Inheritance Tax — [Sir Robert Syms in the Chair]

Made an intervention questioning the lead MP's assertions about inheritance tax.

I am concerned about the impact of scrapping inheritance tax, which would further entrench wealth inequality. Only a small percentage of people pay it but it brings in nearly £7 billion for HMRC. The debate favours the wealthy, and during a cost-of-living crisis, it is absurd to consider getting rid of this tax. In constituencies like Glasgow East, where intergenerational wealth disparities are more pronounced, scrapping inheritance tax would deepen inequality. Asked Minister to confirm whether Government comments before Budget regarding policy changes are speculative or not. If it is not true that the wealthiest do not pay inheritance tax, can the Minister tell us how much the King paid upon inheriting the Duchy of Lancaster?

Only 5% of people currently pay inheritance tax, while the threshold for passing on an estate including a home is £500,000. Grahame Morris highlights that wealthy individuals and aristocracy often avoid paying their fair share through tax avoidance schemes. He argues for addressing economic inequality by taxing those with significant assets and suggests moving towards equality and social justice instead of perpetuating wealth inequality. The Minister is putting forward an interesting proposition about progressive policies and taxation. Has he had a chance to consider whether council tax is a progressive form of taxation, when a millionaire, living in a £20 million property in Belgravia, very close to this place, pays less in council tax than my mother in a terraced colliery house worth about £50,000 in Murton?

He criticised the Conservative Government's plan to halve or abolish inheritance tax, arguing that it would benefit only the wealthy. He cited alarming statistics from his colleague, highlighting entrenched wealth in Britain. Lavery noted that 3.73% of estates paid inheritance tax in 2022-23 and fewer than 2% were in the north-east of England. He also pointed out exceptions allowing the wealthy to avoid inheritance tax through charitable donations or by leaving property to spouses, which he deemed unfair. Lavery emphasised that reducing inheritance tax would exacerbate social inequalities and benefit blue wall areas, while harming communities with lower social mobility.

Congratulated hon. Friend on securing debate, noted 25 tax rises under Conservatives, and criticized inheritance tax abolition as benefiting only top few percent at £7 billion cost, urged clarity from Government on funding.

Jim Shannon argued that inheritance tax punishes a lifetime of hard work, discourages saving and creates inequality. He shared his family's story to illustrate the negative impact of the tax on those who have worked hard to accumulate assets over generations. Stressed the importance of hard work and effort in building wealth, referencing his parents' journey from £5 to successful business ownership. Emphasised the biblical story of the 10 talents as a metaphor for multiplying resources through diligence.

Asked the hon. Member if his logic about money staying in a constituency where inheritance tax falls assumes all beneficiaries live and reside there, but that is not always the case as beneficiaries often live throughout the country. As a practising solicitor, I advised clients on estate planning and inheritance tax, which is often avoided through proper planning. I suggest equalising the inheritance tax threshold at £500,000 for everyone to enable even childless couples to leave an estate of up to £1 million free of tax. Intervenes to question Grahame Morris about business and agricultural property relief, highlighting its importance for family businesses and farms. Asked the hon. Gentleman about his party's plans to borrow an extra £28 billion annually and expressed pride in the Conservative party's support for working families during the cost of living crisis. Does this not clearly illustrate the distinction between those of us on this side of the House who would love to see inheritance tax reduced and ultimately abolished, and those Members on the other side who only want to tax working people more? Could the Minister specifically address the point I made about the inherent unfairness to those who do not or are unable to have children, in respect of the nil-rate band that applies to them?

Asked the hon. Gentleman to concede that given the £325,000 threshold for inheritance tax has been fixed since 2007, it should be increased to avoid fiscal drag. I thank my hon. Friend for lifting thresholds, taking people out of fiscal drag and giving more people the opportunity to benefit from a nil-rate band. This would grow the economy as it has in Sweden.

The hon. Member highlighted the economic struggles of many families and the significant increase in wealth for Britain's billionaires, noting that their wealth has tripled to £684 billion over a decade. She criticised proposed inheritance tax cuts as they would benefit the wealthiest 1%, handing them more than £1 million each by 2030. The hon. Member suggested alternative measures such as an annual wealth tax on assets over £10 million and equalising capital gains tax with income tax rates to raise funds for public services.