Inheritance Tax

Wednesday 14th October 2026 Commons Chamber

[Madam Deputy Speaker (Caroline Nokes)]

I remind all Members planning to speak in this debate that it is a courtesy of the House that they return for the wind-ups. I inform the House that the Speaker has not selected the amendment.

15:56

[Andrew Griffith (Arundel and South Downs) (Con)]

I beg to move,

That this House calls on the Government to cut public spending in order to abolish Inheritance Tax on family homes, farms and businesses.

There is a divide the size of Manchester’s Etihad arena in British politics today: between those who want to tax family farms, and those who do not; between those who want to tax family businesses, and those who do not; and now, between those who want to tax family homes, and those who do not.

Not content with the highest tax burden in peacetime history, in their first Budget the Government chose to impose inheritance tax on farmers and family businesses. The Conservatives would scrap the family farm tax and the family business tax, and we would abolish inheritance tax on the family home. That is because we believe that people who work hard and save hard should keep the rewards, rather than seeing them sold and snaffled up to pay a taxman who refuses to make hard choices and to cut welfare.

We will hear later from the shadow Secretary of State for the Department for Environment, Food and Rural Affairs, my right hon. Friend the Member for Louth and Horncastle (Victoria Atkins); she has been a stalwart defender of Britain’s farmers, who this Government have attacked. I will speak briefly to the family businesses that this Government are also attacking. Many of them are small businesses: people who get up every day and take on the responsibility of hiring—often hiring young people—of making payroll and of creating growth in this country.

[Sir Jeremy Wright (Kenilworth and Southam) (Con)]

I appreciate that my right hon. Friend the Member for Louth and Horncastle (Victoria Atkins) will respond to the point on farms, but before the shadow Chancellor moves on, does he agree that one of the many examples of foolishness in the Government’s approach to a tax on the inheritance of farmland is that there is a challenge with the age of farmers? We need more young people in farming, and if the Government make it more difficult and expensive for those young people most likely to go into farming—namely, the children of farming families—they will exacerbate that primary problem.

[Andrew Griffith]

My right hon. and learned Friend is exactly right. The original reason for the exemption in death duties that previous Labour Governments respected was that generational aspect—the fact that a business or farm does not necessarily produce the cash flow necessary to hand over an enormous part of that value when, tragically, death takes place. I know that my right hon. Friend the Member for Louth and Horncastle will pick up on that point later.

I will move on to businesses, which, as Members across the House will know, are far more numerous than the farms who we know are impacted. Inheritance tax affects businesses in every one of our constituencies, on every one of our high streets and in every one of our trading estates. Often they are businesses that have been in the same family for multiple generations. This is causing extreme jeopardy, to the point that people are having to take action right now to protect those family interests.

Edmund Burke, a man much beloved on the Opposition Benches, said that society is a partnership

“between those who are living, those who are dead, and those who are yet to be born.”

There could be no better manifestation of that than Britain’s family businesses, which are rooted in their local community and provide jobs down the generations. Yet this Government are hellbent on breaking them up and forcing them to sell the pieces to pay an inheritance tax bill that they should never have to face. We Conservatives are on the side of family businesses.

[Wendy Morton (Aldridge-Brownhills) (Con)]

A wealth of small businesses across my constituency keeps our local economy growing. Does my hon. Friend agree that at a time when our businesses need support that will enable them to create employment for the next generation, this Government—on whose Benches there is, of course, no business experience—are just squeezing and squeezing our businesses out of business?

[Andrew Griffith]

My right hon. Friend is quite right. I urge every Member of this House to spend time with family businesses in their constituency; there are excellent organisations such as Family Business UK that would be delighted to make the introduction.

My right hon. Friend is also absolutely right about the relative dearth on the Government Benches of business and private sector experience and of an understanding of how the economy works. However, that is capable of remediation, if only Government Ministers and Members were to seek to educate themselves on the benefits to their constituencies and constituents of family businesses.

We Conservatives will not let a spiteful, prejudiced Labour party destroy those family businesses, which is why we will—

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

Will the hon. Gentleman give way?

[Andrew Griffith]

I would be delighted to give way and for the hon. Member to talk about the family business contribution in his own constituency, and why he will therefore be supporting the Opposition motion this afternoon.

[Gareth Snell]

There are many wonderful family businesses in Stoke-on-Trent, not least Potclays, which makes clay for the pottery industry. The hon. Gentleman talks about this spiteful tax; he will know that it was introduced in 1986 under Mrs Thatcher. Did he think it was a spiteful tax when she introduced it?

[Andrew Griffith]

There have been exemptions for family business far beyond that. This goes across multiple generations—the origins date back to the 1960s, and every Labour Government under every Labour Prime Minister have understood the contribution of family businesses, including to those in the hon. Gentleman’s constituency.

We could, of course, talk about many of the other headwinds that business face, but I would then be deviating from the subject of debate, Madam Deputy Speaker. I know that many colleagues want to speak this afternoon, so I will not talk about the higher energy costs, or the costs of hiring, or the red tape that this Government have imposed or the national insurance jobs tax, among many other things. We will not talk about any of those things, Madam Deputy Speaker!

Inheritance tax more generally was once a tax paid by the privileged few—the super-rich, a tiny sliver of a minority of taxpayers and estates. Today, however—these are independent numbers that the Government will understand—inheritance tax is a tax on ordinary middle-class families in every corner of our country. I invite the Minister to challenge these numbers when he eventually responds. By 2030, one in six families will face an inheritance tax bill. At the start of previous decades, that was one family in 20. The scope of this tax has dragged so many more people into its terrible net, and it is only getting worse. One in five homes last year was sold at a price above the threshold where an inheritance tax liability would arise.

[Chris Vince (Harlow) (Lab/Co-op)]

I wonder whether the shadow Chancellor thinks that inheritance tax has a greater impact than the cost of care on people who are forced to sell their homes. Does he not recognise that the Prime Minister is right to tackle the national care crisis, because that is causing people to need to sell their homes far more than inheritance tax is?

[Andrew Griffith]

I thank the hon. Gentleman for his point. Very few of us will not be aware of the challenges of the care sector from meeting constituents at our surgeries. It is why I regret the fact that one of the first actions of this Government on coming into office was to reject the consensus around the Dilnot review, which would have moved that conversation forward. We on this side of the House will continue to engage with ideas that the Prime Minister puts forward, but none of that takes away from the iniquity of inheritance tax, which is a double tax, often as a result of earned income, and sometimes even a triple tax as a result of businesses.

As I said, the scope and breadth of inheritance tax is dragging more people into its net all the time. There is a fundamental difference between the Government and Opposition on this issue, and I am very keen to hear what our colleagues in the Liberal Democrat party have to say on the matter.

The Conservatives believe that our homes are special. They are not just another asset to be taxed by a Government who refuse to cut out-of-control welfare. They are where we feel safe with our families, where our young take their first steps, and where we spend religious festivals and precious family moments. That is why so many of the policies we have announced recently focus precisely on those family homes.

We would make it cheaper to buy a first home for young people by removing gold-plated regulation, saving £50,000 from the price of an average new-build home, because we are the party that believes in home ownership. We would make it cheaper to buy by abolishing stamp duty on people’s primary residences and would make homes cheaper to live in by scrapping Labour’s tax on family homes—the so-called mansion tax that, in truth, applies in many parts of the country to flats and ordinary suburban homes. It applies in Birmingham, in Bristol, in Nottingham, in Edinburgh and, yes, in Manchester too. We are the party that prioritises home ownership, and now we are committed to making it free for people to pass on their family home to direct descendants.

The Government should follow our plan: no tax to buy a home, no tax to live in a home, and no tax to pass on a home to family. If the Chancellor is looking for ideas for his Budget in two weeks’ time, he can have that one for free. If the Minister takes that back, maybe he will become the Chancellor. But we all know what Labour will choose: more welfare. Labour is not the party of home ownership. That is a Conservative value, not Labour’s. We are the party of home ownership; they are the party of welfare, and we know how many people are on out-of-work benefits in Britain today.

Even the leader of the Liberal Democrats—this week at least—can see that taxing family homes is wrong. Just two years ago he told the BBC, when they still wanted to hear from him, that

“lots of people’s homes in many areas of the country are quite valuable, and they end up being clobbered by inheritance tax…I think that’s unfair”.

We shall see whether his colleagues—current colleagues—agree with him and which Lobby they end up in today. We will see whether they are useful helpers of the Government or willing to stand up for their constituents who are being over-taxed by this Government. We would take the majority of families out of inheritance tax, abolish the truly awful family farm tax and abolish the anti-growth family business tax—and, when we can afford it within our fiscal rules, we would abolish inheritance tax entirely, because we do believe that it is an immoral tax.

[Kit Malthouse (North West Hampshire) (Con)]

My hon. Friend is making a powerful argument. He will presumably recognise that the clue is often in the name where our businesses are concerned, as many of those largest businesses that we regard as national champions—Pilkington, John Lewis, Sainsbury’s and banks such as Lloyds—owe their origin to family businesses. The fact that they carry a surname indicates the many generations it took to build them to that power, but by taxing those businesses, we hold the entire economy back from such growth.

[Andrew Griffith]

My right hon. Friend is right. I do not think that any fair-minded person in the United Kingdom today would say, “The problem is that we have too many successful companies. Too many companies are setting up, being founded and listing on our stock exchanges; our economy is growing somehow too fast; we have not got enough young people to fill the jobs available; and the economy does not have enough debt.” Therefore, were there a measure that would allow productive capital to flow down the generations to allow enterprises across communities in all our countries to help our economy grow, we might think the Government would clutch on to it like a sinking man clings to a life raft. Perhaps we will get that damascene conversion from the Minister today—perhaps we will hear it in two weeks’ time—but I rather fear not.

That is why so many other countries in our situation—those many economies that are growing faster than ours—do not impose multi-generational taxes on businesses. It would be interesting to hear from the Minister why it is that he and his Government single out family businesses—not those owned by private equity, those owned by international domiciled corporations, or even listed companies—for this iniquitous measure. I would love to hear that, as we all would on the Conservative Benches.

[Noah Law (St Austell and Newquay) (Lab)]

Will the hon. Member give way?

[Andrew Griffith]

I will happily give away—I am enjoying the contributions.

[Noah Law]

The hon. Member mentions countries growing faster than Great Britain. Can he name a single country in the G7 that is growing faster?

[Andrew Griffith]

As I have said many times in the House, I think the G7 is the wrong comparator peer group. We are not the fastest growing member of the G7. If the hon. Member took the time to read more than the headlines handed out by the Labour Whips, he would know that yesterday the International Monetary Fund downgraded the growth forecast for our wonderful country and enterprise for 2027. That is what Labour is doing to our economy: it has reduced the rate of growth.

While the G7 largely consists of relatively sclerotic economies that suffer from the same levels of indebtedness and lack of growth as the United Kingdom, in the meantime the G20 is coming up on the outside track. Those are the more prosperous countries, and they are building airports, building infrastructure and forming capital. Their companies are taking on the world and their young people have more job opportunities.

Not that the Labour Government have any interest in calibrating, counting and identifying those who are leaving, but that is why the flow of wealth creators and ambitious young people is not to our wonderful country, with its history and heritage, but from our country to those economies that are successfully growing faster than ours. One of the reasons for that—to conclude—is that those countries are more understanding of family businesses, more understanding of family farms, and more sympathetic and on the side of those who work hard to create wealth and a better life for themselves, for their family and for the next generation.

[Gareth Snell]

On a point of order, Madam Deputy Speaker. I seek your counsel. The hon. Member for Arundel and South Downs (Andrew Griffith) has just given a rather long speech about the benefits of family-owned businesses, but he failed to declare that one of the biggest beneficiaries of his policy would be JCB, which just happens to have given him £30,000 over the last year. Should that matter have been declared before the speech was made?

[Madam Deputy Speaker (Caroline Nokes)]

Can I—[Interruption.] If the hon. Member is going to make a point of order, he might at least listen to the response. As he ought to know, as an experienced parliamentarian, that is not a matter for the Chair. He has, however, made his point.

[Kit Malthouse]

On a point of order, Madam Deputy Speaker. I need to offer you an apology. When I asked my question, I should have declared, or drawn attention to, my entry in the Register of Members’ Financial Interests. I am the proud founder of two businesses, which I hope in time to pass on to my children, if the Labour party does not get in the way.

[Madam Deputy Speaker]

As the right hon. Member will know, that is not a matter for the Chair, but I thank him for putting it on the record.

14:27

[The Financial Secretary to the Treasury and Paymaster General (James Murray)]

I thank the shadow Chancellor for delivering a speech for which it was, this time, much clearer when it had ended.

The Opposition motion invites us to speculate on the contents of the Budget. As right hon. and hon. Members will be used to me and my colleagues saying, the Government do not comment on speculation and the Chancellor will deliver his Budget in this House on 28 October. However, I am free to share with the House some of the context in which the Chancellor will take his decisions.

The Budget comes amid unprecedented economic shocks, with conflicts in both the middle east and Europe hitting people here and around the world. However, we are not powerless. That is why we are giving families and businesses breathing space where we can and starting to make the big, long-term changes needed to create good jobs and growth in every postcode. Everything we do at this Budget will be built on fiscal stability. Our fiscal responsibility has been underlined by the IMF this week, and as it made clear, our country is forecast to have the lowest borrowing—that is to say, the smallest deficit—in the G7 from 2029. Our country is demonstrating strong resilience in the face of global challenges, with the joint second-fastest growing economy in the G7 this year.

To deliver good growth in every postcode and to provide breathing space for families and businesses, we must continue to take responsible choices. That is why, as the Prime Minister and the Chancellor have made clear, fiscal discipline will underwrite every promise this Government make to the British people. We will meet our fiscal rules at the Budget later this month with a buffer against uncertainty. We will control borrowing so that we can bring inflation down and reduce long-term pressures on our public finances. That is the right thing to do, because there is nothing progressive about a Government spending £1 in every £10 on debt interest, rather than on the priorities of working people.

