Inheritance Tax

Reminds Members to return for the wind-ups and informs the House that the Speaker has not selected the amendment.

Supports the idea that the Government's approach to taxing inherited farmland is foolish, as it makes it more difficult for young people to enter farming.

Agrees that the Government is squeezing small businesses and making it difficult for them to create employment for the next generation.

Questions whether the hon. Gentleman thought inheritance tax was a spiteful tax when it was introduced in 1986 under Mrs Thatcher.

Asks whether the shadow Chancellor thinks inheritance tax has a greater impact than the cost of care on people forced to sell their homes, questioning the impact of the national care crisis on home sales.

Supports the argument that taxing family businesses holds the entire economy back from growth and recognises the importance of family businesses in building national champions.

Asks the hon. Member to name a single country in the G7 that is growing faster than Great Britain.

Called for a point of order regarding the declaration of interests by the hon. Member for Arundel and South Downs, Andrew Griffith, for not declaring JCB's financial contribution to him.

Responded to Gareth Snell's point of order, stating that such matters are not for the Chair to address.

Apologised to the Deputy Speaker for not declaring his financial interests in his own businesses when he asked a question.

Acknowledged Kit Malthouse's apology and noted that such matters are not for the Chair to address.

The Government are providing breathing space for families and businesses while making long-term changes to create good jobs and growth in every postcode. The Budget will be built on fiscal stability, with borrowing controlled to bring down inflation and reduce long-term pressures on public finances. The Government have put the NHS back on its feet, delivered the highest number of affordable homes in a decade, and lifted over half a million children out of poverty. They are investing in infrastructure and reforming the welfare system to tackle fraud and error. The Government's approach to inheritance tax balances raising revenue for the public finances with protecting family farms and businesses.

The shadow Chancellor's conference speech has raised concerns about the Conservative party's economic stability. The Liberal Democrats agree that the inheritance tax system is unfair, with ordinary families facing a 40% tax rate while the wealthy can avoid paying through tax planning. The tax code is too complex, allowing loopholes and exemptions that disadvantage those without access to expensive tax advice. The Liberal Democrats propose cutting income tax responsibly to help those affected by the cost of living crisis, aiming to take millions out of income tax and national insurance thresholds over five years. Rebuilding our relationship with Europe is seen as the key to economic growth, which would enable fairer tax cuts. The party opposes the rise in national insurance contributions and advocates for the reversal of the lower threshold to support young people's employment.

Andrew Lewin criticises the Conservative proposal for its impact on public spending, highlighting the cost to the Exchequer and the fact that only around one in 20 people pay inheritance tax. He also proposes the citizens advance policy to promote intergenerational fairness and maximise opportunities for all.

Patrick Spencer discusses the importance of family-owned businesses and the impact of the current inheritance tax on these businesses. He calls for the Government to cut taxes and support businesses, arguing that public spending in its current form is unsustainable.

