This may surprise one or two readers of Money Marketing, but I have never voted in a general election.
We are not talking here about a Russell Brand-style rejection of all political parties, nor is this the result of apathy on my part. It is simply that my Italian passport precludes me from voting.
That said, like the overwhelming majority of people in this country who already belong to one of the main electoral tribes, I already know how I would vote were I given the opportunity to do so. It is the “undecideds” who really matter.
Which means the parties’ manifestos and electoral promises are not aimed at those who want to arrive at a considered decision about what is best for the country, having carefully costed the alternatives. It is more about marking out territory, telling your own tribe and those closest to it about your overall philosophy on day-to-day “big issues”.
It in this context we should examine the Conservatives’ pledge this week to raise the inheritance tax allowance up to £1m for married couples. This would be achieved introducing a £175,000 family home exemption into an individual’s current £325,000 nil-rate band.
David Cameron told the Sunday Times that IHT “is a tax that is meant to be paid for by the rich, not by hard-working families who have saved to buy a home and improve it. That wish to pass something on is about the most human and natural instinct there is.” Hence the Conservatives’ pledge to exempt some homes from inheritance tax.
It is all nonsense, of course. As the Financial Times pointed out, only 16,000 estates paid any IHT in the 2012/13 tax year, the last for which figures are available. Most estimates suggest barely 20,000 to 30,000 estates a year would be affected by these proposals in the foreseeable future.
Not only that, but the measure, costed at £1bn, would be paid for by reducing tax relief on pension contributions. The Conservatives propose to cap relief on incomes between £150,000 and £210,000 from £40,000 to £10,000.
In effect, better-off savers would end up funding the children of those with very large estates – a bizarre set of priorities.
So what lies behind the Conservatives’ wheeze this week? Last year, after the pre-Budget statement, I mentioned that unlike Gordon Brown, one of his predecessors in office, “George Osborne is a highly political Chancellor.
“The difference between both men, however, is the latter appreciates personal finance issues and how they can resonate with the public mood far better than his former Labour counterpart ever did.”
Understanding this simple fact helps explain not just why the Conservatives have made this pledge a key manifesto issue but also why David Cameron pitched it the way he did.
This is about setting out “values” that chime with a generation of people like my dad, who in the years before he died was obsessed about leaving us his house and a small pot of savings, to the point where he denied himself medical treatment – and even new clothes – which would have made his life more comfortable in old age.
The reality is, as the FT also pointed out, under these plans somebody inheriting a £1m house would pay no inheritance tax. Meanwhile, “someone earning £100,000 a year for 10 years — the same total amount — would pay over £290,000 in income tax alone at current rates and thresholds.”
Essentially, the Tories are proposing to give £1bn a year to a tiny number who have done nothing to earn the privilege, while continuing to levy income on tax a far higher number of people who work hard for a living – or those who want to save for their retirement.
The key question, of course, is that of whether this will work electorally for David Cameron and his party.
What the Tories are clearly hoping to achieve is a repeat of 2007, when George Osborne’s pledge to raise the inheritance tax limit to £1m panicked Labour into calling off plans for a general election it could potentially have won. By limping on until 2010, Gordon Brown cost his party the chance of another term in office.
Can Osborne pull off the same trick a second time? Over the last 12 months, the Chancellor has focussed on two key groups he hopes will help his party ride back into Number 10: pensioners and homeowners.
The pension changes of the past year were one part of the process, while reforms to the way stamp duty land tax is levied are another. IHT is the third component of a financial Holy Trinity considered so crucial to Tory election hopes.
Except that I am not sure the effect will be so successful this time round. True, Labour are notoriously cack-handed on personal finance issues, as I have long argued.
But we are in the middle of a general election, where winning votes by harking back to a value held by people like dad, of leaving something behind for the children, can be matched more easily by another set of principles, such as “fairness” or even, amazingly for Labour, of “fiscal responsibility”.
Like the brilliantined spiv in Dad’s Army, the Tories are trying to seduce voters by appealing to their naked self-interest. It won’t work – at least not this time.
Nic Cicutti can be contacted at firstname.lastname@example.org