This Government inherited public finances that were in a mess and public services that were in crisis. Since the general election, we have put the NHS back on its feet, with the waiting list down by more than 250,000 since the Government came to power. Last year we delivered the highest number of affordable homes in a decade. We are lifting over half a million children out of poverty by scrapping the two-child limit and expanding free school meals. We are investing in Britain’s future, with an additional £120 billion of capital investment across this Parliament, and in Britain’s roads, rail, energy and other infrastructure that is so important to driving growth. Through reforms to how our country works, from planning to pensions and skills, we have helped to create the conditions for private investment to rise by almost 5% since the general election.

We have always been prepared to take the responsible choices to fix the foundations of our economy, repair our broken public services and deliver the investment needed to support growth. That includes driving down waste and driving up efficiency in the public sector, with a 16% reduction in departmental admin budgets by the end of the spending review period. We are reprioritising spending so that taxpayers’ money is spent on their priorities, cancelling digital ID in order to remove VAT from household electricity bills, reprioritising Ministry of Housing, Communities and Local Government spending to help tackle homelessness and bringing the national bus cap down to £2 for 2027, funded by savings from the Department for Energy Security and Net Zero. We are reforming the welfare system through the Milburn and Timms reviews, while tackling welfare fraud and error to save over £14 billion by the end of 2030-31, and we have taken decisions on tax to ensure that we meet our fiscal rules of living within our means.

Our decisions on tax reflect our commitment to sound public finances. We want to make sure that those with broader shoulders make a fair contribution. Although very few people, if any, want to pay more tax, we recognise that only a small proportion of the largest estates pay inheritance tax, and it makes an important contribution to the public finances.

Inheritance tax is forecast to raise almost £15 billion in 2030-31 to help deliver public services, and it is currently payable on around one in 20 estates. Our reforms to agricultural property relief and business property relief, introduced in April of this year, are expected to raise around £300 million per year, while offering substantial protection for family farms and businesses. Through a 100%—

[Alicia Kearns (Rutland and Stamford) (Con)]

I thank the right hon. Gentleman for giving way on this point. He focuses on how much he believes this tax will raise, but what does the impact assessment say about how many businesses will close as a result of this tax?

[James Murray]

The impact assessment, or tax information note, is published alongside the publication of the policy at the Budget.

I want to just make the point that to protect family farms and family businesses, the threshold for the 100% relief goes up to £2.5 million per person, and above that there is a 50% rate, which means an effective inheritance tax rate of up to 20% above that. Furthermore, the repayments can be spread over up to 10 years interest free, so there are substantial protections in place for family farms and family businesses. That 100% relief on the first £2.5 million of qualifying agricultural and business assets means that a couple can pass on up to £5 million of qualifying agricultural and business assets free of inheritance tax between them, in addition to the existing allowances such as the nil rate band. These protections will support family farms as we work with farmers to build a sector that is productive, profitable and resilient for the future.

[Kit Malthouse]

There seems to be a disconnect in the Labour party’s understanding of the situation. Does the Minister not appreciate that the capital value of an enterprise, whether it be a farm or a business, does not necessarily equate to the revenue that it generates? Many family farms and businesses are what they would call lifestyle businesses, where people are happy to sit on what may appear to be a large capital value that yields only a very small revenue amount that will not support the taxes he is trying to levy, and at the same time only just supports a lifestyle that people are willing to tolerate. It is this imbalance that is causing so much anguish.

[James Murray]

I thank the right hon. Gentleman for his question, but the fact that we have a threshold of £2.5 million of qualifying assets over which the 100% relief applies, and that the 50% relief applies in an uncapped manner above that level, means that we are protecting our small family businesses and family farms while making sure that there is a contribution towards the public finances.

[Kit Malthouse]

Let us say that a farm is worth £3 million, ostensibly on land value. That farm might be yielding a net income to a farmer of only £30,000 to £50,000 a year, on which they are surviving. They are willing to live that way because they love living on the farm, it has been in their family for many generations and they feel a sense of stewardship and custodianship, but that revenue is not enough for them to live on and then sustain the tax that the Minister wants to levy.

[James Murray]

Without commenting on individual tax affairs, even if hypothetical, if a farm were worth £3 million, the £2.5 million allowance for the 100% relief would cover a substantial portion of that. That is in addition to the existing nil rate bands and can be transferred between spouses. If that hypothetical farm were passed on via a couple to their descendants, £5 million would be covered.

I want to emphasise that our work as a Government with farmers—who feed the nation, sustain rural communities and help to manage the land that shapes our countryside—ranges from immediate support, including the £65 million emergency package that we announced to help them cope with this summer’s drought, to opening new markets for British produce through trade deals and export opportunities.

[Wendy Morton]

The Minister appears to give the impression that he knows about the farming industry, but how often, if ever, does he actually go out on to a family farm and meet the farmers?

[James Murray]

As the right hon. Lady will know, I have been in a position in the Treasury previously in this Government, and I have had a large number of conversations with people affected by, and worried about, this tax policy. The tax policy introduced in April this year has a £2.5 million threshold for the 100% relief, and we are confident that that balances raising revenue for the public finances with giving the right protection to family farms, which we think is so important.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

I am grateful to the Minister; he is being very generous. If he was a farmer with a relatively small farm—probably pretty marginal at, say, 300 acres and worth about £3 million—would he consider improving his farm and investing in capital to upgrade it, with the expensive kit now necessary to produce any sort of return on the land these days, or would he think, particularly if he was getting on in years, that that money would simply be top-sliced by the Treasury?

[James Murray]

Much like his right hon. Friend the Member for North West Hampshire (Kit Malthouse), the right hon. Gentleman refers to a £3 million farm. Again, that makes me confident that the threshold of £2.5 million for the 100% relief would cover a large proportion of those assets. As I said, that £2.5 million of qualifying assets means that a couple can pass on up to £5 million of qualifying assets, and that is in addition to the other existing nil rate bands. It is a similar point that his right hon. Friend made. The fact is that a £3 million farm would be covered by much of the relief and the nil rate bands.

Our responsible approach to the public finances stands in stark contrast to the approach taken by the Conservatives. In government, they crashed the economy while the shadow Chancellor was in the Treasury, and they left us with billions of pounds of unfunded spending commitments. In opposition, they are showing that they have learned nothing from their general election defeat. They claim their changes to inheritance tax would cost £6 billion and that they know how they would pay for them, but when they say they would make savings to welfare and asylum, no one can believe a word they say when everyone knows the cost of both soared when they were in power. What is more, independent analysis by tax expert Dan Neidle suggests that the true cost of their changes would reach £10.8 billion a year once behavioural effects are taken into account. That is almost double the number the shadow Chancellor has been bandying around.

Let’s face it: with the Conservatives’ policies costing double what they say and their so-called savings failing to materialise, they would either push up borrowing or do what Tories do best: make cuts to schools, prison places and our NHS. Let’s be clear: this policy would fail to help ordinary families across the country. That independent analysis has shown that 90% of the benefit would go to the wealthiest 20% of pensioner households; 40% would go to the wealthiest 5%; and 70% of the benefits would go to households in London and the south-east.

The Conservatives’ policy stands in contrast to the fair decisions that this Government will always take. My right hon. Friend the Chancellor will of course set out any future tax measures in the Budget in two weeks’ time. But let me remind the House of the decisions this Government have already taken to provide breathing space to families and businesses. For families rightly concerned about the cost of energy, we have removed VAT from electricity bills, taking around £45 off the price cap, and that is on top of the £150 removed from bills at the last Budget. For those paying business rates, the Government have introduced a support package worth £4.3 billion, with a further announcement in July taking an extra 20% off bills for pubs, social clubs and live music venues.

These are some of our choices to help families and businesses across the country. Rather than helping ordinary families struggling with the cost of living, the Tories instead are prioritising some of those with the greatest wealth. In a world of difficult choices, they are choosing to direct billions of pounds towards some of those with the largest assets, while everyone else is asked to pick up the bill.

[Chris Vince]

I thank the Minister for giving way; he is always generous with his time. Does the motion not just show that the Conservatives have the wrong priorities? Removing inheritance tax for families when the threshold is £1 million will make no difference to families in my constituency of Harlow. Less than one in 20 families pay inheritance tax. Is it not the right thing to do to tackle the cost of living crisis in the way that he is talking about?

[James Murray]

My hon. Friend makes an important point about politics being about choices and priorities. Indeed, in a world of difficult choices, the Conservatives choose to direct billions of pounds towards some of those with the largest estates, while everyone else is being asked to pick up the bill.

[Robbie Moore (Keighley and Ilkley) (Con)]

I worry that this Labour Government are living in some sort of parallel universe. I met one of my manufacturing businesses in Keighley recently, which employs nearly 250 people. It has already worked out that its business property relief liability over and above the £2.5 million threshold is about £1 million. The advice it received is either to sell plant or machinery to mitigate that liability imposed on it by this Government, or to sell shares in its business. Either way, people are losing control of their business, or losing productivity from having to sell plant or machinery, and that is the result of a choice that has been made by this Labour Government. How can the Minister sit there and describe those as fair choices to the bosses of that business, when up to 250 people are now likely to be exposed to the risk of losing their jobs in my constituency?

[James Murray]

Without commenting on the circumstances of an individual taxpayer, the fact that we have a threshold of £2.5 million before any inheritance tax is due on relevant agricultural or business property assets provides substantial protection for people from those charges. As I said earlier, there is a 50% relief which is uncapped above that level, and payment is allowed over 10 years interest-free. The balance we are striking in the policy that was introduced in April provides protection for family farms and small businesses while ensuring a contribution to the public finances, underscoring our fiscal responsibility, which is so important for better public services and a stable economy.

[Joe Robertson (Isle of Wight East) (Con)]

The Minister is doing so much to protect and help farmers, so is he mystified that they are not queuing up to thank him?

[James Murray]

I was going to say that I thank the hon. Gentleman for his question, but I am not sure it was meant in that tone. Being in government is about taking the right decisions for the future of the country, and I know that when taking decisions in the Treasury, the most important thing to start with is to ensure that fiscal stability and responsibility are the bedrock of all our decisions. If we look at the decisions that we as a Government have taken, and at the commitment of the Chancellor and Prime Minister, no one can be in any doubt that we will never return to the recklessness of the hon. Gentleman’s party in government.

Labour Members know that to provide breathing space for families and businesses, and to fix our economy and country for the long term, fiscal discipline must underwrite every promise we make. That is why we will continue to meet our fiscal rules, with a buffer against uncertainty. We will support good growth in every postcode by getting power out of Westminster, and we will drive investment to boost innovation and create jobs. That is how we will bring back hope across Britain, not through the fantasy economics and unfunded spending commitments of the Conservative party but with a plan to unlock potential in every part of our country, so that wherever someone lives, they and their local community can thrive. I oppose the Opposition motion.

[Madam Deputy Speaker (Caroline Nokes)]

I call the Liberal Democrat spokesperson.

16:32

[Daisy Cooper (St Albans) (LD)]

It is good to see the shadow Chancellor open this debate, because after his conference speech I too was not sure whether he would be trusted to close it. The shadow Chancellor was not the only Conservative Front Bencher to deliver an interesting conference speech, as the Leader of the Opposition simultaneously told us that every spending commitment would be matched by a source of funding, but then proceeded to announce a string of unfunded pledges—[Interruption.] Oh we got the numbers. It is clear that “Keminomics”—[Interruption.] I think the official Opposition are slightly rattled, Madam Deputy Speaker. It is now clear that “Keminomics” is simply Trussonomics 2.0, and if Conservative Members get anywhere near the levers of power again, or if they choose to hand the keys to No. 10 to Reform UK, they will once again propel this country towards another crash in the public finances.

Let me turn to the substance of the motion. We Liberal Democrats agree that the inheritance tax system is not fair. Ordinary families can face an inheritance tax rate of 40%, while those inheriting estates worth tens of billions of pounds are often able to avoid paying their fair share through complex tax planning and accounting arrangements.

[Noah Law]

There are issues with the current administration of the tax, but those are more to do with the fact that many of the wealthiest are avoiding it. Does the hon. Lady agree that businesses are genuinely in a better place to receive tax planning advice, so while there are a lot of retorts about the difficulties of selling plant and machinery, for example, businesses are better placed than households to take on that tax planning?

[Daisy Cooper]

Households and businesses feel absolutely hammered by the tax burden at the moment. On the subject of this particular motion, I hope we can agree that there is a problem because the wealthiest people can avoid inheritance tax through various loopholes.

[Noah Law]

Does the hon. Lady really believe that the top 4% of households are being “hammered” by inheritance tax right now? I do not believe that is the case.

[Daisy Cooper]

The hon. Gentleman’s first question was broader and was asking about the capacity of businesses generally to pay for advance tax planning. Hopefully we can all agree that the tax code in this country is so complicated that unfortunately people must seek expert tax advice. Our tax system could be much simpler. The point that I was trying to make is that there are problems and loopholes with this particular tax. We have one of the highest headline rates of inheritance tax in the OECD, yet only 4% of estates end up paying it. The burden often falls on those who cannot take advantage of the loopholes and exemptions that are available to those with access to expensive tax advice.

We would reform inheritance tax to make it fairer, but let us be clear: a mini-Budget style approach to tax cuts is not the way to do it. There is a better alternative. If we want to help people who are being squeezed by the cost of living, the fairest and most effective approach is to cut income tax. We Liberal Democrats have done that before; when in power, we would do that again. In Government, we cut tax for millions of people, taking 3.4 million people out of income tax altogether. Today, we Liberal Democrats are committed to raising both the income tax personal allowance and the national insurance threshold to £15,000 over five years—[Interruption.] Conservative Members ask where we are going to find money for that—I will tell them.

[Paul Holmes (Hamble Valley) (Con)]

The hon. Lady is making an excellent case for her leadership campaign. If the Liberal Democrats got into government and put these policies forward, does she believe that the leader of the Liberal Democrats would be there to do it?

[Daisy Cooper]

Yes. Of all political parties represented in this Chamber, the official Opposition will know that the leader of the Liberal Democrats was an excellent climate Minister in the coalition Government. Our party leader is an economist and would never, ever have done what the hon. Gentleman’s party did with the mini-Budget.