It is a real pleasure to speak in this debate and to reflect on the question of inheritance tax brought to the House by the Conservative party. It affects about 4% of the population. On the Government Benches, we are rather more concerned with the 63% of the population who are facing tough times. Labour will therefore be voting against this Opposition day motion. I think we all remember where we were in the summer of 2022 when Liz Truss crashed the economy. The mortgages that ordinary families around the country were paying went through the roof. A shiver went down the spines of all the people who had pensions invested, as civil servants were sacked and the general reputation of the economy in the UK was trashed. Sadly, we have been paying the Truss penalty ever since. However, those of us on this side of the House fought to stop the chaos, restore hope and deliver change. In two years a lot of progress has been made, and even more has been made over the summer. I look forward to the Budget that will be presented in two weeks’ time, which will have more to offer those who are struggling with the cost of living crisis. Today, His Majesty’s official Opposition are asking the House to vote to bring back that version of chaos. Independent analysis suggests that the Conservatives’ inheritance tax proposals could cost up to £10 billion a year. Most families would rather see that money used to tackle the cost of living for everyone and to increase the wealth of the country as a whole, rather than being used to provide tax cuts for the 4% proportion of the population affected by this particular tax. The Conservatives say that theirs is the party of home ownership, but after their 14 years in government, home ownership fell out of reach for too many young people. The only growth was the growth in homelessness, which, sadly, increased by 74% during those 14 years. Working people look to the Government to tackle the cost of living crisis and give them some breathing space, but unfortunately the Conservatives’ priority is cutting tax on inherited wealth. As my hon. Friend the Member for Welwyn Hatfield (Andrew Lewin) pointed out so eloquently, we should be looking at all possible options to establish the meritocratic principle that no matter where you are born or what your background is, you should have an opportunity throughout your working life to make the very best of it and to be successful. In the meantime, we on this side of the House are getting on with building a fairer country with a new political and economic model, but we also need to help people right now. That is why Labour has taken immediate action to provide breathing space for people and businesses. A couple of Members have mentioned the IMF report. As so often with the work of economists, it is a bit of a curate’s egg. Some people may prefer the text that was on the opposite side, but the bit that I preferred came from the economist Ms Tenreyro: the world economic outlook report gave the UK’s GDP an upgrade. That, I think, gives us some hope. It sets a fairly positive background for the Budget that is just two weeks away. We on this side of the House have woken up to a little bit of positive news, which is also quite a good background for the decisions that will come in two weeks’ time. I know that many other Members wish to speak, so I will be brief. I am particularly pleased about the scrapping of VAT on electricity bills for the winter, and I know that there is more to come for households that use a lot of electricity, perhaps owing to disability or because a large number of people live in the same home. The capping of bus fares at £2 for the whole of 2027 will help people travel to work or to job interviews. The change in the rules on branded items of school uniform will ease costs for families. Business rates for pubs, social clubs and music venues have been reduced by 20%, and in London all children will have a hot dinner in the middle of the day at school. The public procurement rules have been changed to back British businesses and jobs. So many things have been introduced in the short two years for which Labour has been in office, and there is much more to come. These measures build on work that Labour has done to restore stability and growth to the economy. Difficult decisions have been taken, and I was pleased to note that the Prime Minister had announced a further difficult decision on the triple lock. This, I think, is a moment when we have to be a little bit gutsy in our politics. I was pleased that the Prime Minister announced that very difficult decision; it is coming down the track, but he did at least announce it, so that we can start talking about the difficult challenges that we face in respect of social care. There is a ring of chaos to the proposals flung out by the Conservatives. I know about this, because I was in opposition for 14 years. I know how tempting it is to have a giggle in Opposition day debates, but we have to face the truth. We have to make some difficult decisions in order to restore the reputation of our economy with the markets internationally, but also to build the important foundation with some innovation that has been raised by my hon. Friend the Member for Welwyn Hatfield and others who I am sure will speak in this debate. I will not, because I have only 40 seconds and I know that other Members want to speak. We will get on with delivering the difficult decisions and the change that our communities are longing to see.

You cannot tax your way to prosperity—that is something that I, as a Conservative, believe. Not only do I believe it, but it has been demonstrated time and again in countries across the globe. When this Government first entered office, under the previous Prime Minister, we were told that one of their central focuses would be to go for growth. We all know that Governments cannot conjure growth out of thin air. It is the Government’s job to create the right environment for businesses big and small to drive growth, but this Government spent their first period in office piling cost after cost on to British businesses, including through the national insurance increase and the Employment Rights Act 2025, delivering a regulatory burden that keeps growing. Take pubs, for example, which have been some of the businesses hardest hit by this Government. Since 2023, we have seen nearly 700 pubs close. In my own constituency of Bromley and Biggin Hill, we have been lucky to retain the number of pubs that we have—that is through no inconsiderable effort by myself. Labour Members are proving once again that they are desperate to talk about the past because they have no plan for the future. Talking about the pubs in my constituency, we have seen a significant decrease in the number of people employed by them. The British Beer & Pub Association estimates that in Bromley and Biggin Hill, we have gone from around 1,150 people employed in pubs in 2023 to around 800 now. That reduction seems to have hit young people the hardest, with the number of 16 to 24-year-olds employed in the industry down by 200—half the figure in 2023. Nationally, we have seen total gross value added from pubs and breweries fall from £47 billion in 2023 to £30.8 billion, and the Government’s tax take fall from £17 billion to £3.2 billion. Higher taxation and regulation are strangling an industry and leaving the Government with less money in the end. The hon. Gentleman is being too generous: he plays cricket; I sort of stand there and get hit by the ball. One has to look at taxation in the round, and if we look at the impact of things like the national insurance costs, we can see that it is getting more and more difficult for businesses to survive on the high street. If we want to see economic growth that will strengthen our local communities, strengthen high streets and deliver real opportunities for young people, we need a fundamental change in approach. That fundamentally different approach was outlined perfectly by the Leader of the Opposition and the rest of the shadow Cabinet in Birmingham last week. It is absolutely right that people should be able to leave assets such as family farms, businesses and homes to their direct descendants without being taxed. I warmly welcome our plans to abolish inheritance tax on family homes, rewarding a lifetime of hard work instead of punishing those who have scrimped and saved their whole life. Halving employer national insurance for those aged 21 to 24 is exactly the bold policy we need to get young people back into work. Bill Perera, a McDonald’s franchisee in my constituency, has highlighted the employer national insurance increase as the very reason he is struggling to employ more young people. Halving it will greatly assist the hospitality and leisure businesses that give many people their first job. We know the need to tackle the unsustainable welfare budget, and our savings plan will save £71 billion by doing exactly that. This will allow us to pay for our commitments, such as 3% on defence spending by 2030, while reducing the deficit by £35.5 billion against 2029-30 forecasts. The distinction between the Opposition and the Government could not be clearer. We are setting out a comprehensive plan to get our country back to work, grow the economy and make our communities stronger. The Government have no real plan, and they have floundered in their first few years in office and failed to deliver. The next Conservative Government will deliver. They will deliver a stronger economy and a stronger country.

