Labour face a “problem” with a key policy as they prepare for an election in the coming years, according to a political commentator.
The party are yet to settle on a definitive inheritance tax position, according to broadcaster Liz Kershaw, which means they could be on the back-foot going into any election campaign.
Inheritance tax is a tax on the estate of someone who has died, with the standard rate sitting at 40 per cent.
According to broadcaster Liz Kershaw, Labour face a “problem” on the matter as they do not appear to have settled on a clear policy.
Liz Kershaw says Keir Starmer is facing a conundrum
PA / GB News
She told GB News: “They’ve got a problem. They’re playing to the red wall, people who live in Rochdale, Wigan and right up to the North East.
“Homes that if people were to die, like my mum’s was worth £290,000, we were troubled by that.
“If you have the same house in the south east, it would be worth about £800,000.
“If you’ve got a terraced house in London, you can’t leave it to your kids because as a married couple you’re only allowed up to £1million for your prime residence
“You could have been paying a fantastic mortgage and working your whole life to pay it off.
“Labour can’t seem to say what their policy is on this at the moment. Everybody’s scared of it.
“It’s part of the whole tax system which is so bitty and it’s a bit of a minefield.”
It comes after a report suggesting Labour is considering an increase in inheritance tax in a raid on the middle classes.
A.measure that allows parents and grandparents to leave their homes and other assets worth up to £1 million tax-free to younger generations could be cut by Keir Starmer’s party.
The party is yet to announce the measures it will keep ahead of the next election.
The party’s ‘grey book’, published alongside its last manifesto in 2019 said it would reverse George Osborne’s inheritance tax cut.
Osborne announced in 2015, when he was chancellor, that he intended to cut inheritance tax in a bid to protect millions of family homes from the “death duty”.
Sir Keir Starmer called Britain 'the sick man of Europe'Parliament.TVA Labour spokesman told The Telegraph that the 2019 manifesto is “ancient history” but would not rule out whether the inheritance tax policy will come up again.
But a Labour frontbench source said: “We have boxed ourselves into ‘we are more fiscally responsible than the Tories’ corner – we will have to tax more or where is the money coming from if not borrowing?
“We are most likely to take on the second homes tax and reversing the George Osborne inheritance tax cut policies. We like anything that benefits people over a million quid.
“The liberal middle class Remain people will agree and be happy to pay a bit more tax. And we are also trying to win back the working class by pitting the rich against them”.
Kershaw says the party is struggling to come to an agreement over capital gains tax.
It comes as Shadow Chancellor Rachel Reeves said the party has no plans to increase the tax.
Reeves told the BBC she has no plans to increase the tax, despite Angela Rayner appearing to criticise the current level of taxation in a statement responding to the release of details about Rishi Sunak’s financial affairs.
She said it revealed "a tax system designed by successive Tory governments in which the prime minister pays a far lower tax rate than working people who face the highest tax burden in 70 years".
Kershaw said: “Angela Rayner is saying everyone should pay 40 per cent capital gains tax.
“However, she has been shouted down by Rachel Reeves who says she has ‘no plans’ to do this.
“The whole tax system is so complicated, so it’s a brave party that pledges to revise and streamline the tax system in this country.”
