Downing Street is reportedly holding talks about scrapping inheritance tax as a manifesto offering in a bid to win the next election.
No 10 was said to be discussing whether to make abolishing the levy a commitment to shore up votes in so-called “blue wall” seats in 2025.
Supporters argue that the policy could be a “gamechanger” in the south of England where the Conservatives are defending constituencies vulnerable to gains from opposition parties, according to the paper.
Rishi Sunak made halving inflation by the end of the year one of the five key ambitions for his leadership, and Jeremy Hunt has signalled this target will be prioritised over tax cuts.
The wider economic challenge facing the chancellor and prime minister was illustrated by official figures showing the UK economy contracted in May.
While the party continues to trail Labour in the polls, The Times reported that abolishing inheritance tax was being considered as a manifesto pledge, rather than a policy to be implemented next year.
“It’s about being an aspirational country. You work hard, play hard and pass on your wealth. It’s a live discussion,” one source familiar with the discussions told the paper.
The rate of inheritance tax is currently 40 per cent for estates worth more than £325,000, which is only charged on the portion that is above the threshold.
But estates of spouses and civil partners can pass on up to £1 million without any inheritance tax liability.
Consumer Prices Index inflation peaked at 11.1 per cent growth last year and was last reported at 8.7 per cent for May.
Abolishing inheritance tax could cost the Treasury a potential £7bn a year and would be contingent on that figure falling significantly, the Times reported.
A No 10 source said: “The PM has repeatedly said that he wants to cut taxes for people.
“As Conservatives that is obvious, we want people to keep more of their own money. But the current economic situation means that Government is completely focused on halving inflation – to help people have more in their pockets at the end of each month.
“This kind of future-scoping speculation just isn’t on his mind at the moment and requires a different kind of economic environment to the one we are operating in.”
Meanwhile, Tory grandees are calling for the safest seats to be given to Thatcherite candidates at the next general election to avoid risking an “existential crisis” for the party.
Veteran backbenchers and former Cabinet ministers have drawn up a “hit list” in an effort to maintain conservative values, the Telegraph reports.
Newly-created seats that are being targeted include Leicestershire Mid, Shropshire South and Doring and Horley, with one Tory source saying: “Selecting the right people, in both senses of the word, is essential if we are to keep the Conservative Party conservative.”
“The fact is that a lot of the people who have come through the process over the last decade under Cameron and May are not robust, tax-cutting, free marketeer Right-wingers. It was all about ticking boxes and meeting quotas rather than establishing whether candidates were actually Tories.
“It’s not just about the future ideology of the party, but its future leadership.”
