EXCERPTS
George Osborne has come under pressure to scrap his planned £1bn cut to inheritance tax and pump the money instead into improved childcare.
Ahead of the budget in 10 days’ time, Labour is targeting what it says are the government’s “broken promises” on childcare, as well as Tory plans to help the wealthiest families rather those struggling to mix work and bringing up children.
At prime minister’s question time last week, Jeremy Corbyn accused David Cameron of breaking a promise to deliver tax-free childcare and of making limited progress on a manifesto pledge to extend the number of hours of free childcare.
The prime minister admitted there had been a delay in meeting the tax-free promise but blamed the problem on a court case the government lost with some providers.
One of Labour’s leading economists, Rachel Reeves, said on Saturday that the inheritance tax plan to help the well-off hand on wealth was evidence of the Tories’ “ill-judged priorities”.
Reeves, the former shadow chief secretary to the Treasury, said it should be scrapped with the money diverted to fund better childcare.
Under proposals announced in his budget last summer, Osborne said the inheritance tax-free threshold would be raised from £325,000 per person to £500,000 for homeowners who pass on their main home to their direct descendants.
The rule, due to be phased in from 2017, can apply to both homeowners in the case of married couples, which raises their joint threshold to £1m before they are liable for tax.
But Reeves, a member of the Treasury select committee, said: “This iniquitous scheme will cost almost £1bn a year by the end of this parliament and do nothing to address the inequalities of wealth and opportunity in Britain or help ordinary families get on and their children flourish.
“The chancellor should ditch his planned cut in inheritance tax which is just further evidence of his wrongly judged priorities that only help the very richest. At a time of intense pressure on public finances, that money would be far better used on expanding and improving the childcare on offer for working parents.
“This would help many more families and boost employment, cut benefit bills and improve the supply of skilled workers available to business. High-quality childcare would allow parents to return to work sooner and give children the solid foundation they need before starting school.
“Why should the nation’s children and their hardworking parents have to pay the price for George Osborne’s tax cut for the wealthiest families in Britain?”
Many of the working families who were promised 30 hours’ free childcare for three- and four-year-olds have yet to see the government honour that pledge.
Reeves added: “The government’s abysmal failure to provide adequate childcare is not just letting down millions of families, it’s also threatening our already fragile economy. Mr Osborne should drop his ill-considered, unjust proposals to cut inheritance tax and focus on the real problems facing the country.”
-reprinted from The Guardian