Byers does have a point on IHT

With the Conservatives pretty much having free reign to make political capital out of the housing market over the last couple of months, it was perhaps unsurprising that someone from the Labour Party finally struck back.

While Stephen Byers’ true target may have been Dear Prudence, he struck out at Inheritance Tax, damning it as a tax well past its sell-by date.

IHT has long been seen as a noose around the neck of ordinary home owners. Rocketing house prices have resulted in many home owners with modest salaries and assets being pushed into the same category as the super-rich. A property purchased 20 or 30 years ago for 20,000 could now be valued at or around the 285,000 IHT threshold. These individuals are not super-rich, but the government treats them as such.

Byers’ suggestion has been angrily denounced by the Labour Party. Trade and industry secretary Alistair Darling damned Byers’ anti-IHT stance as failing to be either prudent or a sensible tax-and-spend policy. The Conservatives also tried to dismiss Byers as an embittered Blairite merely taking a shot at chancellor Gordon Brown. But it conceded that it would look at ways to ease the IHT burden.

But the politicians are missing the point. They should take heed of the headlines Byers’ anti-IHT stance has generated as change to property taxation laws is badly needed. The Conservatives recently spoke of revamping Right to Buy schemes, but more creative thinking is needed. Mortgage Strategy is deluged every week in our ongoing campaign Step Up Stamp Duty. Like IHT, it all too often nets the people most unable to afford it.

Byers’ IHT outburst may have been dismissed by both parties, but there’s a seed of an idea that can’t be ignored. Who cares if Byers was just trying to scupper Brown’s ascension to the premiership? The question is which political party will be the white knight to home owners and impale this punitive tax on death?