The speaker argues against the Conservative proposal to abolish Inheritance Tax, emphasising that it benefits only a small percentage of wealthy estates and could cost £10.8 billion a year. He points out that in his constituency, fewer than 1% of estates are expected to fall within the Inheritance Tax threshold, questioning the practical benefit for the majority. He advocates for a fairer tax system that tackles tax avoidance and evasion, and supports practical measures to address the cost of living crisis, rather than focusing on a narrow partisan agenda. He criticises the proposal for its potential to reduce funding for public services and support for vulnerable people, and concludes by urging the Opposition to focus on issues that affect the broader population.

Blake Stephenson highlights the impact of inheritance tax on farming families and small businesses, arguing that the tax rules prevent proper planning and force families to sell land or business assets to cover the tax liability. He calls for a Conservative Government to abolish inheritance tax on the family home and restore full agricultural and business property relief.

Daisy Cooper intervenes to suggest that there are structural issues within the Conservative Party that prevent it from gaining support in areas like Carlisle Avenue.

Ashley Fox agrees with Blake Stephenson's criticism of the inheritance tax policy and raises the issue of how foreign companies or individuals are exempt from inheritance tax on agricultural assets, questioning the fairness of singling out British-owned family farms.

The motion is a substantial giveaway that disproportionately benefits the wealthiest households to the tune of £10.8 billion. It does not address the needs of families struggling with bills and pushes 500,000 children back into poverty. The proposal goes much further than targeted help for family farms and businesses. The policy could discourage downsizing of properties, and it is not a serious plan but a tax giveaway looking for someone else to pick up the bill. It is about tax cuts for the wealthiest and cuts to public services for everyone else.

Neil Hudson agreed with John Cooper's perspective, highlighting the importance of fairness in allowing farmers and families to pass on their farms, businesses, and homes without the burden of inheritance tax.

Noah Law argued that succession planning and life insurance are important tools for businesses to mitigate the impact of inheritance tax changes, questioning whether the Conservatives' proposals address the complexity of the issue.

Richard Baker criticised the Conservative party's proposal to abolish inheritance tax, arguing that it does not represent sound stewardship of the nation's finances and would benefit the wealthiest 5%. He emphasised the need for fiscal policies that meet the priorities of his constituents, including protecting public services and addressing the challenges facing UK households.

Law criticised the Conservative proposal to cut inheritance tax, arguing that it favours the wealthiest 4% of society. He pointed out that the proposal effectively abolishes inheritance tax and suggested a more pragmatic approach, such as uprating thresholds or closing tax loopholes. He also discussed the importance of tax collection efficiency and called for a focus on addressing tax avoidance by the wealthy.

Describes the impact of inheritance tax changes on family businesses, highlighting the differential threshold for married couples and the resulting stifled investment. Mentions the fertiliser tax and its impact on family farming businesses. Raises concerns about emotional and mental health consequences, including suicides, due to these policies.

Intervenes to highlight the confusion between business assets and personal wealth by the government, questioning the fairness of this approach.

Intervenes to reference a Labour Member's criticism of the Labour Government's policy on agricultural property relief and calls for the complete scrapping of these plans.