Our Liberal Democrat policy would take a further 2.5 million people out of paying income tax altogether. While the Conservatives’ proposal would benefit only around 30,000 people, funded through a mini-Budget style approach to tax cuts, our plans would deliver tax cuts to more than 30 million people across the country. Crucially, we would pay for that responsibly through the growth dividend generated by a new growth and defence partnership with the European Union.

[Dr Murrison]

What would the hon. Lady say to her constituents about this subject? I have been looking on Rightmove at houses prices in St Albans, where a very nice but semi-detached house in Carlisle Avenue is on the market for £1.4 million. She has just dissed those people by saying they will not be a priority for tax cuts at the next general election. Can she advise how they should vote?

[Daisy Cooper]

I know exactly where Carlisle Avenue is. Based on the demographic of that ward, I might go and knock on that door and ask if their mortgage went up after the Liz Truss mini-Budget.

We Liberal Democrats are clear: rebuilding our relationship with Europe is the single biggest lever available to increase economic growth, to boost living standards and to cut personal tax. For as long as the Conservative party refuses to acknowledge that, it will remain an anti-growth, anti-business party. We Liberal Democrats know that economic growth is not an end in itself. As we grow the economy, it is incumbent on all parties to ensure that the benefits of that growth are shared widely across the country.

[Paul Holmes]

In the hon. Lady’s view, what would be the greatest thing to increase growth and business growth in this country? Would it be rejoining the European Union, or would it be halving national insurance contributions by businesses for people aged 18 to 24?

[Daisy Cooper]

I can tell the hon. Member that, based on the statistics, the thing that would bring the biggest amount of growth would be having a closer relationship with Europe. He will know that we Liberal Democrats opposed the rise in national insurance contributions, and we have said that we would like to see the reversal of the lower threshold as an immediate move to give businesses back the incentive to give young people jobs, given the crisis of young people not in education, employment or training. That is why our plans link the additional growth generated by a stronger partnership with Europe directly to tax cuts for working people. That is the fair way to help families facing the cost of living crisis, the responsible way to cut taxes and the honest way to pay for tax cuts, unlike the Conservatives’ unfunded promises.

[Patrick Spencer (Central Suffolk and North Ipswich) (Con)]

Where is the fairness in rightly reducing an earning couple’s tax bill over time so that they can accrue capital and buy a house, only for it to be taxed when they want to leave it to their children?

[Daisy Cooper]

I think we all accept that there are many unfairnesses in our tax system and that there are many tax reforms we want to see for growth. I have acknowledged in my speech that there are unfairnesses in the way that inheritance tax works, but scrapping taxes in an unfunded way is not the way to reform tax in this country, and it is certainly not the way to run the economy. Rather than offering another round of economic fantasy, we Liberal Democrats have a credible growth plan that would make the United Kingdom safer, stronger and more prosperous.

16:39

[Andrew Lewin (Welwyn Hatfield) (Lab)]

We live in challenging times, with heightened security threats, inflation and cost of living pressures driven by Trump’s war in the middle east. Our NHS is still recovering from the pandemic and from Liz Truss, yet the priority set out by the Conservatives in today’s motion is cutting public spending to give more money away to people inheriting sums of money greater than £1 million. That is sad and predictable, but it is not surprising.

As it stands, the Conservatives know that they are not serious contenders for government, so they have reached back into a comfort zone. They hope that by sending a message to some of the wealthiest people in our society, they might hang on to a few more votes, but I am afraid that people across the income spectrum in my constituency and across the country will see right through this policy. My constituents know that we can ill afford a tax giveaway to people who are already fortunate enough to inherit £1 million tax free.

The facts matter. Under the current system, only around one in 20 people pay inheritance tax on their estates at all, so the winners from the Conservatives’ proposition will be about 5% of the population, while the rest of us are left to pick up the bill. An independent analysis has found that the proposal could cost the Exchequer upwards of £10 billion a year, as my right hon. Friend the Minister said. The political choice matters too. I believe in maximising opportunities for people from all backgrounds. The question we should be debating in this House today is not how we make things easier for those who rely on inherited wealth, but how we make things easier for those who do not have access to inherited wealth.

Last year, the bank of mum and dad provided more than £9 billion in gifts to their children and, in some cases, their grandchildren. Every parent and grandparent who has the ability to offer support to their loved ones will do so and should be encouraged to do so. The average sum given by the bank of mum and dad was £55,000—a very significant amount of money, wherever you are in the country. That is great for those who are in such a fortunate position. There will be people in this Chamber who have been able to give and receive money, and we should acknowledge that.

[Dr Ben Spencer (Runnymede and Weybridge) (Con)]

Does the hon. Gentleman understand that the bank of mum and dad comes from the hard work of mum and dad so that they can pass things on to their children?

[Andrew Lewin]

I absolutely understand that point, but there are many millions of people in this country who work just as hard but who, through no fault of their own, are not in a position to hand down tens of thousands of pounds to their children.

If you will indulge me, Madam Deputy Speaker, I want to use the opportunity presented by this debate to talk a little bit about my own proposal on intergenerational fairness. I have a policy idea called the citizens advance, which I came up with a year or so ago. It is a policy offer that would give people the opportunity to move their lives forward irrespective of their background. This is how it would work: after 10 years in work—10 years of national insurance contributions—the state would say to people, “We’re going to give you a choice. You can keep your current state retirement age”—which for most young adults today is 68—“or you can put back your state retirement age by a year to 69, and in return, you will receive the value of one year of your state pension as a lump sum.” From April next year, that will be £13,000. That is my idea; I am very pleased that the Social Market Foundation has taken it on, and I encourage any Members who are interested to read its detailed and costed policy paper. I can assure my right hon. and hon. Friends on the Front Bench and in the Treasury that they will be hearing more from me on this subject in the weeks and months to come.

I make that point because I want to engage seriously with the idea of intergenerational fairness, which is important to me and to many of my constituents.

[Dr Caroline Johnson (Sleaford and North Hykeham) (Con)]

It is clear that the hon. Member is taking this issue very seriously and thinking about it very deeply. What does he think about inheritance tax on businesses? I give him the example of a bandage factory making sterile bandages, owned by a family, where the 40-odd-year-old gentleman currently running that factory stands to lose quite a lot of money when his father dies. That will mean laying off people or selling the factory. How does that help the people who work there?

[Andrew Lewin]

I obviously do not know the circumstances of that particular business, but I do know that, as the Minister set out, there is a threshold of £2.5 million under which no business will pay any inheritance tax at all. I think that is a fair place to start, and that is the status quo.

[Antonia Bance (Tipton and Wednesbury) (Lab)]

Has my hon. Friend taken a moment to work out the example put forward by one Conservative Member of the £3.5 million-worth of assets belonging to a family business in his constituency? After taking into account the threshold of £2.5 million and the further £1 million of assets, the actual inheritance tax due by that business is £20,000. That will be what is payable—£20,000 per year for 10 years, an amount that ought to be manageable for a business with £3.5 million-worth of assets. Does my hon. Friend agree that the Minister has set out why this tax is important to rebuilding the public finances?

[Andrew Lewin]

I am grateful to my hon. Friend, who speaks powerfully and with great experience on these issues.

I will draw my remarks to a close by returning to the proposition put forward by the Conservatives today. I am sad to say that they are a party retreating to their comfort zone. They could have come to the Chamber today and said, “Let’s have a debate about how we invest in defence or public services, or about new ways to support businesses”, but I am afraid that their choice and the choice made by their leader is a giveaway to the top 5% of estates in this country. I am a meritocrat. I want a society that is less reliant on family wealth, not more—a society that maximises opportunity for all. I am sorry that that is not a vision that the Conservative party seems to share.

[Madam Deputy Speaker (Caroline Nokes)]

With an immediate six-minute time limit, I call Patrick Spencer.

16:48

[Patrick Spencer (Central Suffolk and North Ipswich) (Con)]

If it is okay with you, Madam Deputy Speaker, I am going to approach this debate in two sections.

First, let me paint a picture of the reality faced by residents in my constituency. I am blessed to represent a constituency that has everything—yes, rural communities made up of farms large and small, but also towns populated with small and medium-sized independent businesses that hon. Members should visit, such as Simpson’s Sweets and Bulstrodes of Framlingham, Luxmoore of Framsden, Buckle Shipping of Blakenham, the Lion pub of Debenham and Milsoms of Kesgrave. Many of those businesses are family owned and run, and many of those family businesses are made up of parents working with children, nephews, nieces, brothers, sisters and even grandchildren.

There is a palpable love and passion among family members working for something that their parents, uncles and grandparents built. There is care for customers and a profound camaraderie among team members that is so hard to replicate. These businesses are not just great places to work; they provide world-beating products and services. Dingley Dell in my constituency sells pork products—[Interruption.] It is a real place. It sells products to the Oberoi Hotel in New Delhi.

[Dr Neil Hudson (Epping Forest) (Con)]

Are there any black Labradors at any of the premises that my hon. Friend mentions?

[Patrick Spencer]

I am happy to report that the black Labrador population of Suffolk is thriving.

SEERS Medical in Debenham sells medical equipment around the world. Such businesses are invaluable to our economy and society. They not only provide jobs, but pay their taxes, which supports critical public services. We need businesses to boost productivity and to supercharge social mobility.

For so many of my local businesses, there is an unquestionable sadness that the current Government seek to penalise them for wanting to keep a business in the family. That cannot be truer for families of farmers who have tended to land for generations, waking up early and dedicating unimaginable hours, seven days a week, 52 weeks a year. Now they are told that they have to give that up, because this Prime Minister does not have the temerity to get to grips with the welfare budget and because this Labour regime cannot bring itself to stand up to the civil service unions that want to work four days a week for more pay. Yes, everyone heard that right: this Government want to tax the farmers and the entrepreneurs who work seven days a week so that civil servants in London can work four days a week.

The Labour party was founded to protect workers’ rights, but workers in my constituency feel abandoned by this Government. The iniquity of this social and economic contract negates the utter lunacy that seems to govern the Government’s approach to our public finances. I would welcome anyone in this Chamber, or anyone in this country, making a reasonable argument that public spending in its current form, with interest rates at record levels and rising, is sustainable. We have a debt-to-GDP ratio of approximately 100%, with £3 trillion in debt outstanding. We borrowed more than £134 billion last year alone. As a percentage of GDP, we spend as much now as we did at the height of the global financial crisis when we were bailing out banks, and as much as we did during the mid-1970s. By complete coincidence, that was the last time we had a proper left-wing Government like this one in place.

How many warnings from the International Monetary Fund do we have to put up with until the Government suddenly take note and realise that they cannot borrow and spend their way out of a crisis? In June 2026, September 2026 and just earlier this week, international economists have said enough is enough.

[Noah Law]

Will the hon. Gentleman give way?

[Patrick Spencer]

I will not.

The Government have a chance to U-turn. It is a move with which they are now all too familiar. They should show some gumption and cut welfare, grow a backbone and not let the slackers in Whitehall get away with a four-day working week. The Government should cut taxes on the productive half of our economy, allowing businesses and families to pass the homes that they worked and saved for on to their children. The Prime Minister loves a football analogy. This is the biggest open goal he will ever face in his career. He should do the right thing: cut taxes, cut spending and support businesses.

16:53

[Catherine West (Hornsey and Friern Barnet) (Lab)]

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.

[Rebecca Smith (South West Devon) (Con)]

I wonder whether the hon. Lady might like to comment on the fact that from next April pensions will be included in what is being described as “inherited wealth”. Does she agree that pensions are not inherited wealth, but money that has been earned and set aside by those doing the right thing? Now there will be a cost to ordinary families when they hand that money down.

[Catherine West]

As the hon. Lady knows, a commitment has been made not to tax those who only receive the state pension. Those who earn a lot, whether through pensions, inheritance or other things, will be taxed proportionately, which sounds like a pretty fair principle to me.

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.

[Dr Caroline Johnson]

Will the hon. Lady give way?

[Catherine West]

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.

17:00

[Peter Fortune (Bromley and Biggin Hill) (Con)]

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.

[Noah Law]

Does the hon. Member care to recall how many pubs closed on the previous Conservative Government’s watch, and just how big a deficit we were trying to fill through some of the interventions to which he referred earlier?

[Peter Fortune]

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.

[Gregory Stafford (Farnham and Bordon) (Con)]

I know that, like me, my hon. Friend is a champion of his local pubs. I put on the record that one of my local pubs, the Crown in Arford, has just won my “best pub” competition.

On my hon. Friend’s point about taxation, we tax cigarettes to stop people smoking. If we tax jobs, we have fewer jobs, and if we tax economic growth, we have less economic growth. Why does he think that Labour does not get this?

[Peter Fortune]

My hon. Friend is absolutely right: you tax something to stop it happening, and if you tax jobs, they stop being created.

[Andrew Lewin]

The hon. Member is a friend—we play cricket together in the parliamentary team and have therefore shared a few pints in a pub. He is of generous spirit. Does he recognise that this Prime Minister is cutting taxes on pubs by 20%? That is something that everybody in the House should welcome.

[Peter Fortune]

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.

17:06

[Phil Brickell (Bolton West) (Lab)]

The wording of the motion in the name of the Leader of the Opposition

“calls on the Government to cut public spending in order to abolish Inheritance Tax on family homes, farms and businesses.”

That is abolition without conditions, without qualification, without any taper whatsoever, and without any reference to the growing cost of social care or the vital contribution that inheritance tax receipts make to supporting our ageing population. Let me be clear that it is the Conservatives who are proposing a tax break, paid for by cuts to public spending, for those who have inherited or accumulated considerable wealth. It is a tax break for the wealthiest 5.5% who are forecast to be subject to IHT this year.

Let us be honest about what the Conservatives are proposing. They are proposing to abolish a progressive, redistributive tax in its entirety, at a potential cost of £10.8 billion a year, to benefit a small minority of the very wealthiest estates. I have no objection to people wanting to pass something on to their children—it is a natural and valuable part of being a parent—but the question before us is not whether families should be able to pass on their hard-earned assets fairly, but whether the right priority for this country is to abolish inheritance tax altogether, regardless of the cost, and I think the answer is clear.

