David Maddox: Do Tories fear Ukip more than Labour?

FOR political anoraks the election that never was in 2007 was a turning point in the political fortunes of the UK’s two biggest parties. This week’s suggestion by the Tories that they will slash inheritance tax has acted as a reminder of it.

Douglas Carswell won Ukip's first seat in the House of Commons last week. Picture: Getty

To recap, the Tories were in opposition and floundering under new leader David Cameron, while Gordon Brown had just taken over as Prime Minister from Tony Blair and was on the crest of a wave of popularity. Such was Labour’s confidence that election guru Douglas Alexander advised Mr Brown to call a snap election and kill off the Tories.

But at the Conservatives’ party conference, the then shadow chancellor, George Osborne, pulled a rabbit out of the hat and announced his party would cut inheritance tax.

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The immediate bounce in the polls for the Tories led Mr Brown to lose his nerve – a trait which defined his ill-fated premiership – and not only cancel the plans for the election but take the Tory policy and implement it in the next Budget by raising the point where it is paid to above £650,000.

Mr Brown went on to lose the next election and Mr Cameron ended up in Downing Street.

Now history seems to be repeating itself, at least as far as inheritance tax is concerned. It appears we can expect a cut in the final Budget before the election or the first one after.

Why are the Tories raising this now when they already have a promise of cutting income tax by £7.2 billion that is unfunded? The simple answer is Ukip. The Tories are looking for totemic issues to stop angry, late middle-aged, middle-class voters deserting and backing Nigel Farage’s party as they have in Clacton and appear to be ready to do in Rochester and Strood.

It is the same reason why they want to raise the threshold where people pay the 40p higher rate of income tax. One of the issues that anger middle-class voters – or the squeezed middle – is how more and more of them are dragged into paying taxes or rates that were designed for the wealthy. While £650,000 may seem high for many, for those in the south-east of England that does not cover the value of many houses they may inherit from relatives.

The search for totemic issues to deal with Ukip also explains why the Tories are now fans of English votes for English laws.

What this tells us is that the Tories are confident of beating Labour and now see their only threat as coming from Ukip. This means that their policies are going to continue to tack to the Right the closer we get to the General Election in May.