Clarke drops inheritance tax clanger - but he's right

The flagship Tory tax policy is in trouble, all because that pesky Ken Clarke told the truth...

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Last Updated: 31 Aug 2010

Shadow business secretary Ken Clarke is in hot water with his bosses George Osborne and David Cameron for saying that - what with the recession and one thing and another - the Tories might not be able to cut inheritance tax if they win the next election after all. No, really?

Speaking on BBC One's the Politics Show yesterday lunchtime, Clarke said that the Tory's commitment to abolishing inheritance tax for estates of less than £1m - first made in 2007 - was now more of an ‘aspiration' than a definite promise because of the pressing need to tackled the burgeoning burden of national debt.

Sunday or no, it didn't take long for a rattled Tory HQ to issue a contradictory statement, saying that the plan remained ‘a promise we will keep', shortly followed by another statement from Clarke to the effect he had changed his mind and now agreed with his boss George Osborne that they would cut the tax in their first Parliament, should they win.

Clarke should perhaps have known to tread more carefully around the subject, as George and Dave are especially fond of their inheritance tax policy. Although definitely the product of pre-recessionary times, the pledge is widely credited with having frightened Gordon Brown into his worst-ever strategic blunder: that of not calling an election in the autumn of 2007.

But still, why all the fuss? Surely it's patently obvious that whichever party wins the next election is going to have precious little room for any fiscal manoeuvre that doesn't involve reducing debt. Public spending will have to be extensively reined in and tax cuts of whatever flavour are inevitably going to be well off the agenda. So to that extent Ken was only stating the bloomin' obvious.

But of course this is politics, where inappropriate use of the truth is the worst sin of all. His words were received with delight by the beleaguered government, which doesn't often get a chance to go on the economic offensive these days. Clarke's oppo, Lord Mandelson, not a man to let even the slightest sign of disagreement between the grizzled Clarke and his youthful masters go to waste, immediately accused the Tory's of presiding over a tax policy ‘in disarray' saying of his old rival ‘The thing about Ken is that he cannot help but say what he thinks.'

And thank goodness for that you might reply. But it is just possible that Dave and George were quietly planning to ditch the policy anyway, an approach which Clarke's candid outburst has clearly torpedoed. See how much trouble you can get into by simply telling the truth?

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