I do not want to dwell too much on figures, but one figure is worth remembering. My constituency is a varied one—it has affluent areas and not so affluent areas—yet at the last general election, fewer than 1% of estates in my Bolton West constituency were expected to fall within the inheritance tax threshold. So I have to ask, on behalf of my hard-working constituents: who exactly are the official Opposition speaking to with this proposal, because it will do precious little for the overwhelming majority of people in Bolton, Blackrod, Horwich and Westhoughton? It will not help the small business owner struggling with rising costs in Westhoughton, it will not help the single mum in Horwich managing the weekly shop, it will not help the pensioner in Blackrod worried about their energy bills and it will not help the young person in Bolton trying to get on the first rung of the housing ladder.

It is designed to benefit a small minority with the largest estates. Let me reiterate the remark of my hon. Friend the Member for Welwyn Hatfield (Andrew Lewin) that this is a return by the official Opposition to their “comfort zone”. Most families in my constituency—and, I wager, in the country at large—would far rather see that money used to tackle the cost of living crisis, improve public services and give working people some breathing room.

The official Opposition may have concerns about the tapering of the personal allowance for earners over £100,000 and the high marginal tax rates that can create, or the economic distortions that follow. Those are legitimate subjects for debate, but they are not the motion before us today. If the Conservatives wanted to bring forward proposals that would genuinely help ordinary families, they had plenty of alternatives. They could have focused on cracking down on aggressive tax avoidance and evasion, which deprives the public purse of billions of pounds that could otherwise fund our public services. They could have tackled the tangled web of professional enablers who help wealthy individuals—and, yes, some businesses—to conceal assets, exploit loopholes and avoid paying what they owe. They could have proposed a fairer tax system that levels the playing field between online giants and high street businesses. Those are debates worth having. Those are the sorts of proposals that could command support across this House. Instead, the Conservatives have deliberately chosen to pursue a narrow partisan agenda that benefits those who are asset-rich, while offering precious little to those who need help the most.

That brings me to the wider question of priorities, because this Government understand that helping people with the cost of living means taking practical action on the bills they pay, the services they rely on and the businesses that sustain their communities. This Government have pursued those, including through scrapping VAT on electricity bills for this winter. Those are practical measures. They speak to the everyday concerns of working people, families and, yes, small businesses. That is what responsible government looks like. Yet the Conservative party, by contrast, wants us to believe that the answer to the pressures facing this country is to spend less on public services so that a small minority can pay less tax on their estates. I must say that it sounds remarkably like they have learned little from the Liz Truss debacle. What they are proposing means less money available for public services, less money to support vulnerable people and less capacity to address the pressures facing our country.

If the official Opposition are serious about rebuilding their support across the United Kingdom, about speaking to people in every community and about demonstrating that they are ready to govern again, they should scrap this motion. They should focus on the issues that speak to the country at large. Politics is about priorities. In choosing the complete abolition of inheritance tax as the subject of today’s Opposition day debate, they have sent a very clear signal: tax cuts for a small minority over support for the many and the interests of the wealthiest estates over the needs of children growing up in poverty. They have chosen to spend billions on a policy that will do precious little for my constituents across Bolton West. That is why I will not be supporting the motion.

16:25

[Blake Stephenson (Mid Bedfordshire) (Con)]

Madam Deputy Speaker, I am sure that you will agree with me that there are few instincts more human than wanting to leave something behind for your children: a home you have paid for, for over 30 years, perhaps; a farm your grandfather worked before you; or maybe a business you built from nothing. I know that Members on the Conservative Benches know all about all three. On this side of the House, we believe that hard work should be rewarded. On the Labour side of the House, as we have heard over the past few years and today, they simply cannot resist their natural instincts to penalise aspirational homeowners, farmers and business owners.

Let us remember that inheritance tax was once something that only the very wealthiest had to think about. But not anymore. The nil-rate band has been £325,000 since 2009, and this Government have frozen it all the way up to 2031. Over the same period, we know that house prices have soared right across the country. The result is that receipts have hit a record £8.2 billion and the Office for Budget Responsibility expects them to reach almost £14 billion by the end of the decade. Analysis by Tax Policy Associates suggests that by next year around one in five pensioner households will face a bill if they die. That was not in contemplation when inheritance tax was first envisaged.

From April next year, because the party opposite cannot get enough of hoovering up people’s wealth, unspent pensions will also be dragged into the liability. That is not a tax on the super-rich; it is a tax on hard-working constituents right across the country, including those in three-bedroom semi-detached houses where they have raised their children and, as we have heard today, including families in Carlisle Avenue in St Albans, no less.

[Daisy Cooper]

It is fascinating that the Conservatives are so obsessed with Carlisle Avenue. I have just looked up Carlisle Avenue’s local election results from last May: one half of the street is in Bernards Heath ward, where the Conservatives came fourth, and the other end of the street is in another ward, where the Conservatives came fifth. Does the hon. Gentleman think there are structural issues with his party that mean that people living on Carlisle Avenue have no interest in its policies?

[Blake Stephenson]

I am impressed by the hon. Lady’s research between the intervention earlier by my right hon. Friend the Member for South West Wiltshire (Dr Murrison) and her making that point now. I might add that constituents on that street may have been duped by some Lib Dem bar graphs.

Mid Bedfordshire is a rural constituency with many farming families, as is the case right across the country. They were told in October 2024 that the Government were coming for the land that they have worked for generations. Thanks to their hard work, campaigning and pressure from the Opposition, the Government retreated last December and raised the threshold to £2.5 million. Those farming families are grateful for that, but it does not go far enough.

Despite debate after debate in this House, the Government still do not seem to understand that a farmer earning a small yield from land worth millions on paper only, cannot cover the inheritance tax liability unless they sell the land. If the Government would prefer farmers to sell their land rather than farming it, they should just say so. If not, they should acknowledge that the incentives their family farm tax creates are simply wrong. Under their plans, a 20% charge still applies on land that often yields only 1% or 2% a year, but that is vital for them to help feed the nation.

The rules have changed twice in 14 months. A farm or business succession cannot be planned over a generation when the tax rules change every Budget. The same is true of a family business. The engineering firm, the builder’s merchant, the garden centre—up and down the country, great family businesses cannot plan their succession when they do not have certainty in the rules.

[Sir Ashley Fox (Bridgwater) (Con)]

Does my hon. Friend agree that it is completely iniquitous that family farms have to pay inheritance tax on their assets, and yet if those assets were owned by a foreign company or individual, no inheritance tax would be paid? Why do this Labour Government want to single out British-owned family farms?

[Blake Stephenson]

My hon. Friend makes a superb point. The Conservative Benches find it beyond all comprehension as to why the Government would target small family businesses and farms in the way that they have. I thank my hon. Friend for making that point.

When an owner of a small business or a farm dies unexpectedly, the family should be focused on keeping the business going and the staff in work, not on raising a tax bill by selling off pieces of the business until there is nothing left. The Government cannot talk about growth and then take apart small businesses because an owner has died. That is completely the wrong approach.

What will we do in Government? A Conservative Government will abolish inheritance tax on the family home; that is the right thing to do. We will replace today’s complicated allowances with a single £500,000 allowance per person—£1 million per couple. We will restore agricultural and business property relief in full, so that no family farm or firm is broken up to fund Labour’s welfare spending.

The Prime Minister says we cannot have national security without social security—an absolutely shocking statement. But we cannot have either without economic security; without an economy where people create jobs, expand businesses, buy homes and feel the benefits of doing so. Our reforms would ensure that welfare works for British citizens, that people with lower-level mental health conditions get treatment rather than being written off with a cheque, that more assessments are done face to face, and that the obligation to look for work means something. Getting people into work is good for them, good for their families and good for the taxpayer.

In two weeks’ time the Chancellor will deliver his first Budget. I know that Conservative Members are really looking forward to that day. The Chancellor has a choice: he can keep taxing work, savings and inheritance—taxing everything people own that is not nailed down and more besides, perhaps; let us see—to pay for a welfare bill that is truly out of control, or he can change course, get a grip on spending and help to power the engines of growth that will make us all richer. I know which choice families in Mid Bedfordshire would make.

17:20

[Tim Roca (Macclesfield) (Lab)]

Madam Deputy Speaker, “We do not only ask today, ‘How much have you got?’, we also ask, ‘How did you get it? Did you earn it yourself, or has it just been left to you by others?’”. The estate duties provide a “corrective against the development” of the “idle rich”. And, “It is a far better thing to tax the accumulation of the past than to burden the industry of the present.”

Those are not my words, Madam Deputy Speaker, but those of Winston Churchill, speaking 100 years ago. They raise a question that remains relevant today: do we want a country that gives people a fair chance to get on in life or one that keeps finding new ways to protect the wealth of those who already have the most?

This motion tells us exactly where the Conservative party’s priorities lie. It calls on the Government to cut public spending in order to abolish inheritance tax, but it does not tell us which services they would cut, whose support they would withdraw or which communities would pay the price. It simply says “cut public spending.”

That is easy enough to demand when one does not have to explain what it means for people’s lives. The Conservatives are asking us to approve billions of pounds in tax cuts without telling us how they would pay for them. That is not a serious plan; it is a tax giveaway looking for someone else to pick up the bill. They say that the proposals would cost around £6 billion by 2029-30, but as we have already heard from other hon. Members, once we take behavioural effects into account, the cost could be up to £10.8 billion.

Who would benefit? Around 30,000 estates are expected to benefit. Estimates suggest that around 90% of the gains would go to the wealthiest 20% of pensioner households, with around 40% going to the wealthiest 5%. Around 70% of the benefits would go to London and the south-east, despite those areas accounting for only a quarter of pensioner households. Meanwhile, under the current system, fewer than one in 20 estates face an inheritance tax charge—a figure that has remained relatively stable for several decades now.

Let us stop pretending that this is a tax cut for everyone; it is a substantial giveaway that would disproportionately benefit the wealthiest households to the tune of £10.8 billion. Nobody disputes that family farms matter, and families should be able to pass on and plan for the future of those farms and businesses. But wrapping a policy in the language of family farms does not mean that we should stop asking who benefits, and this proposal goes much further than targeted help—it is a wider tax break for the very wealthiest in society.

There are questions about how it would work in practice. Conservatives say that they want to help people to pass on their homes, but what happens if those tax changes give older people a reason to stay in a larger property rather than downsize? Someone might want to sell a large home, move somewhere smaller and release money to support their retirement or help their family, but if inheritance tax treatment makes moving financially unattractive, their policy could discourage exactly the behaviour that they say they want to encourage.

[Lewis Cocking (Broxbourne) (Con)]

That is exactly why we would abolish stamp duty when people buy their home as well.

[Tim Roca]

The Conservatives point to stamp duty as a barrier and promise to scrap it on a home, but removing one cost does not automatically resolve every other tax consequence, and we know that changes in tax policy are very behaviour sensitive. This is what happens when a party writes a policy to win a headline for a conference.

It brings me back to Churchill. More than a century ago, he challenged the idea that inherited wealth should be waved through simply because it happened to belong to the right family. He asked the straightforward question that I quoted at the beginning: did you earn your wealth, or was it left to you?

As my hon. Friends have said, people want to leave something to their children. There is nothing wrong with that. But why should the Government spend billions helping those who are already wealthy pass on even more while telling everyone else that public spending should be cut?

[Dr Johnson]

The hon. Gentleman is making a distinction between money earned by somebody and money earned by their father. If a man and his daughter run a business together and the father dies, should the daughter not inherit? How much did she earn the money by working in that business? Did she not earn it? Why should it matter? That business employs people—whom the hon. Gentleman has talked about—who will lose their job if that business must close.

[Tim Roca]

If the hon. Lady wants to have an argument with Churchill, she may do so, but I will not join her. I believe he was a great man.

Why should the Government spend billions helping those who are already wealthy? Why should families inheriting millions take priority over families struggling with bills? That is the choice at the heart of this motion: invest in services and support people who rely on them or hand a huge tax break to a small minority and leave everyone else to bear the cost.

The Conservatives’ record makes their claims of fiscal responsibility even harder to take seriously. Between 2010 and 2019 the national debt increased from £1 trillion to £1.8 trillion. That was before covid and the war in Ukraine. Debt to GDP increased from 69% to 84%. As Members have pointed out, we then got treated to the Liz Truss magic of a disastrous experiment in unfunded tax cuts that sent markets into turmoil and damaged confidence in the UK.

Then before the 2024 election we had many other promises of tax cuts worth billions that did not have any credible funding plans set behind them. Here they are again with another enormous tax giveaway but unable to tell us precisely which public services would pay the price. They have not learned the lessons of their failure; they just found new ways to replicate them.

The public finances are not a bottomless pit that politicians can dip into whenever they fancy announcing a tax cut. Every promise has to be funded properly, because it has consequences for real people. The Conservatives spent years telling people that there was no alternative to difficult decisions, yet when it comes to their own priorities, they make the promise and leave somebody else to deal with the bill. That is not fiscal responsibility; it is fiscal incontinence.

Their priorities are clear when we look at the two-child limit. The Conservatives indicated that they would reinstate a policy that would push 500,000 children back into poverty. At the same time, they want to direct a substantial tax benefit towards a tiny number of wealthy estates. The contrast is clear: they tell families on low incomes that the country cannot afford to help them, but they propose billions in tax cuts for the very wealthy. That is a choice, and it tells us who they put first in our society.

[Dr Johnson]

What proportion of people working in the private sector on low wages are employed by people who own businesses?

[Tim Roca]

As they say in “Father Ted”, that is an ecumenical matter. I am sure that the Minister will pick it up in his wind-up.

Labour Members have done a great job of outlining the fantastic measures that the Government are taking, including measures on VAT and electricity bills, capping bus fares and 24-hour bus travel for disabled people from next April, so I will not touch on those. I will finish on what has—I hope—been the main theme of my speech. Today is all about one thing: tax cuts for the wealthiest, cuts to public services for everyone else. It is the same old Conservatives. They have not changed at all.

