Leading article: A family quarrel over the legacy

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The Independent Online

The former transport secretary, Stephen Byers, has turned up the heat under the simmering debate about inheritance tax, describing it as "a penalty on hard work, thrift and enterprise". He rehearsed all the familiar arguments: the far greater number of people being caught in the net now and in the future; the fact that liability largely reflects the rise in house prices and the reality that the middle classes are affected disproportionately. The truly wealthy can avoid it.

These are all valid reasons to explain why inheritance tax is unpopular and will become more so with the passing of this generation of homeowners.

Unpopular, however, is not the same as unfair. We see no compelling reason why the windfall many people have received through lucky property-buying should pass completely untaxed to the children and grandchildren. There may be a case for adjustments: for raising the threshold more regularly or making the rate progressive. Another approach would be to tax the beneficiary, rather than the estate. But so long as we have a government which has greater social equity among its tenets, the odds are that inheritance tax will - and should - survive.

In the end, though, the row that Mr Byers has opened up is not only about inheritance tax. It is about another inheritance as well: the one that will be bequeathed by Mr Blair when he eventually leaves office. Any debate about inheritance tax is also a debate about the sort of party the post-Blair Labour Party would be.

Tellingly, Mr Byers' main argument for abolition was to show middle-class Labour voters that the Government had not forgotten them. Upper middle-class homeowners, especially in London and the South-east, are the key group of centre-ground voters likely to decide the next election. They were the ones drawn to New Labour in 1997; they are now the prime target for David Cameron and his modernising Conservatism. They are also the voters most concerned about inheritance tax.

As an ally of Tony Blair, Mr Byers is clearly worried that whoever succeeds Mr Blair may not necessarily have the interests of these particular voters in mind. And everything we know about Tony Blair and Gordon Brown suggests that they might hold rather different views on the virtues of inheritance tax - personally if not politically.

The immediate and fierce response of the Brown camp to Mr Byers' call yesterday was eloquent testimony to the passions that already seethe around the Blair succession and the future of New Labour. We can expect more to come, for this is every bit as much about inheritance as tax.

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