Rishi Sunak and The Conservatives are considering to abolish inheritance tax which brings in £6.1bn a year

The Conservatives are considering scrapping inheritance tax which brings in £6.1bn a year.  

The wider economic challenge facing the Chancellor and Prime Minister was illustrated by official figures showing the UK economy contracted in May.

While the party continues to trail Labour in the polls, The Times reported that abolishing inheritance tax was being considered as a manifesto pledge, rather than a policy to be implemented next year.

“It’s about being an aspirational country. You work hard, play hard and pass on your wealth. It’s a live discussion,” one source familiar with the discussions told the paper.

Supporters argue that the policy could be a “gamechanger” in the south of England where the Conservatives are defending constituencies vulnerable to gains from opposition parties, according to the paper.

Rishi Sunak made halving inflation by the end of the year one of the five key ambitions for his leadership, and Jeremy Hunt has signalled this target will be prioritised over tax cuts.

The wider economic challenge facing the Chancellor and Prime Minister was illustrated by official figures showing the UK economy contracted in May.

Abolishing inheritance tax could cost the Treasury a potential £7 billion a year and would be contingent on that figure falling significantly, the Times reported.

A No 10 source said: “The PM has repeatedly said that he wants to cut taxes for people.

“As Conservatives that is obvious, we want people to keep more of their own money. But the current economic situation means that Government is completely focused on halving inflation – to help people have more in their pockets at the end of each month.

“This kind of future-scoping speculation just isn’t on his mind at the moment and requires a different kind of economic environment to the one we are operating in.”

LBC’s Matt Frei described the move as a “desperate sop to aging Tory voters who are scratching their heads for a reason vote Tory when the Government has already raised so many taxes, and when stubbornly high inflation is already munching away at their wealth”.