17:28

[John Cooper (Dumfries and Galloway) (Con)]

Nothing illustrates the great divide between rural Britain and this urban-centric Labour Government quite like the family farm tax. This was a comprehensive failure to grasp how intergenerational farming works and a wilful failure to understand that asset-rich does not equate to cash-rich, as evidenced by the hon. Member for Tipton and Wednesbury (Antonia Bance), who is sadly not in her place.

A chill was sent through rural Dumfries and Galloway by changes to agricultural property relief, for this was not just about farmers but the wider community and the many jobs intertwined with dairy and beef, pigs and sheep, arable and horticulture. Since my election to this place, I have seen military veterans—some of the toughest people I have ever had the privilege to meet—well up, recalling comrades lost and maimed in the service of this country, and a woman in tears because duff pension advice had robbed her. I have had farmers weeping, too—men in their 80s, with hard knocks enough for many lifetimes under their belts. Those proud old men were crying not for themselves and what they thought they might lose in what little time lay ahead, but about what future generations would lose.

Many families realise that no child will now take on the stark new financial reality of farming. How incredible was it to sit in this place and watch Ministers giving advice on how to mitigate the damage their own policies were doing? Labour likes to roar about the 14 years we Conservatives had in power, but what were they doing in their 14 years in opposition? Clearly precious little proper planning, because the inheritance tax changes, which were so toxic that no one else would touch them, were dusted off in jig time amid a scramble to be seen to be doing something—anything—in that first 100 days.

Inheritance tax is invidious in all its forms: it is the state exacting a last drop from estates, which is gathered despite the taxman’s previous depredations. It is double taxation, for anything in the purview of His Majesty’s Revenue and Customs on death has already come through the storm of income tax, capital gains tax and VAT. That is why we Conservatives have pledged to reverse the cuts to agricultural property relief, abolish inheritance tax on the family home and raise the individual threshold to £500,000. That would mean that a couple could pass on their main home to direct descendants free from inheritance tax, plus a further £1 million without any inheritance tax liability.

[Dr Hudson]

These are people who are doing the right thing: farmers who feed us and look after our precious environment, family businesses supporting their local economy and families who work hard to provide a family home. Is not their being able to pass on their farms, family businesses and family homes to the next generation free from inheritance tax, about fairness?

[John Cooper]

I thank my hon. Friend, who speaks to farmers far more than Labour Front-Bench Members ever do. Indeed, he knows that this is about fairness. We Conservatives believe in rewarding those who have done the right thing: those who have strived and who have saved.

There is further positive news from our plan, as highlighted by the TaxPayers’ Alliance. In October 2024, the previous Chancellor of the Exchequer announced an increase in the interest rate on the late payment of taxes. The rate had been calculated on the Bank of England base rate plus 2.5%, but the Budget saw an increase in the surcharge to 4% above base, so the interest rate on late payment of tax is currently a usurious 7.75%. Asset-heavy, cash-light taxpayers such as farmers are particularly vulnerable to that change as it takes time to convert assets into a form that allows them to pay that balance.

Inheritance tax is due six months after death, after which interest is charged daily on unpaid tax. However, executors may struggle to meet the deadline because properties are illiquid assets that can take considerable time to sell, particularly when probate is required. Selling properties quickly may mean accepting a lower price, while waiting for a better offer can result in additional punitive interest charges. The probate process creates further difficulties as executors often need probate to sell inherited properties, yet generally inheritance tax must be paid before probate is granted.

[Noah Law]

The hon. Member is making a set of technical and important points. Does he not accept that for businesses of the size and scale he is talking about, whether family owned or not, succession planning and perhaps even life insurance are important tools that should be considered to mitigate some of the things he is describing? [Interruption.] I do not think that is unreasonable.

[John Cooper]

I thank the hon. Gentleman for his intervention, but he is talking about adding yet more costs on to businesses. I have heard from farmers who tried inheritance planning but were told that the bank would not pass on the working overdraft to young members of the family. It is much more complicated than he pretends.

Although HMRC may allow payments in instalments over 10 years or grant credit in certain circumstances, interest can still accrue after six months. That leaves taxpayers with higher bills through no fault of their own. The Conservatives’ allowing family homes to be excluded from inheritance tax, plus the additional £1 million allowance, would restrict the effect of that pernicious interest.

Meanwhile, we need to see agriculture not as a dripping roast on which the Treasury may feast, but as a rural powerhouse helping to feed the nation. If this Government were serious about their mantra “food security is national security”, they would halt the family farm tax right now and stop turning the human drama of a death into a financial crisis for the living.

17:34

[Richard Baker (Glenrothes and Mid Fife) (Lab)]

I know from bitter personal experience that a period of opposition is an opportunity for a political party to reflect on what went wrong in government, so that it can take a different approach and seek to win the trust of the country again. Unfortunately, it appears that the Conservative party is instead using its time in opposition to double down on the mistakes made in government. Of course, we must support our farms and our family businesses, but the complete abolition of inheritance tax, not only on farms and family businesses but on all family homes, does not represent sound stewardship of this nation’s finances. I am afraid that it is a proposal all too worthy of one of the key architects of Liz Truss’s disastrous mini-Budget.

For me, the key question about the proposal is its impact on my constituents in Glenrothes and Mid Fife. They are already paying the price of the SNP’s failures in education and health services, with still too many people in pain on NHS waiting lists. Medium-sized and large businesses in Scotland are paying some £54 million more each in year in business rates than their counterparts in England, and if the Scottish economy under the SNP had grown at the same rate as Manchester’s with Andy Burnham over the past 10 years, it would be £33 billion bigger.

My constituents need fiscal policies that meet their priorities, protecting both the economy and public services. The Opposition’s proposal does not meet that test. The latest available figures show that inheritance tax is payable on fewer than one in 20 estates. Just 1,620 of those estates were in Scotland, and in Glenrothes and Mid Fife, so few estates pay inheritance tax that HMRC withholds the figures to protect confidentiality. In other words, the number of people in my constituency who would benefit from the proposal is so diminishingly small that it is not possible for HMRC to publish the figures. With so few people in Glenrothes and Mid Fife qualifying for the theoretical benefit of the policy, we must look at the costs.

The Opposition have said that the proposal would cost £6 billion, but as a number of hon. Friends have mentioned, Tax Policy Associates estimates that the cost could be up to £11 billion a year once behaviours as a result of the tax change are taken into consideration. Forty per cent. of the benefit of the cut would go to the richest 5%. Once again, the Conservatives are the party of the few and not the many.

Given the pressures being felt by UK households because of the challenges facing the global economy, the cost of living increases for families across the country and the challenges facing key public services such as social care, how on earth can this be a policy priority? How can the abolition of inheritance tax, not just on farms and family businesses but on all family homes, be a priority for any Government who truly have the interests of the whole country at heart?

My constituents need actions like those already taken by this Government, which include scrapping VAT on energy bills, action on business rates, which is needed in Scotland as well, and procurement changes to back British businesses and jobs. They do not need billions of pounds of investment in policies that will benefit precious few people in the communities I represent. Our pensioners and our older people need a Government who are prepared to act on real priorities, such as social care.

It is highly regrettable that the First Minister of Scotland has spent more time propagating factually incorrect statements on the proposal to adjust the triple lock than on dealing with the reality of social care in Scotland. Just as in England, in Scotland people who require care support face high social care charges, services are under-resourced and social care workers are underpaid.

[Paul Holmes]

The hon. Gentleman mentioned the Government’s pledge to reduce energy bills. When he stood at the election, did he exalt the policy of reducing energy bills by £300 that was put forward by the former Prime Minister? Now that that has been reduced to £45, has he apologised for the bit that he has not delivered on?

[Richard Baker]

We are already acting. We have already cut VAT from energy bills. What we are not going to do is invest up to £11 billion in priorities that do not represent the needs of people who are facing those high energy bills at the moment. It is this Government who are showing that they are prepared to take action on the real priorities of my constituents and this country. The spending proposals from the Opposition show, regrettably, just how far they remain from being a credible party of Government again.

17:40

[Mr Gagan Mohindra (South West Hertfordshire) (Con)]

Every day, millions of hard-working people work, earn and contribute to our economy with the principal goal of providing for their children, both in the present and in the future. For many, these jobs are much more than a payslip. They are the pillars that allow a family to function, grow and thrive. As a former family business owner, I know just how valuable such opportunities can be. Today’s debate is important not simply because it is about business, but because it is about protecting opportunity. It is about ensuring that the next generation has the chance to develop the skills, confidence and experience that will shape the rest of their lives and careers.

I spent my summer on my annual work experience tour in South West Hertfordshire, visiting local businesses to volunteer my time and understand how they operate, and to learn about the challenges they face. In Kings Langley, I went to Wayside farm to shadow Charlie, who has been running the farm for over 30 years. It is one of only two dairy farms remaining in Hertfordshire. I pulled pints behind the bar of the Unicorn in Abbots Langley, run by Debbie and Ady. Debbie started as an employee, learning all about the pub before taking over. This is exactly the sort of entrepreneurship we should be encouraging. I visited Unit VII in Rickmansworth, an artisan coffee shop owned by married couple Raman and Zarina, who also host community-focused events for my residents. Finally, I visited a car parts store in Kings Langley, a family-owned business that has grown so successfully that it has opened more stores and employed people across the country, helping the local economy in my constituency and, I am sure, in those of many other MPs in this Chamber.

All those businesses repeated the same message: Labour’s harmful policies of increasing national insurance contributions, strict rules and regulations, and soaring energy costs mean that these small, independent businesses are now having to make difficult decisions about hiring and opening hours, when they should be supported and encouraged to grow their businesses. Labour has also reduced opportunities for young people to get their foot on the career ladder. Hospitality businesses in particular, which have historically relied on seasonal work and training young people up, can no longer afford to do so, meaning that our young people are going without the opportunities that should shape the rest of their lives.

Growth happens when family businesses have the confidence to invest, expand and create jobs. That is why this Government must work with businesses, not against them, and it is why the Conservatives would abolish the high rates of inheritance tax on the farms, homes and businesses that support economic growth and local communities. We would abolish business rates for thousands of retail, hospitality and leisure businesses, cut the red tape that prevents employers from recruiting young people, and introduce our cheap power plan, which would cut electricity bills by 20% for businesses.

In conclusion, this debate is ultimately about opportunity. My residents should not work hard to provide for their children’s future, only to have that investment taken away to pay for an ever-increasing welfare bill. Every family business is a testament to community, to innovation and to shared prosperity, and these opportunities are worth protecting. I am incredibly proud of all the family-run businesses I have in South West Hertfordshire. I urge the Government to recognise the damage that they are doing to these family businesses, and to work tirelessly to ensure that my residents are not punished for a life of hard work.

17:43

[Noah Law (St Austell and Newquay) (Lab)]

The Conservatives’ decision to cut inheritance tax for the wealthiest tells us exactly where their priorities lie: not with the everyday working man or woman but with the very wealthiest in our society, and not with constituents such as mine but with the wealthiest 4% or so, whose estates are affected by inheritance tax.

The Conservatives’ proposal would allow couples to leave their children £1 million of wealth, on top of a potentially very large home, without paying a penny in tax. They claim we are the party of welfare, but what does that make them? Tax cuts for the wealthiest paid for by spending cuts that take our country’s public services backwards. They tried that for 14 years, and it left our country poorer, sicker and economically stagnant. It is clear that they have not learned their lesson. Arguing for the effective abolition of inheritance tax sends a different message to what could be a much more reasonable debate about, say, uprating the threshold in line with inflation.

[Chris Vince]

My hon. Friend is making a powerful speech. Does he agree that the Conservatives’ argument would be far stronger if it was focused, as many of their speakers are, on family businesses and family farms? The motion talks about the abolition of all inheritance tax, including on estates. Surely that weakens their argument.

[Noah Law]

That is quite right. This is not pragmatic at all; this is complete ideology and returning to— [Interruption.] It is. It is pure ideology. The Conservatives are returning to their core comfort zone of defending only the very wealthiest at the expense of all the rest of us.

[Rebecca Smith]

I thank the hon. Member from my neighbouring county for giving way. I think his constituents would be quite shocked at him accusing the Conservatives of being ideological. Where is the aspiration for someone in Austell and this Cornwall constituency to grow those family businesses and to expand their family farms? Ultimately, his constituency is incredibly similar to mine, and I am in no doubt that some of the properties there are incredibly expensive but the salaries are not high. I challenge him; his constituents will have heard him say that they are fine with that, and that he is just tackling us from a point of ideology.

[Noah Law]

I respect the point the hon. Member makes and fully respect what she says about the aspirations of those of us who grew up in rural areas where property prices are often inflated. But I will be honest: I know very few people from back home who have ever paid inheritance tax. I do not know these people. If she would like to correct me on that—

[Dr Johnson]

On the point of ideology, what I have tried to get from my interventions is an understanding on the Government Benches that inheritance tax penalises people at all levels. If people do not start a business because it is not worth the bother, if they do not invest because it will be taken off them, and if they cannot pass a business on to their children and, as a result, it has to be sold and the jobs are lost, people do not have jobs and employment, and everyone is affected.

[Noah Law]

It is objectively untrue that inheritance tax penalises people at all levels. It penalises, at best, 4% or 5% of people with the wealthiest estates. I understand the cultural arguments that the Conservatives are making about aspiration and all the rest of it—we should all strive to support that—but, as my hon. Friend the Member for Harlow (Chris Vince) pointed out, this proposal is not pragmatic at all; this is bonkers.

[Peter Dowd (Bootle) (Lab)]

My hon. Friend the Member for Macclesfield (Tim Roca) referred to Winston Churchill. I often like to refer to Shakespeare, because I think that goes a little above that. Shakespeare said:

“no legacy is so rich as honesty.”

Does my hon. Friend agree that this debate from the Opposition is dishonest? They left the finances of this country in a mess, and they have to be honest about it and face up to that.

[Noah Law]

We would do far better to have a pragmatic debate, as my hon. Friend suggests. Perhaps we should look at uprating the thresholds or bringing in more tax revenue through some of the means that the Treasury is exploring. I would be keen to hear in the Minister’s winding-up about progress on that.

