One of the most senior ministers of the New Labour years has urged his party to adopt a tax on inherited capital assets, such as expensive houses to fund social care.
Speaking at an event hosted by the Policy Exchange think tank, David Blunkett said houses in London had soared in value and should be taxed to fund social programmes outside of the capital.
Referring to the children of those who have experienced rocketing house prices, Blunkett asked the audience:
Why should their sons and daughters or nephews and nieces win the lottery when they die?
When asked whether he meant what the Tories dubbed the "death tax" before the 2010 General Election, the Telegraph reports the former Home Secretary replied "yes". He added:
I think it's got a lot of merit – properly organised, properly regulated so it's not fraudulent – where people could release some of the equity to pay for their care and still allow their offspring or their nieces and nephews to inherit a pretty good bung.
He warned that the divide between London and the rest of the country was widening, and it would lead to serious "social consequences" in the long-term. In August last year, shadow chancellor Ed Balls slapped down any suggestion that his party would introduce a death tax to pay for social care.
Labour came under consistent fire from the Tories both before the 2010 General Election over the so-called "death tax". Before the last election, the Guardian revealed that Andy Burnham had been looking into introducing an inheritance tax that could reach as much as £20,000.
The Conservatives went on the attack and issued a series of hard-hitting posters claiming "Now Gordon wants £20,000 when you die". In July, shadow health secretary Burnham was taped at the Fabian Society's summer conference suggesting a national care service could be funded by a 15 per cent levy on estates.
He told the conference "I put that forward before the last election to support a national care service…but there is a debate to be had on whether that is acceptable to the public". Last night, Blunkett described Burnham's comments as "brave".