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Jeremy Hunt was asked on Sunday to justify cutting inheritance tax for the rich at the same time as many people are struggling to pay bills.
On Wednesday the chancellor will unveil his Autumn Statement, setting out his tax and spending plans ahead of next year’s general election.
It has been reported he could cut the headline rate of inheritance tax – the tax on the estate (property, money and possessions) of someone who’s died – from 40% to 20%.
According to the Institute for Fiscal Studies (IFS), less than 4% of estates paid inheritance tax in 2020–21 as it only applies to wealth over a certain amount.
In an interview with the BBC’s Sunday with Laura Kuenssberg programme, Hunt was shown a question from a viewer who asked: “Why change inheritance tax when you have the lower paid struggling to pay their bills?”
Kuenssberg asked the chancellor: “What would it say about modern Conservative Party if you cut inheritance tax, at the same time as so many people are struggling?
“Why would you do that when people are having such a hard time?”
Hunt refused to rule in or rule out the cut, saying he was “not going to be drawn on any individual taxes”.
“I think you can read the papers this morning and you can see that I am going to abolish every single tax, there is – in fact, if you read the papers, there wouldn’t be any taxes left after Wednesday,” he said.
“I’m very sorry to say, I can confirm that won’t be the case. I would dearly love to bring down all different types of taxes.”
Rachel Reeves, the shadow chancellor, told the same programme cutting inheritance tax “in the middle of a massive cost of living crisis, and when public services are on their knees” was “not the right priority”.
“I understand people’s desire to pass on to their children what they’ve worked hard for but right now that is not the right thing to do and we would not support it,” she said.
However Reeves did not commit to reversing any inheritance tax cut implemented by the current government should Labour win the next election.
If inheritance tax was abolished completely, the IFS calculated it would cost the government £7 billion.
Around half of the benefit would go to those with estates of £2.1 million or more at death, who make up the top 1% of estates and would benefit from an average tax cut of around £1.1 million.
The IFS said the 90% or so of estates not paying inheritance tax would not be directly affected.