This Government are already investing £1.7 billion in improving the efficiency of tax collection and cracking down on tax avoidance. That should yield an extra £7.5 billion a year by 2029-30. Are these not the kind of discussions we should be having, rather than just encouraging more and more tax avoidance by people who, quite frankly, can afford to pay their way? It should be clear to those on both sides of the House that the answer to the very richest avoiding taxes is to legislate to close those loopholes and not to cut their taxes, which is exactly what a would-be Tory Government are proposing to do.

17:49

[Robbie Moore (Keighley and Ilkley) (Con)]

Like all Members of the House, I am sure, I do an incredible amount of outreach with many of the family businesses that we are lucky to represent as constituency MPs, from our manufacturers and engineers, to those in our garden centres and breweries, and our hoteliers and farmers. They are telling me constantly that, from the last two Budgets alone, business and operating businesses in this country is difficult. We have seen an increase in employer national insurance, an increase in the minimum wage, and everyone over and above that minimum wage wanting the increased differential. Business rates now apply much more strongly than they ever did under the previous Conservative Government.

The Employment Rights Act 2025 effectively now makes it much more challenging for an employer to take on an individual and offer that young person an opportunity. My inbox—like, I am sure, those of many hon. Friends and probably of Labour Members—has been filled with emails from people representing those with disabilities or special educational needs, who are now struggling to get a job because of the Employment Rights Act, which makes it much more difficult. It is challenging.

Then, of course, we have the additional issue of the changes to inheritance tax, which impact all family businesses. A huge amount of pressure was rightly put on the Government, initially to increase the threshold, but ultimately in wanting 100% relief for agricultural and business properties. We saw movement from the threshold of £1 million to £2.5 million, and we now have the bizarre scenario that for someone who is married, the threshold will be £5 million—the first time we have ever seen a differential under IHT.

The reality of that scenario is stifled investment, because many manufacturing and engineering businesses in my constituency are now saying, “Rather than investing in growth as we wanted to do and had programmed in over the next five or 10 years, we are stopping that. We now have to think about mitigating a tax liability at 20% over and above the £2.5 million, which we were not programming into place.” Ultimately, that is having an impact on growth in my Keighley constituency.

[Jerome Mayhew (Broadland and Fakenham) (Con)]

I refer to my entry in the Register of Members’ Financial Interests, because I have been involved in a family farm and have created a family business—[Interruption.] Thank you. One of the really odd aspects of this issue is that the Government seem to be confusing business assets with personal wealth. How can that possibly be fair?

[Robbie Moore]

My hon. Friend makes an excellent point, because that was exactly the narrative that his farmers put to me when I was lucky enough to visit them in Norfolk late last week. If someone is running a family business, the rate of return on their capital might be 1%, but they are lucky if they are getting that. Therefore, there is no return, yet when a valuation of that farm is made on death—not just of the farmland; there might be a farmhouse, a cottage or two, growing crops, stocks in store, machinery and livestock—they are well above that threshold of £2.5 million or £5 million if they are married, and the farming business is then subject to a liability. That is tough, which is why I was so shocked when not one Liberal Democrat MP voted against the implementation of the fertiliser tax, which has made it much more difficult for those family farming businesses.

Then there was the cliff edge in April 2026, when no real warning was given to many of those family businesses. A cruel cliff edge existed, and as a matter of fact—it gives me no pleasure to say this—lives have been lost as a result of the decisions that this Labour Government have made. There has been suicide recorded in coroner’s reports as a result of this Labour Government’s choices through the implementation of inheritance tax changes.

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

My hon. Friend is making an excellent speech, but I wonder if he spotted this quote?

“Although many of my farmers tell me the earlier U-turns made a substantial difference, others are still deeply worried about the impact this policy will have when passing a sustainable farm business to the next generation”.

He might be aware that those are the words of the hon. Member for Penrith and Solway (Markus Campbell-Savours)—a Labour Member; they are part of his call for the Labour Government to completely scrap their plans to abolish agricultural property relief. The hon. Gentleman is right: the Labour Government should scrap it completely.

[Robbie Moore]

That is absolutely right. It is good to see the hon. Member for Penrith and Solway (Markus Campbell-Savours) in his place. I hope that he will intervene in the debate and make it clear that he is also advocating for this cruel tax to be scrapped, just as the Conservatives are doing. There is hope when at least one Labour Member is willing to be bold enough to stand up against this Labour Government.

[Dr Scott Arthur (Edinburgh South West) (Lab)]

I regret that the hon. Gentleman has talked about suicide in this debate. Where was he when we heard the reports of the austerity implemented by his Government causing suicide? Are any Members on the Opposition Benches willing to defend that record? When invoking suicide in this debate, they have to acknowledge their own record.

[Robbie Moore]

I also regret the fact that I am talking about that issue. However, many farming representatives, including those from the National Farmers’ Union, the Country Land and Business Association and the Tenant Farmers Association, gave clear warnings to this Government that if the cliff edge associated with this tax became a reality in April 2026, there would be emotional consequences, such as anxiety. I regret that I have raised the matter, but unfortunately it is absolutely the case that suicide has taken place.

There will be a moment of hope in two weeks’ time when the Budget comes before the House: the Government could bring in 100% relief of APR and business property relief again. I urge the Government to do so and to listen to those strong calls from the industry. The hon. Gentleman asks where I was during austerity. Well, I have been a Member of Parliament for only six and a bit years. Before that, I was not in this place making any of those decisions.

There are also issues around the changes to the implementation of inheritance tax. The first payment of the tax will be due within six months of death, but the asset base will first have to be valued, so inevitably there will be challenges. The district valuers do not have the capacity to deal with the level of challenge that will come from those handling the probate valuations that will inevitably have to take place.

It worries me that, as the IHT debate has taken place in the House over the past two years, hardly any Labour MPs have stood up and advocated for the manufacturing, engineering and hotelier businesses that, I suspect, employ many of their constituents, providing them with their salaries and with opportunities to continue in a working environment. That worries me because I feel that the narrative has been lost to Labour Members. We have got time before the Budget for that narrative to change, and I firmly stand with the Conservative position that 100% relief for APR and BPR must be put back in place, and I ask the Government to listen and do something about it.

17:58

[Alicia Kearns (Rutland and Stamford) (Con)]

There is a principle at the heart of the motion and it is a simple one: what a person earns through a lifetime of work belongs to them and not the Treasury, and that when the time comes, they have the right to pass on what they have earned to the people they love. It is neither a loophole nor a privilege. It is the oldest instinct there is: for people to work, to save and to leave their children better off than they were. That stands in stark contrast with the Government’s approach. The question that we have put before the House is not complicated: should Governments spend less so that families can keep more? The Conservatives’ answer to that question is yes.

In the Mandelson files published this summer, we saw that the Secretary of State for Work and Pensions wrote to Peter Mandelson:

“Every meeting I have is, ‘Who can we tax in order to pay benefits to others’.”

He was right to be exasperated. Some 7 million people—more than 10% of our population—now claim at least one benefit. We will spend over £100 billion on health and disability benefits just this year. A full-time worker on the national living wage takes home £22,500 a year. Someone out of work on credit, with the average housing support and personal independence payment, receives £25,000 a year. We now pay more not to work than to work. However, if somebody has worked and then dies, her unspent pension will now be taxed because of this Government, and the house that she spent her life paying for will be taxed. It beggars belief that Labour MPs looked at those figures, recognised how they are strangling our country, and concluded that they would rebel against the modest reforms proposed by the last Prime Minister. Indeed, the Labour party would rather remove a sitting Prime Minister than attempt to create a fairer system.

I ask Members to imagine that they are farmers in the communities that I serve. You are up at the crack of dawn and working until very, very late. It is relentless every day. Your profit margins are the lowest of almost any industry, but you persevere, because you value your land and your family’s connection to it, and you take pride in feeding our country. But Labour hits you with increased road taxes on double-cab pick-up trucks, increased employer NICs and minimum wage, taxes on fertilisers, the cruel family farm tax, and now a levy on the land itself when it passes from parent to child.

Lincolnshire and Rutland are the breadbasket and agricultural heartland of Britain. We are proud of what we do to feed this country, so it is offensive when the Nature Minister says that traditional rural Britain—the pubs, ale and loyal dogs that we adore—is a far-right fantasy that never really existed. I invite her and any Labour MP to come and visit Rutland, Stamford and the Harborough and South Kesteven villages, because we are not a fantasy; we are communities who deserve respect—although if I came from her constituency, I would also consider it a fantasy to see the type of idyllic life that we lead in our villages. We will never apologise for valuing the traditions and way of life that make our rural communities so special.

The Nature Minister was wrong when she claimed that rural pubs “never really existed”. She would, however, have been correct if she said that she and her Government are doing their best to wipe them out of existence. Under Labour’s plans, the Bertie Arms in Uffington faces a 2,000% increase in business rates by 2029. The hard-working landlady has dismissed the minor relief that came as tokenistic and says that it will make no difference because of Labour’s other tax hikes.

[Daisy Cooper]

I agree with the hon. Lady. The business rates increases under this Government are very damaging, but she will remember that the previous Government also pledged to fundamentally reform business rates and completely failed to do so. Does she understand why businesses across the country are fed up with both the Conservatives and Labour on this point?

[Alicia Kearns]

I am grateful to have the chance to state our record. We cut employee national insurance twice, taking 9 million workers out of it. We raised the national insurance threshold. We abolished the lifetime allowance. We cut fuel duty. We had business rates relief for hospitality and pubs. We did all those things to support our pubs and businesses.

The Prime Minister told the voters of Makerfield that the family farm tax “needs looking at again”, so I wonder whether Members in this Chamber who have given it their full-throated support this week will regret their words in a few weeks’ time. Let us see. Since he took office, Members on his Front Bench have excitedly chattered about reindustrialisation, as if the word on its own builds a factory; it does not, and neither does taxing a business at the moment that it passes to the next generation. From April, the family firms in my communities, such as Rutland Plastics, Coles Plant Centre, Arnold Wills, CS Ellis and Rutland Garden Village, and independent family shops on my high street, like Harrison & Dunn and Walkers Bookshops, will all face the same death tax as our wonderful farmers, like Percy Gilman.

Business property relief existed for a reason—so that a company need never be broken up to pay the Treasury. Those same businesses are not just economic powerhouses in communities like mine, but social powerhouses, as Philippa Wills said to me this morning. They are rooted in our communities and make decisions for the longer term, because they care about what happens to our people, communities and towns. The Government do not care about that; they have broken the social contract between businesses and our young people and those in part-time work, because they have made it so much harder to hire them. Who loses out the most, apart from young people? Women, because it is women who rely on part-time employment when raising their children who are now unable to pick up additional work. That is the true cost of this tax: not the £15 billion a year that the Government forecast it will raise by 2030, but the businesses never started, the capital that leaves, and the women and young people left without jobs.

Tax cuts must be paid for, which is why we have put spending cuts first, but let us be clear. If we tax a family firm at death, the founder sells early, moves abroad or never builds at all. If we tax a farm, the fields go to a solar developer, or they are built on and we become reliant on foreign imports. If we tax the people who work and pay the people who do not, we should not be surprised when fewer people work. We want people to work—we want them to be able to celebrate and benefit from a lifetime of toil and hard work. That is human nature, and nothing to be ashamed of.

We have a Government who are asking who they can tax, and an Opposition asking how much more people can keep. Labour’s assault on farms and businesses, its insistence that rural life does not exist, and its addiction to spending will destroy this country. We want people to succeed, and we hold our rural way of life close to our hearts. That is why everyone must support this motion today.

18:05

[Gregory Stafford (Farnham and Bordon) (Con)]

While I am following a vast number of extraordinarily excellent speeches from Opposition Members, unfortunately I am going to have to start with some of the really quite stunning comments from Government Members—comments that clearly demonstrate that the Government have absolutely no clue about what creates wealth in this country, what drives growth in our economy, and what real people who are working hard have to face in Britain every single day. There was no greater example of this than the comments of the hon. Member for Macclesfield (Tim Roca), who I notice has just scuttled out of the Chamber. He had the audacity to misquote Churchill and to call the people who are working hard in this country—the people who are grafting hard—the “idle rich”. What a disgraceful thing to say to those people who are building a business! What a disgraceful thing to say to the farmers who are up at the crack of dawn trying to make their businesses work! He should come back to the Chamber and apologise to them, because they deserve an apology.

I prefer another Churchill quote. He said:

“Socialism is the philosophy of failure, the creed of ignorance, and the gospel of envy”,

and we have seen a lot of failure, ignorance and envy from Government Members today. The real people who are going to be hit by these taxes are not the idle rich who the hon. Member for Macclesfield mentioned; they are the grafters who put in—people like my father’s family, who ran a business for over a century in Hazlemere. They worked hard, took risks, saved, and stood on their own two feet. These are the sort of people who this Labour Government have decided they want to tax to the hilt—to tax out of existence.

For decades, business property relief meant that a family firm could pass to the next generation without a bill. This Government ended that. Relief was capped at £1 million in 2024. Only after a backlash did it rise to £2.5 million of combined business and agricultural property relief. As my hon. Friend the Member for Broadland and Fakenham (Jerome Mayhew) said, though, businesses are not a bank account. Cash and capital are two different things. A business’s value is in its premises, its machinery, its stock and its good will, not necessarily in its cash, so the people who inherit it must find money from the very businesses that employ their staff and extend growth.

[Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)]

Does my hon. Friend fear, like I do, that we will see so many more family firms being sold, and often sold to foreign buyers—people who have no interest in investing for the long term and investing in local communities?

[Gregory Stafford]

My right hon. Friend is absolutely right. In my constituency—and, I am sure, in his constituency and across the country—small family businesses are having to make really tough decisions about what they are going to do. He is right that they will often go to foreign firms, because those firms will not be hit by this level of taxes. Hitting British businesses so that they will be sold to foreign ones is an odd focus for this Labour Government. It is extraordinary, and if the Government do not see that, they really must think again.

