SMARTER THAN MAGGIE AND GEORGE III:

Labour facing a house tax 'grenade' (Gaby Hinsliff, December 26, 2004, The Observer)

Middle-class protests over paying inheritance tax and ever rising levels of stamp duty are a potential political 'hand grenade', Labour's newest election strategist warns today, adding that the government would be 'foolish' to ignore them.

Shaun Woodward, the former Tory MP who defected to Labour, has been brought on to Tony Blair's election team because of his unique insight into Tory advertising guru Maurice Saatchi, with whom he worked closely on the Tories' 1992 campaign.

He has already submitted a detailed analysis to the Prime Minister on the likely plan of attack and is singling out tax as an area where Labour is potentially vulnerable.

Rising house prices in London and the South East mean thousands of families have now risen above the threshold of owning assets worth more than £263,000 - making them liable for the 40 per cent tax on what they leave their children, a levy once associated with the landed gentry.

'Inheritance tax has the ability to resonate with people, particularly in marginal constituencies, and particularly when we consider the numbers of people now [worth] in excess of the threshold,' Woodward told The Observer .

'I am not talking about well-off middle-class people, I'm talking about people in the Eighties who bought their [council] house which today is worth around the limit. We would be very foolish if we as the governing party dismissed it as something which should be addressed.

'I think what you are going to see from the Tories are issues like inheritance tax [and] stamp duty thrown in like hand grenades.'

It gets harder and harder to tell where George Bush ends and Tony Blair begins.

Posted by Orrin Judd at December 25, 2004 10:06 PM