Page last updated at 19:08 GMT, Wednesday, 25 March 2009

Ken Clarke dismisses tax 'hoo-ha'

Ken Clarke
Ken Clarke said the tax pledge would appear in the party's manifesto

Shadow business secretary Ken Clarke has dismissed as a "media hoo-ha" the row over Tory inheritance tax policy.

He said he accepted he should not have described the party's plan to scrap the tax on estates under £1m as an "aspiration" rather than a "promise".

Party leaders restated their commitment to the plan, after his comments were interpreted as a sign of backtracking.

Chief Treasury Secretary Yvette Cooper said Mr Clarke was "causing political carnage in the Conservative Party".

On Wednesday, Mr Clarke told BBC Radio 5 Live that it had been a "completely artificial row" on a "thin Sunday" for news, following his comments to the BBC's Politics Show.

"I can't for the life of me see that I said anything significantly different from my colleagues.

"Real people will have difficulty understanding what on earth the difference is between my saying it is an 'aspiration' and someone else saying it's a 'promise'."

But he then added: "There's a mild difference in weight, I agree, for the chattering classes, the people who go in for the 24-hour seven-day-a-week frenzy over politics... and as a politician I should not have used the word 'aspiration'."

Key point

He said that he travelled from Cardiff to Dublin via Heathrow after the programme before being told of the "daft mayhem" his interview had prompted.

He put out a clarifying statement denying any differences or changes to party policy: "But once the media gets into one of their hoo-has - it was absolutely classic 24-hour media hysteria, and nobody can now think quite what the problem was.

"Within a parliament we will implement the promise. We are committed to it and that is what we will do."

The Tories' proposal in 2007 to cut inheritance tax was seen as a key point in reviving party fortunes. It was estimated at the time to cost £3.1bn. It was to be paid for out of the money raised by bringing in a £25,000-per-year charge for "non-domicile" taxpayers.

'Giveaway'

At the time, inheritance tax was being charged at 40% on assets worth more than £300,000 that someone left behind when they died, unless left to a spouse.

A week after the Conservatives unveiled the proposal, Chancellor Alistair Darling doubled the inheritance tax threshold for married couples to £600,000.

On Wednesday, Ms Cooper said: "Ken Clarke is causing political carnage in the Conservative Party once again by coming clean on the Tory tax giveaway for millionaires.

"It's as if he is trying to sabotage the policy," she said.

"The Tories need to come clean: if they can't fund their policy from non-doms, then what public services will they cut to give £200,000 each to 3,000 millionaires?"



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