Brown's property tax grab

CHANCELLOR Gordon Brown may well back away for the time being from the idea of raising the top rate of inheritance tax to 50% - given New Labour's reluctance to be caught alienating middle class voters.

But the middle class, and those who aspire to join it, are already being clobbered in a battery of sneaky ways.

The house price boom has created a multi-million pound tax bonanza for Brown, who has chosen not to raise the exempt thresholds to keep pace with the real world.

In the case of inheritance tax, the tax-free ceiling is just £263,000, making even a first-time buyer's flat in many parts of London potentially liable. As a consequence, the heirs to more than 30,000 estates this year alone are likely to suffer a bill, compared to just 18,000 in 1997 when Labour came to power.

Stamp duty is another property market tax that has become punitive, particularly to struggling first-time buyers.

Buyers are only spared on homes costing less than £60,000, a threshold that has not been increased for more than a decade.

Brown has also put up the duty, helping to swell the amount pouring into his coffers more than fivefold to £3.6bn.

At the same time, council taxes have soared, with accountant Numerica estimating that the real increases are equivalent to 2p on the basic rate of income tax.

A growing army of 3m people is now charged the top rate of income tax, originally intended for high-rollers, but now levied on anyone earning more than around £35,000 a year.

Some 700,000 of them have been pulled into the top 40% bracket under Labour. And let us not forget the 10% rise in employees' National Insurance to 11%, another blow to millions of moderately-off earners.

Brown has not spared savings from the tax onslaught, taking his axe to the popular Peps and Tessas. True, he replaced them with Individual Savings Accounts (Isas), but then proceeded to chip away at the tax benefits they offer.

His attack on retirement funds, scrapping the tax credit on dividends, is reckoned to have cost £5bn a year, worsening the pensions crisis.

To be fair, Brown's Conservative predecessors were up to many of the same tricks.

But the Chancellor needs all the money he can get to fund his ambitious plans to reform public services while meeting his fiscal rules. It is the middle class that are paying the price for his hunger for cash.

Rose's thorny issues

THE headlines trumpeting that Asda has overtaken Marks & Spencer as Britain's largest clothing retailer are perhaps not quite so alarming as they might seem for Stuart Rose. Marks' new chief executive has made it clear that revitalising the clothing range is a key part of his strategy to turn around the ailing High Street chain after dispatching predator Philip Green.

While it has certainly fallen behind Asda in volume terms, Marks remains firmly on top by value. To put it in perspective, its share of the clothing market by value dropped to 10.3% in the quarter to July, from 10.7% a year ago. Asda's slice rose from 3% to just 3.3%.

It is true that supermarket checkout chic is flourishing. Asda's George range is a £1bnayear moneyspinner. Tesco's Florence & Fred has attracted attention for its value versions of designs by Chloe, Missoni and the like.

But Rose is not trying to woo the fickle fashion pack, or to sell piles of cheap clothes on waferthin profit margins. Instead, as he well knows, he must recapture his core customer in the over-35 group who is looking for something flattering, not frumpy.

The revamped Limited Collection-range, due in 66 stores on September 1, has been wellreviewed in the fashion pages and apparently will deliver stylish clothes for real working women. That will be an interesting test.

Being outstripped by Asda may be more symbolic than anything else, but it is still a blow to Rose's pride. Shareholders will hope it will spur him on to redouble his efforts.

Lazard hurdles

SUGGESTIONS that investment bank Lazard is heading for a float have surfaced again, apparently with Goldman Sachs on board as an adviser.

A float would be entirely in character for 'Bid 'em up' Bruce Wasserstein, the legendary dealmaker who runs Lazard.

But first he would have to get the agreement of the board and the formidable chairman Michel David-Weill.

The City has been rife with speculation about past disagreements between Wasserstein and David-Weill, so perhaps we should not hold our breath.