Think of an owner in their 60s deciding whether to buy a new machine or take on another apprentice. Now they must first ask, “What will this do to my tax bill that my children will inherit?”—a tax that, as my right hon. Friend the Member for Stone, Great Wyrley and Penkridge (Sir Gavin Williamson) said, makes owners think twice before investing and building growth.

[Dr Johnson]

My husband is a farmer and runs businesses. He feels a huge responsibility not just in building his business, but to the people he employs. Those people will be affected if the business does not grow or does not invest because he is worried about this tax.

[Gregory Stafford]

My hon. Friend is absolutely right, and she neatly brings me on to some comments about family farms. She is right: it is not just the people who are running these businesses or those people who might inherit them who will end up losing out, but the employees of those businesses too. That is why we are not getting the growth that Labour claims it wants.

With family farms such as Luff’s in Headley, the land, tractors, buildings and a lifetime of labour are passed from generation to generation. The National Farmers Union has calculated that a typical cereals farm making roughly £34,000 a year would face 10 annual instalments of £53,000 a year at the original £1 million threshold. Even at the new threshold, payments of £33,000 a year would swallow nearly all the profit. Essentially, in order to pay, a farmer will have to sell the very fields that earn the living.

The Royal Agricultural Benevolent Institution found that more than a third of farmers are probably or possibly depressed. The Farming Community Network, which supports more than 10,000 people, says that its helpline has been taking calls linked to the upcoming Budget for weeks. As my hon. Friend the Member for Keighley and Ilkley (Robbie Moore) said, this tax has led to suicides. That is a disgrace, and the Government should recognise that and do everything they can to repair the damage that they have done emotionally and economically to our farms. It was only when Ministers were challenged by the shadow Environment Secretary, my right hon. Friend the Member for Louth and Horncastle (Victoria Atkins), that they raised that threshold. If it was right to raise the threshold then, because it was the wrong threshold, can the Government not look at it again and remove it?

Moving on briefly to the general inheritance tax points, the nil rate band has been at £325,000 since 2009. Labour has now said that it will freeze it until April 2031. Had that band risen with inflation, it would be at more than half a million pounds today. To dispel the myth that has been put forward by the Government that inheritance tax affects only a small number of people, the OBR expects one in 10 estates to pay by the end of the decade. The Institute for Fiscal Studies puts that figure at one in six. It will not hit just a small number of people.

A married couple can pass on up to £1 million if their home goes to their children. That might sound generous, but once we add a family home in my constituency to a lifetime of savings and, from April 2027, their pension pots, it is not a significant amount of money in the grand scheme of things. That is especially important when that pension relief is what we on all sides of this House were telling people to do. We were telling people to save for their future, and the reward for their saving is the Government taking more of it in tax. Households that never thought of themselves as wealthy are being pulled in. Under Labour, aspirational families are hit on the way in and unfortunately they are hit on the way out. As Members have said, the shopkeeper will sell their business to fund retirement and the farmer will sell the fields to try to keep just a small measure of their farm.

The Minister on the Treasury Bench must take this message back to the Chancellor: rule out these changes and make things better for our local areas. As the Conservative Opposition, we present an alternative. We will abolish tax on the family home, and we will do that by slashing the welfare bill by £7 billion. It is the first step, and the shadow Chancellor and the Leader of the Opposition have outlined their ambition to go further.

It comes down to a fundamental point. On the one side, we have a Government who see a lifetime of savings and a business built over generations as just another tax opportunity. On the other, we have an Opposition who believe that those savings belong to the family who earned them—not the grifters, not the idle rich, but the grafters. They built this country, and unlike Labour, a Conservative Government will let them keep those savings.

[Several hon. Members rose—]

[Madam Deputy Speaker (Judith Cummins)]

There is an immediate five-minute time limit.

18:09

[Rebecca Smith (South West Devon) (Con)]

I will follow on from my hon. Friend the Member for Farnham and Bordon (Gregory Stafford), who set out a huge amount of what I will talk about, not least about the constant referral to the wealthy that we have heard in this debate. Frankly, it is offensive to any person out there who is working and, in many cases, not earning very much money, but saving a lot of it and working tirelessly to be able to buy a property, to invest in a business and to do the right thing.

Frankly, the one thing that I will take away from this debate is the massive generalisation that anyone we represent is somehow wealthy, and anyone Labour Members represent is somehow not. It is a complete fallacy, and it shows a complete disdain for working people. Indeed, we heard the hon. Member for Hornsey and Friern Barnet (Catherine West) imply that anyone who was not relying solely on the state pension was earning a lot, which is preposterous.

Buying a home is the biggest financial commitment that many families will ever make. It involves decades of saving, mortgage repayments and sacrifices along the way. The Conservative pledge to abolish inheritance tax on the family home would ensure that families were not penalised for passing on the home that they had worked so hard to own, often at the expense of doing other things. We know full well that people on benefits are able to get all sorts of discounts. It is the hard-working families across the country who do not go to theme parks at discounted rates, because they are paying a mortgage or, indeed, saving for one in the first place.

We will also raise the general inheritance tax allowance to £500,000 per person, or £1 million for a married couple. Crucially, this increased allowance will also benefit those who are unmarried or do not have children. Currently, a single person has an inheritance tax limit of only £325,000, which I think is completely wrong. There are many single people out there who work hard, and who sometimes have money that they have themselves inherited and on which they have also paid tax at multiple points. I hear from single constituents on my patch who are just so frustrated at being expected, time and again, to pay tax in order to pay for everyone else. Our proposal would give them greater freedom to leave more of what they have earned to the people who matter most to them, whether that person is a sibling, a niece or nephew, or another loved one.

As I have said, this is not about the very wealthy who already use trusts and other mechanisms to protect their assets. This is about helping normal families who have seen the price of their family home shoot up over the years, tipping them over the threshold for inheritance tax through no fault of their own. Indeed, in my own Conservative constituency—the so-called wealthy area South West Devon—the Plymouth median salary is £36,500 pounds. Plymouth is generally seen as being quite poor, but in the West Devon and South Hams part of my constituency the median salary is between £26,500 and £30,000. These are hardly wealthy people. As my hon. Friend the Member for Harborough, Oadby and Wigston (Neil O’Brien) has rightly said, inheritance tax has

“become a tax for normal people who live on new build estates, not fancy people who have estates.”

Just 2.7% of homes were faced with an inheritance tax bill in 2009-10, but that could rise to 8.2% in 2029-30, according to research by Oxford Economics.

This issue is particularly relevant in the South Hams part of my constituency, where the average home costs £355,000, the third highest figure in the south-west. In Wembury, Brixton and Newton Ferrers, the median property sold for more than £360,000 in the last year, rising to more than £520,000 for detached homes. In Ivybridge, a property was recently sold for almost £420,000. Many of these properties were bought decades ago for considerably less, yet the basic inheritance tax threshold has remained frozen. Others have already mentioned the pension increase whereby pension funds will be included in inheritance tax calculations.

Scrapping inheritance tax on family homes is about strengthening the social contract, which is, in the great words of Edmund Burke, the indivisible bond between those who came before us, those who are here today, and those who will follow. Conservatives want to protect that partnership. We are backing parents who save responsibly and want their children and grandchildren to benefit from the sacrifices that they have made.

[Noah Law]

The hon. Lady has referred to the indivisible bond between families. Does she not agree that that bond must also apply to the community and the public more generally, from generation to generation?

[Rebecca Smith]

I think that is called general taxation, and these people have paid that throughout their working lives. Why are we now targeting them at the point at which they die, or indeed inherit money? I just do not think that is a workable opinion, and I deeply disagree.

The Conservatives want to protect the social contract. We are backing parents who have saved responsibly, and who want their children and grandchildren to benefit from the sacrifices they have made. As we have heard, that stands in stark contrast to Labour, which is widening the inheritance tax net ever further by sucking in family farms, pensions and family businesses. As Conservatives, we believe that hard work should be rewarded. Families who have done the right thing should be able to pass something on to the next generation.

18:19

[Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)]

One of the liberating elements of speaking at this stage of the debate is that many excellent and eminently sensible points have already been made, so I can do an assorted highlights of the best bits that have come out of it. But it has made me reflect that perhaps if we all took a stroll down to Clapham, got on the omnibus, and spoke to the man and woman who had boarded it, I suspect that their vision of this country would not be the same as the purported utopia that we have heard from those on the Government Benches today. I suspect that if we asked people what they want to see from the tax system, they would want to see something that is not unnecessarily detrimental to a single group and not punitive in its intent. Fundamentally, it should not be something that disincentivises those who have done the right thing.

Looking at the tax landscape in this country, it has become far too complicated and burdensome—we are now at more than 20,000 pages of tax codes, whereas in 1997 there were fewer than 5,000.

[Dr Arthur]

I have never been on the Clapham omnibus, but I expect that there may well be people in low-paid jobs on that who are struggling with the cost of living crisis. When the hon. Gentleman speaks to people on the omnibus, do they tell him that they want people who inherit properties worth half a million pounds or more to pay less tax? Is that the answer to the problems facing people on the Clapham omnibus? Is that what they are saying?

[Dr Shastri-Hurst]

I recommend that the hon. Gentleman get on the Clapham omnibus, because it is a great opportunity to have his finger on the pulse of the British public. I think most will say that they want a fair system so that when they have worked, strived and built up a legacy for the next generation, they have something to hand down, because that is the most loving thing that people can do. I have not built up a family business or run a family farm, and I cannot imagine the stresses and strains that that involves, but these individuals understandably want to hand their businesses down to the next generation. We need them to do so, because if we do not have the farmers of tomorrow and the generation after that, we will not have on our tables the food that we enjoy today and that we hope our children will enjoy in years to come.

[Daisy Cooper]

Was the hon. Gentleman sticking up for farmers when his party negotiated trade deals with Australia and New Zealand, which undermined farmers in the UK?

[Dr Shastri-Hurst]

I fundamentally do not agree with the hon. Lady’s point, and I suspect that farmers in this country will be wondering why her party has not stood up for farmers over fertilisers today.

[Sir Ashley Fox]

Perhaps it is a leadership bid.

[Dr Shastri-Hurst]

From a sedentary position, my hon. Friend makes a very valid point.

Let us not kid ourselves: this debate has been framed as though we have some sort of Dickensian model of the idle rich and then the poor who are propping up the state. That is not the truth. The reality is that, as my hon. Friends have said, those who are very rich will inevitably put their affairs into trusts and escape inheritance tax. We are talking about those who are just about managing: those who are trying to earn a crust and to support their families. It is the middle class who get caught—those who go out to work every day to provide for their families.

The average property price in my constituency of Solihull West and Shirley is now £345,000. Such properties are owned not by the toffs who are often derided by those on the Labour Benches, but by people who get up every morning and often work more than one job to provide for their families. People have tripped into paying inheritance tax by virtue of property prices being pushed up and the threshold remaining the same. The reality is that this tax is not operating as it was intended. It is not capturing the individuals it was intended to capture; it is capturing the ordinary man and woman. The fact that the Government have frozen the threshold until 2031—a threshold that was first put in place in 2009—means that, whereas only 4% of deaths were captured by this particular tax between 2001 and 2024, 9.5% of deaths will be captured by 2030.

When we compare ourselves with other OECD nations, we see that 18 of those 38 nations do not pay any inheritance tax at all—Australia, Canada and New Zealand among them—and none of the remaining 20 has it at such a punitive rate as we have here. The purpose of a tax system is of course to help fund our public services, but it also has to be fair, sensible and aspirational in its intent. It must ensure that those who strive and work hard are not penalised as a consequence, and I am afraid that this Government’s direction of travel is simply taking out those that do work hard—our family farms, our family businesses and others—by the knee.

18:25

[Lewis Cocking (Broxbourne) (Con)]

I want to support the family home, family farms and small businesses right across the United Kingdom, and I back this motion. It is a fundamental Conservative principle that, as Margaret Thatcher once said, “freedom flourishes” when people can rely on the security of owning their own home. In the same speech, she made a very important point relevant to this debate when she said that a home is more than a financial asset, as it is a “stake in the future” and something to be passed on to the next generation. That is why inheritance tax matters.

As we have heard, when someone dies, 40% of their money and property is taken by the taxman, if the total value exceeds £325,000. By raising the threshold, hon. Members on all sides of this House accused us of cutting taxes for the wealthiest in our society. I can tell them that the constituents I represent in Broxbourne are certainly not some of the wealthiest in our society. In fact, there are parts of my constituency that rank among the most deprived in the UK. Despite that, average house prices across Broxbourne are £433,000. Houses in my constituency that are just over the threshold include a two-bedroom maisonette in Cheshunt and a two-bedroom bungalow in Hoddesdon. Those properties are not mansions. Homeowners in Broxbourne have worked hard to live in those places, and it is not their fault that property values have risen by more than 10% in the last five years. On that trend, more and more ordinary families are being pulled into paying inheritance tax.

Labour is making this worse by freezing the threshold until 2031. By then, one in six families will face paying an inheritance tax bill. I believe this is wrong. As my hon. Friend the shadow Chancellor set out, we would completely abolish inheritance tax on the family home and raise the threshold to £1 million for a couple. We have a clear plan.

[Markus Campbell-Savours (Penrith and Solway) (Lab)]

I wonder—I have not read this anywhere—is there a cap on the value of the family home that will be exempt? For example, would the penthouse at One Hyde Park, which sold for about £175 million, be completely exempt?

[Lewis Cocking]

If the hon. Member had been listening to my speech, he would know that this is not people’s fault. If someone works hard and buys a family home, they have no idea what the value of that family home is going to be when they die. That is why we are exempting the family home from inheritance tax.

[Graham Stuart (Beverley and Holderness) (Con)]

My hon. Friend will remember that the centre-left Social Democratic party in Sweden abolished inheritance tax years ago, because it had gone down the route of this envy-filled, left-wing, socialist approach, and found that it was counterproductive, led to complexity and reduced wealth in the country. Afterwards, business thrived, and even the Communist party in Sweden, in the face of the facts 20 years ago, could see how wrong it was. It is a shame that the modern Labour party does not understand that.

[Lewis Cocking]

My right hon. Friend is absolutely right. This is a tax on aspiration.

