The Conservative Party has a mountain to climb if it wants to win the next election, which is likely to take place in 2024.
Sunak is on course to booted out of Number 10 and replaced by Sir Keir Starmer’s Labour Party, as inflation wreaks havoc.
The cost-of-living crisis is getting worse rather than better, while rising interest rates will wreak more havoc.
Sunak has portrayed himself as a safe pair of hands who will gradually repair the nation’s finances given time, and he’s had some success in that.
He has been creeping up in the polls but with the economy still struggling there’s a long way to go.
What he needs is a big economic win, and there’s a policy that has been tried before with great success.
Declaring war on inheritance tax.
Survey after survey shows that IHT is the most hated tax of all. People loathe it for all sorts of reasons.
Families feel they are being taxed twice. Both when they live, and when they die.
Worse, IHT is levied at a punitive 40 percent on all assets that rise above a certain threshold.
The £325,000 nil-rate band was set in 2009 and will remain frozen all the way through to 2028, steadily catching more people due to fiscal drag.
This year we’ll pay a record £7billion and that will continue to rise.
Middle-class Britons are typically the ones who pay while the super-rich employ cunning accountants to dodge their share.
So why doesn’t Sunak just scrap it? We already know it will be a vote winner.
In October 2007, Gordon Brown had just replaced Tony Blair as Prime Minister, and was desperately plotting how to win the next election.
Then Conservative Party Shadow Chancellor George Osborne pledged to raise the IHT threshold to £1million, so “only millionaires would pay” if the Tories won power.
Osborne’s “autumn surprise”, as it was called at the time, was an instant hit. It was particularly popular in key marginal constituencies in southern England, where homeowners more likely to get caught by IHT.
Brown lost his nerve and postponed the election, allowing then Tory leader David Cameron to ridicule him as a “ditherer”.
The financial crisis followed and sunk Brown for good.
Sunak and Hunt have a proven electrical weapon at their disposal. It would terrify Starmer, too. So will they deploy it?
READ MORE: Poll shows overwhelming support for cuts to ‘abhorrent’ inheritance tax
There are reasons why they may hold back.
Scrapping IHT would be portrayed as a tax break for the wealthy, as was Hunt’s recent decision to scrap the pension lifetime allowance.
That will infuriate class warriors on the left, but they’re never going to vote Tory anyway, while a lot of swing voters might suddenly decide they will.
Inheritance tax is so loathed that people want to see it gone, even if they are unlikely to ever pay it themselves.
Another thing that may deter Sunak and Hunt is that from day one, they have set themselves the mighty task of repairing the nation’s finances.
It’s a message Hunt bangs out again and again.
The UK still faces a budget deficit of £131.7billion in the current financial year, equivalent to 5.1 percent of national income.
If Sunak scraps IHT then Hunt would have to find another £7billion from somewhere. Cutting spending or raising other taxes won’t be popular, either.
I don’t know what Sunak will do. It depends how desperate he gets.
I know what millions of voters would like him to do, though. And they’d be very grateful.
