Inheritance tax policy row erupts

The Prime Minister's spokesman said that a Treasury note released under the Freedom of Information (FoI) Act showed that officials and ministers had been looking at the idea since the start of the year.

However, the Tories said it was clear that Chancellor Alistair Darling only began considering the idea seriously after a Conservative policy group put forward proposals over the summer.

The latest row followed Tuesday's Commons clash between Mr Brown and Tory leader David Cameron during the Queen's Speech debate.

The Prime Minister said that when the records were released under FoI, they would show the Government had been considering raising the inheritance tax threshold before the Tories announced their plans at their party conference last month.

The move was widely credited with turning round the Conservatives' standing in the opinion polls, forcing Mr Brown to abandon his plans for a snap general election.

In its response to an FoI request submitted by a Daily Telegraph journalist, the Treasury said that their records first showed that officials were considering the proposal on January 9. It was then submitted to ministers - in a document entitled Workstream H: Measure 1220 - Inheritance tax transferable nil-rate bands - on March 6, ahead of Mr Brown's final Budget as Chancellor, although he did not take it up at that point.

Following his appointment in June as Chancellor, Mr Darling was shown the paper on July 27 and he confirmed that on August 20 the measure was "under discussion" for inclusion in the Pre-Budget Report (PBR) in the autumn. Mr Darling was then given further advice on September 3, and two days later he asked officials to work up a detailed proposal which then appeared in the Pre-Budget Report on October 9.

Mr Brown's spokesman said: "This makes clear there were a series of interactions between Treasury officials and Treasury ministers over a period of time. I think it's pretty clear from this document that the Treasury had been planning to reform inheritance tax along the lines of the announcement in the Pre-Budget Report as long ago as January this year."

However, Mr Osborne said the first confirmation the proposal was being considered for the PBR - August 20 - came just three days after a Tory policy group headed by John Redwood recommended an inheritance tax cut and a day after Mr Osborne wrote a newspaper article headlined "We will scrap death tax on family homes". "What a coincidence," he said. "Gordon Brown should learn that when you're in a hole you should stop digging. This is a Gordon Brown own goal."