Tory storm over inheritance tax – POLITICO

What’s driving the day in London.

By ELENI COUREA

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Good Thursday morning. This is Eleni Courea.

DRIVING THE DAY

THE FESTIVE LULL CONTINUES: Time to bolt the doors and crack open another box of Celebrations — Storm Gerrit is bringing more rain and gale-force winds to the U.K. after wreaking havoc in Scotland and the north of England on Wednesday.

Braving the storm: Rishi Sunak is traveling back to London from his Yorkshire constituency to work from Downing Street today. (The trains are a mess but Playbook hasn’t spotted any travel warnings for helicopters.)

Notably: The Times reported last weekend that the PM’s aides were hoping he’d take more than three days off over Christmas.

OVER IN NO. 11: Chancellor Jeremy Hunt is drawing up plans for a March 6 budget. His first political challenge is to grapple with a Tory split over inheritance tax, after the Telegraph reported ministers were thinking of scrapping it entirely. Tory MPs Jonathan Gullis and Neil O’Brien said on X that the government should be targeting income taxes instead. Jason Groves now reports in the Mail splash that a proposal to cut the headline rate of inheritance tax from 40p to 20p is a “frontrunner” for inclusion in the budget. It has support from Priti Patel and Jacob Rees-Mogg. The topic also splashes the Mirror.

Weighing in: One Nation Chair Damian Green tells Ben-Riley Smith that Hunt’s No. 1 priority should be to help first-time home-buyers. Speaking to the Times’ Oli Wright this week, Leveling Up Secretary Michael Gove insisted the Tories would come up with a proper offer on this before the election.

Inevitably: Confirmation of the budget date (tipped by Playbook two weeks ago) has unleashed another wave of speculation about a spring election.

Eyes emoji: The Mail’s Jason Groves has an intriguing story saying that the PM has been warned by some on his side that waiting until the fall could cost the Tories a million votes. “The one convincing argument for holding the election in May is that a million households will not yet have been hit by higher mortgage costs,” a senior Tory tells Groves. “If you delay until November then you have got another million households paying hundreds of pounds a month more and some of them are going to blame the government for that.”

Playbook’s take: Evidently top Tories are divided on this. Tim Shipman reported in the Sunday Times a month ago that Isaac Levido — who is due to join CCHQ to run the Tory campaign full time next week — and No. 10 Chief of Staff Liam Booth-Smith are opposed to holding the election in spring.

IN LABOUR LAND: Shadow Attorney General Emily Thornberry is touring morning broadcast studios. Last night Shadow Home Secretary Yvette Cooper criticized Sunak after his spokesperson said he considers the matter of James Cleverly’s rohypnol joke “closed.”

Exactly a year ago: Westminster went mad over THAT video of the PM asking a homeless person at a shelter if he worked in a business. 

POLICY CORNER

NURSERY NEWS: Labour is drawing up proposals to create thousands of new nursery places in primary schools, Oli Wright reports in the Times splash. Expect the finalized policy to appear in the party’s election manifesto. Labour has long planned to make childcare provision a central part of its offer to voters.

INTERVENTION OF THE MONTH … goes to Amyas Morse, the chair of the new local government watchdog, also on the front page of the Times. Morse tells Oli Wright that it’s “quite definitely” the case that councils going bankrupt are suffering from bad management and not a lack of funds.

WAR CHEST: The FT international edition splashes a really interesting defense story. Sylvia Pfeifer and Eri Sugiura write that the order books of 15 of the world’s biggest defense companies, including BAE Systems, are near record highs with the war in Ukraine and other geopolitical tensions driving up sales.

Elsewhere: There were 12 payouts for bullying, harassment and discrimination by the Ministry of Defense this year compared with five in 2020-21. Labour got the stats via written parliamentary questions — the Times has the story.

DEPORTATION CHALLENGE: The Guardian’s Dan Boffey highlights the case of 28-year-old Briton Dmitry Lima who is in prison for drugs offenses and has been told that once he has served his sentence he’ll be deported to Portugal, where his parents came from. Lima has never been to Portugal or even left the U.K.

BLOW TO THE BARGE: Housing…