Intervenes to question the relevance of invoking suicides caused by government policies, particularly in light of past austerity measures implemented by the current opposition.

Agrees with the hon. Lady regarding the damaging business rates increases under the current government, but points out that the previous government also failed to deliver on its promise to fundamentally reform business rates, leading to frustration among businesses with both major parties.

Critiques the Government for misunderstanding what drives economic growth and wealth creation in the UK. Accuses the Government of unfairly targeting hard-working individuals and small family businesses with high inheritance taxes. Emphasises the emotional and economic impact on farmers who may have to sell their farms to meet tax obligations. Calls for the removal of inheritance taxes on family homes and businesses, arguing that the Government's policies are discouraging long-term investment and growth.

Intervenes to express concern that family firms will be sold to foreign buyers due to the high inheritance tax, which discourages long-term investment and growth in local communities.

Intervenes to discuss the emotional and economic impact on farmers and business owners who feel responsible for the well-being of their employees. Argues that the high inheritance tax is hindering the ability to invest and grow businesses, affecting the livelihood of employees.

Rebecca Smith emphasises that the debate unfairly generalises that her constituents are wealthy, highlighting the hard work and sacrifices families make to buy homes. She supports abolishing inheritance tax on the family home and raising the general inheritance tax allowance to £500,000 per person or £1 million for married couples. She provides statistics, such as the median salary in her constituency, to show that many residents are not wealthy. She also disputes the notion that those on benefits receive discounts and argues that hard-working families should not be penalised for saving and investing in property and business.

Neil Shastri-Hurst criticises the complexity and burden of the current tax system, noting that it has grown from fewer than 5,000 to over 20,000 pages of tax codes. He argues that the current inheritance tax is capturing ordinary families rather than the intended wealthy individuals. He points out that property prices have risen, pushing many middle-class families over the inheritance tax threshold. He provides statistics showing that the tax will capture 9.5% of deaths by 2030 compared to 4% between 2001 and 2024. He also notes that 18 out of 38 OECD nations do not impose inheritance tax, and none have it at such a punitive rate as the UK.

Supports the motion to raise the inheritance tax threshold to £1 million for a couple and abolish inheritance tax on the family home. Argues against Labour's proposal to freeze the threshold until 2031, stating it penalises ordinary families. Emphasises the importance of freeing up resources for the next generation of entrepreneurs and improving the economy by cutting government spending and welfare.

Critiques Labour's approach to taxation, arguing it punishes success and discourages hard work. Supports the Conservative plan to abolish inheritance tax on family homes, farms, and businesses, stating it rewards those who work hard and build businesses, and encourages long-term planning.

Stresses the importance of creating conditions for economic growth and supporting small businesses. Criticises the current government for increasing costs for businesses and penalising hard work. Supports the motion to abolish inheritance tax on family homes, farms, and businesses, arguing it rewards those who work hard and create wealth.

Victoria Atkins criticised Labour MPs for supporting taxes on family farms and businesses, highlighting the highest number of farms closing on record and the impact on rural economies. She emphasised the Conservatives' commitment to supporting rural communities and criticised Labour's approach to taxation as 'asset stripping' the country. She also pointed out the lack of support for family farms and businesses in Labour's policies and criticised the Prime Minister's recent tax on fertiliser as a further blow to British farming.

Andrew Lewin asked about measures to help those not on the housing ladder, suggesting that the Conservative party would scrap stamp duty on primary residences to help people back on the housing ladder.

Tim Roca described his own constituents who want to pass on their family homes or family businesses to their children as the 'idle rich' and suggested that farmers in his constituency on an income of around £20,000 a year would struggle to afford life insurance and planning advice.

Noah Law suggested that farmers should get life insurance and planning advice but acknowledged the difficulty of affording such advice for farmers on low incomes.

Thanked hon. Members for their contributions, criticised the Conservative party for demanding unfunded tax cuts, worth up to £11 billion a year, without a clear plan for funding. Emphasised that the Conservatives' plan would cut spending on public services such as the NHS, schools, and police. Criticised the Conservative party for prioritising tax cuts for the wealthiest estates and failing to deliver on their promises. Highlighted the government's fiscal discipline, focusing on fiscal rules and controlling borrowing to bring down inflation and reduce long-term pressures on public finances. The government will vote against the motion, focusing on good growth in every postcode and fiscal discipline.