Toynbee claims that, at a time when City dealers' bonuses are soaring and mid-ranking bankers are due a £1.5m top-up on their salaries, it is vital to keep one of the few instruments that spreads wealth more fairly. Yet she must know that it is precisely this category of super rich who, along with the well-established landed gentry, arrange their financial affairs so that, quite legally, they avoid paying the tax. Toynbee should listen to the informed view of Chris Wales, a former adviser to Gordon Brown on tax policy, who says that inheritance tax has a negligible effect on the redistribution of wealth.

I have to acknowledge that Toynbee does get one thing right. At present only 6% of estates are liable to pay the tax - although it is a shame that she failed to mention that this has trebled since 1997 when only 2% were liable.

With home prices continuing to soar, the number of people becoming liable for the first time will continue to increase dramatically, and at such a rate that it will no longer be possible to dismiss the issue as marginal.

The original architects of inheritance tax never intended it to apply to the people who are now falling within its net. We are seeing people who were never higher-rate tax payers ending up paying tax at 40% on their death.

Toynbee dismisses my call for an increase in green taxes. Of course there are no easy green taxes sitting about that haven't been considered, but I'm not sure there's such a thing as an easy tax in the first place. The case being put in opposition to my proposal, though, ignores the fact that the amount of revenue raised from environmental taxes is actually in decline. In 1999 green taxes represented 3.6% of GDP: today they have fallen to 2.9%.

Toynbee, along with many others, clings to the retention of inheritance tax like some sort of comfort blanket. It allows them to rest easy in the belief that something is being done about addressing the inequalities in our society. The reality is that this particular tax does nothing of the sort. The sooner we realise that, the better, because it will then allow us to have the difficult, and no doubt provocative, debate about how we can use tax not only to raise money to invest in public services but also to achieve our wider social, environmental and political objectives. This would need to include changes to our tax and welfare system that really would tackle inequality.

Last year, social democratic Sweden abolished inheritance tax. They did so out of recognition of its fundamental unfairness. The loss of income is financed by other means including through green taxes. They were right, and we should follow their lead.

· Stephen Byers is Labour MP for North Tyneside and a former cabinet minister

byerss@parliament.uk

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