every year… All the records will show it, under whatever rule they are released under the Freedom of Information Act."

The information which will be released will show that:

Gordon Brown considered inheritance tax reform up to a few days before his last Budget in March. Specifically, he was given advice on the "transferability of nil rate IHT allowances" in March. This was the measure which his successor Alastair Darling announced in October.

Furthermore, the Treasury will reveal that Darling commissioned further advice on this in August, responded to that advice and continued receiving more papers up until mid September - before the Tory conference.

So, will this prove that the government were "planning to reform inheritance tax before our [the Conservative] party conference"? Yes and No.

Yes, it will be clear that ministers were considering and had asked civil servants to produce detailed proposals on inheritance tax reform well before and in the immediate run-up to the Tory conference. Furthermore, Whitehall sources tell me that the assumption in the Treasury was that this would be in the PBR and, indeed, detailed costings of the measure had been drawn up.

No, however, it does not prove that ministers had finally decided to include the proposals in the pre-Budget report before the Tories announced their plans. Final decisions on what goes in and what's left out of Budgets and PBRs are made in the last day or two before they're delivered (partly because the final economic forecasts are only produced at the last minute) After all, Gordon Brown considered the idea in March but did not announce it.

What it will be impossible to assert, I believe, is that ministers cobbled together an inheritance tax plan when they heard the shadow chancellor's speech at the Tory conference and then announced their hastily drawn up plans a week later.

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