Rachel Reeves, the shadow chancellor, said: “Cutting inheritance tax in the midst of a major cost of living crisis… is not the right priority.” Photo: PA/Jeff Overs/BBC
Rachel Reeves refused to say whether the Labor government would reverse any inheritance tax cuts introduced in this week's Autumn Statement.
Chancellor Jeremy Hunt is said to be considering cutting inheritance tax as part of an election strategy to reduce the tax burden and boost economic growth.
However, Ms Reeves, the shadow chancellor, said Sunday that cutting the tax now was “the wrong thing to do,” but added that she had no plans to make any manifesto commitments ahead of the election.
“I will set out all our plans, which will be fully valued and funded, in our manifesto,” she told the BBC's Laura Kuenssberg on Sunday.
“I don’t want to write a manifesto here in your program. I don't think I could put it any clearer.”
She added: “Reducing inheritance tax in the midst of a massive cost of living crisis and with public services on their knees is not the right priority.”
“I understand people’s desire to pass on what they have to their children. We have worked hard, but this is not right now and we will not support it.”
Rishi Sunak is reportedly reconsidering his tax cut announcement amid fears of a backlash from Red Wall Tory MPs if he uses his £20bn fiscal windfall to cut taxes for the rich rather than ordinary families .
The Institute for Fiscal Studies estimates that four-fifths of any inheritance tax cut would benefit those with more than £1 million left at death. Each person owning more than £1 million will receive an average tax cut of £180,000.
This has sparked speculation that Mr Sunak and Mr Hunt could delay any inheritance tax cuts until next year's Budget. Instead, they are reportedly considering cutting income tax by raising the threshold at which families pay higher rates and reforming national insurance.
Ms Reeves also declined to say whether she would scrap the government's plans on tax cuts. wider benefits for those who refuse to cooperate with their employment center or accept the work offered to them.
Plans could see those sanctioned being denied not only welfare payments, but also related benefits such as free prescriptions or help with their energy bills.
Ms Reeves said: “They have been in power for 13 years. If people can game the system and not look for work while demanding taxpayers' money, it's their fault, then what have they been doing for 13 years?
“To me, it's about addressing the root cause of the problem. There are 7.8 million people on hospital waiting lists, and 2.6 million people are sick and out of work. These two things are linked: we must ensure that our NHS functions properly, because that is how our economy works properly.”
Asked whether people were gaming the system, she added: “That’s my own business.” the belief that people are desperate to improve their lives and their families' lives, that there are too many people coming into my offices who are struggling to feed themselves, struggling to pay rent, and I want to help them find work, and that starts with fixing our NHS.”
Ms Reeves also said that if elected, Labor would raise benefits in line with September inflation figures.
“The election is likely to be a year from now and the government has already implemented that, but in government I will use the traditional rate of inflation, September inflation, to inflate benefits,” she said. said.
“If you choose, year after year, which inflation rate is the cheapest, then you will see a gradual decline in people's income.”