Clause 4
Finance Bill
6:15 pm
Stephen Timms (Chief Secretary, HM Treasury; East Ham, Labour)
The hon. Member for Chipping Barnet gave us a very different perspective on the Forsyth report from the shadow Chancellor when it was published. If I recall, he warmly welcomed it. She described it simply as a set of potentially interesting ideas that the Opposition will consider, along with all the others proposed to them. That was a striking and noteworthy contrast.
The hon. Lady asked me, as did other Opposition Members, why we were announcing the nil rate threshold for 2010-11 so early. She then talked about what house prices would be like in 2020, and I thought that she was going to ask me to announce the threshold for then, too. In fact, setting out the threshold a few years ahead, as we have done consistently over the past few years, is helpful in giving families confidenceabout how things will be over the period ahead. The threshold for the current rate was announced in the 2005 Budget, while the threshold for the following two years was announced in last year’s Budget. We are simply maintaining that practice.
There has been some discussion about the incidence of estates paying inheritance tax. In 1986-87, the proportion of those paying inheritance tax was not what Opposition Members said it was—it was 5 per cent., or 30,000 estates, so only fractionally below what it is now. The rate was 6 per cent. in 2004-05, 6 per cent. in 2005-06 and 6 per cent. last year, and I expect it to be 6 per cent. consistently over the next few years.