[Markus Campbell-Savours]

Will the hon. Gentleman give way?

[Dr Arthur]

Will the hon. Gentleman give way?

[Lewis Cocking]

No, I will not give way. I have taken two interventions, and a number of Members want to speak.

If we want to unlock the next generation of entrepreneurs and back the people who give their blood, sweat and tears when they go out to work every day to make our country great and what it is today, this is what we need to do, and we have a clear plan to pay for it. We will cut Government spending by £71 billion, including by cutting overseas aid to £1 billion a year. We would reduce welfare spending by £36 billion and support young people into work, rather than a life on benefits. Alongside our pledges to scrap the family farm tax and scrap the family business tax, these are bold changes that will get our economy growing.

Enabling people to keep and pass on more of their own money is how we encourage people to invest, take risks and create new opportunities. Inheritance tax is not the only example. I regularly speak to constituents who feel that they are better off financially to refuse a promotion or more hours at work, because it does not make sense for them to work harder and get less. I have spoken to self-employed tradespeople who turn down work because they are too close to the VAT threshold. That just cannot be right. I speak to businesses and to people who work. It is absolutely crazy that they turn down employment and business because they will be worse off, paying more taxes under this Labour Government.

Until we shift the incentives in our economy—incentives that make a life on benefits more attractive than getting a job and that will put off businesses from creating new jobs—we will never improve the situation our country faces. Labour has a choice at the Budget on 28 October: they can copy the clear plan we have set out to make savings and cut welfare, or they can continue down the same road. Sadly, I just think they are not listening.

[Madam Deputy Speaker (Judith Cummins)]

With an immediate four-minute time limit, I call Dr Ben Spencer.

18:30

[Dr Ben Spencer (Runnymede and Weybridge) (Con)]

This is, without doubt, one of the most important debates we can have, because it goes to the heart of a simple question: when someone works hard, saves diligently, builds a business, a family farm or buys a family home and wants to plan for their children’s future, why are they penalised by this Government? Why is their success targeted? And when will fairness be restored, so that those who work hard to achieve success are rewarded, not attacked and subject to the politics of envy? The answer, I hope, will be after the next election.

Labour’s answer is always the same. Its instinct is to ask, “Who can we tax?” That is not me saying that, but the Work and Pensions Secretary, who admitted that every conversation he had had with Labour Back-Bench MPs was them asking who they can tax to pay for increased welfare spending. It is constituencies like Runnymede and Weybridge that are firmly in their sights. I can picture them now, sitting high in their Whitehall ivory tower, looking for new ways to tax and spend. Surrey and the south-west comes into their sights: the successful businesses, the skilled workforce and the resulting high house prices. Rather than looking to replicate that growth and success, they simply look at their spreadsheet. They see a house price. They see something they think they can tax.

But people’s assets are not lottery winnings. They are the product of decades of hard work, discipline and sacrifice. To tax wealth and savings in this way is not fairness; it is a penalty on individual responsibility. It sends a damaging message that those who work hard, build a business, and save for their and their family’s future will be punished for doing so.

I believe in fairness, not redistribution. At the next election, the country will be offered a clear choice: a Labour Government whose priorities put welfare spending above our country’s defence and whose commitment to raising taxation will bankrupt our children’s future; or a Conservative party that believes aspiration should be rewarded, not targeted, that savings belong to the individual not the state, and that planning for the future should be encouraged, not penalised. Whether it is an increase in taxation on savings and investments, increased taxation on businesses, the mansion tax or the family farm tax, Labour’s approach is to tax success. Labour is asset-stripping our country, and targeting the very people and businesses that create growth, prosperity and opportunity.

At the next general election, the choice could not be clearer: a Labour party, facilitated by the Liberal Democrats, that sees taxpayers as targets; or a Conservative party that backs enterprise and rewards hard work, and stands up for those who want to build a better future for their children. People’s money is their own. It is not the Government’s money that Labour has not taxed yet.

18:34

[Sir Ashley Fox (Bridgwater) (Con)]

If we want our children to have a better life than us, to enjoy a better standard of living than ourselves, to enjoy better healthcare and to live in a better environment, then it is necessary to grow our economy. Conservatives understand that Governments do not create growth. A wise Government will try to create the conditions for growth and then stand back and allow individuals, families, partnerships and businesses to do their best to work hard, provide goods and services that people want to buy, and thus improve the world we live in.

Creating wealth is hard work. I do not suppose that many Government Members are aware of that, because so few of them have ever worked in the private sector. It is quite remarkable that the shadow Chancellor has more experience in the private sector—23 years, I believe—than the whole of the Cabinet put together. This Government often talk about supporting business, yet time and again they do the opposite: higher national insurance charges that make it more expensive to employ people; 350 pages of the un-Employment Rights Act to further drive up the cost of labour; plans for a tourist tax—eagerly embraced by the Liberal Democrats—that will place additional burdens on a tourism sector made up largely of family businesses.

Instead of helping local enterprises flourish, this Government’s first instinct is to ask, “How much more can we tax them?” We know that because the Work and Pensions Secretary told us that his colleagues are always asking him to pay more benefits to more people. Conservatives understand that the drive, innovation and hard work of family farms and businesses do more to create jobs, train apprentices and sustain communities than Government ever could.

My constituency in Bridgwater sits in the heart of rural Somerset; ours is overwhelmingly a small business economy. More than 99% of the businesses in Somerset employ fewer than 250 employees. Those businesses are rooted in the places they serve; they support local sports teams, support village events and provide opportunities for local people. For those of us representing rural communities, small-scale family businesses underpin our local economies. They grow our food, make up our high streets, support tourism and more. That makes the fact that the Government feel no remorse in penalising their hard work, in the name of subsidising those who avoid it, even more depressing.

Conservatives are on the side of those who work hard, save, invest, and create jobs and wealth. We will reward those who do the right thing. That is why we will abolish inheritance tax on family homes, farms and businesses. We will restore fairness to a system that has neglected those who play by the rules. Because when a business passes from one generation to the next, we should help it grow and continue a legacy, not force it to sell assets to pay a tax bill.

[Markus Campbell-Savours]

The motion says “family homes”; it does not specifically say “family farms or businesses”. The hon. Gentleman raises family businesses, so how would someone define a family business for the purposes of legislation?

[Sir Ashley Fox]

If the hon. Gentleman reads it, the motion does specifically refer to family businesses. It is about agricultural property relief and business property relief—they are agricultural and business assets that form part of an estate. We will reverse Labour’s family farm and family business taxes.

The Conservatives believe that allowing families to retain and reinvest their assets supports growth, encourages long-term planning, and strengthens local communities. It will actively put money in pockets, rather than take out more. If we want a prosperous Britain, we must back the people who have invested their lives in the community, building businesses, farms and homes that can be passed to the next generation.

18:39

[Victoria Atkins (Louth and Horncastle) (Con)]

As I have listened to this debate today, I too have been reminded of the chilling words describing Labour MPs by their own Work and Pensions Secretary:

“Every meeting I have is ‘who can we tax in order to pay benefits to others’.”

This debate today once again sets out the battle of ideas between the welfare party and the Conservatives. This is the eighth vote the Conservatives have forced on the family farm and family business taxes since the disastrous first Labour Budget of broken promises. In that time, we have seen off a Prime Minister, a Chancellor and two DEFRA Secretaries of State, and discovered that one DEFRA Minister views black Labradors, warm ale and pubs as a far-right fantasy.

We have also shown the power of rural and coastal communities, because through their protests here and across the country, the heartrending stories we have heard from families of the terrible discussions and decisions they have had to make in order to avoid this vindictive death tax, as set out eloquently by my hon. Friend the Member for Keighley and Ilkley (Robbie Moore), and the pressure we have exerted here in Westminster, we forced the Government into one of their most humiliating U-turns. There have been many, but this one was humiliating: their partial U-turn on these vindictive taxes.

We are forcing another vote today, ahead of Budget, because we know the damage that these vindictive taxes continue to cause to the rural economy. We know that this Government have overseen the highest number of farms closing on record in a year—shameful. The Financial Secretary did not admit that.

We also know, as my hon. Friend the Member for Dumfries and Galloway (John Cooper) has set out, that the 10-year payment scheme that the Government keep talking about applies only if the estate is able to make the first payment within six months of the death, probate having been settled. Does anyone know of such a scenario in their own constituencies? This means that the 10-year payment plan is nothing but warm words from those on the Treasury Bench. It is an absolutely impossible condition to fulfil for the overwhelming majority of family farms and businesses that will be hit by these taxes.

The Financial Secretary also did not acknowledge that investment in rural economies has dropped off a cliff. [Interruption.] He is not listening, but he might want to do so. In a recent Country Land and Business Association survey, nearly nine in 10 rural family businesses stated that they have paused investment; in fact, 85% say that the current threshold of which the Financial Secretary is so proud is not enough to cover the value of their business, given the cost of machinery and livestock and the other business costs imposed by this Government. Of course, two pubs are also closing every day under this Government. In short, rural communities cannot afford Labour.

Despite their protestations over the past two years, every single Labour MP has voted for the family farm tax and the family business tax multiple times; only one had the courage to vote for his constituents. There is one other who did not: the Prime Minister, because he was not in Parliament at the time of the other votes. He knows that Labour has a rural problem, though. He has said that he recognises that the Government have a

“long way to go to build back trust”

with the farming community across the country.

It is therefore a shame that today of all days, the Prime Minister has put another tax on family farms—the fertiliser tax. And every Labour MP voted for it. Again, the Work and Pensions Secretary was right. This is another hammer blow to British farming, only weeks after the shambolic handling of the sustainable farming incentive, the collapse of the Government’s environmental policy and the Prime Minister’s botched response on how his deal with the EU will, in fact, favour foreign farmers over British farmers and hand control over our food laws to the European Union.

In the battle of ideas today, we have heard some superb speeches from the Conservatives Benches. My hon. Friend the Member for Central Suffolk and North Ipswich (Patrick Spencer) painted a picture of the many local pubs and black Labradors in his Suffolk constituency—the DEFRA Minister may wish to take note. My hon. Friend the Member for Bromley and Biggin Hill (Peter Fortune) set out sound economic analysis, even if he admitted that his cricketing skills are not quite what they should be. My hon. Friend the Member for Mid Bedfordshire (Blake Stephenson) set out a description of the Labour party that I think hits home almost as much as the words of the Work and Pension Secretary: Labour is the party that taxes aspiration. This vote tonight is the proof of that.

My hon. Friend the Member for Bridgwater (Sir Ashley Fox) made an excellent intervention about the fact that the tax focuses only on British family farms and family businesses and does not affect foreign owners of farmland. Perhaps the Minister will explain how it is fair that foreign farmers should not pay this tax but British farmers should do so.

We heard other excellent speeches, including by my hon. Friends the Members for South West Hertfordshire (Mr Mohindra), for Keighley and Ilkley (Robbie Moore), for Rutland and Stamford (Alicia Kearns), for Farnham and Bordon (Gregory Stafford), for South West Devon (Rebecca Smith), for Solihull West and Shirley (Dr Shastri-Hurst), for Broxbourne (Lewis Cocking), and for Runnymede and Weybridge (Dr Spencer), who described Labour’s approach to taxation as “asset stripping our country”.

Let me turn to some of the speeches from the Labour Benches. We heard from the hon. Member for Welwyn Hatfield (Andrew Lewin), who by the way voted for the family farm and family business tax seven times—tonight will be an eighth—and the hon. Member for Macclesfield (Tim Roca), who only voted for it three times. I am sure his farmers are so happy about that. Both of them asked, “What can be done to help those who are not yet on the housing ladder?” I am delighted to tell them that the Conservative party has the answer. We will be scrapping—

[Tim Roca]

Will the shadow Minister give way?

[Victoria Atkins]

No, if the hon. Gentleman sits down—[Interruption.] I have some words about his AI-generated speech in a moment.

The Conservatives have the answer: we will scrap stamp duty on primary residences. That is how we help people back on the housing ladder. The hon. Member for Macclesfield also described his own constituents who want to pass on their family homes or family businesses to their children as the “idle rich”. I hope that was just the AI.

[Tim Roca]

Will the shadow Minister give way?

[Victoria Atkins]

I will, and I genuinely hope that he will explain his “idle rich” comment. Go on.

[Tim Roca]

I was quoting Churchill, in particular from a lecture given by Professor Daunton at Gresham College in 2021, when he directly quoted Churchill when he was Chancellor of the Exchequer as a Conservative.

[Victoria Atkins]

That will not plough any furrows with the farmers in the hon. Gentleman’s constituency whom he has just described as the “idle rich”. What is more, he has got his figures wrong. He keeps throwing these figures around, but in fact that Tax Policy Associates think-tank that so many Labour colleagues seem to rely on has said that by the end of this decade one in six families will pay inheritance tax—many of them in his constituency, which I know well.

The hon. Member for St Austell and Newquay (Noah Law) voted for the family farm and family business tax only a mere six times—he missed one of them—but he had the bright idea that farmers should get life insurance and planning advice. How on earth are farmers in his constituency on an income of around £20,000 a year going to afford that? It is yet more business taxes.

We also heard a reliance on Dan Neidle and his organisation Tax Policy Associates. I merely make the point, so that it is open and transparent, that Dan Neidle is a senior member of the Labour party and served for three years on its disciplinary committee.

The Conservatives are setting out the tough decisions to cut spending and help hard-working families up and down the country invest in their businesses and homes, ready to hand over to their families. People who have worked hard, paid their income tax, lived within their means and saved have not done so in order for the current Labour Chancellor to tax that all over again. They have done so because they have a deep desire to leave something to help the next generation prosper when they are no longer here.

[Dr Arthur]

Where domestic properties are concerned, of course more people are getting drawn into paying the tax because the thresholds have been frozen. I am sure that the Minister who came to the House in 2022 to say that the rates at that time were to be frozen until 2028 is currently at the Opposition’s Dispatch Box.

[Victoria Atkins]

I am so glad that the hon. Gentleman has brought that up, because not only did his first Chancellor extend the freeze, but she dragged pensioners into it. It is literally the worst of all words.

Let me reiterate the point I just made, because it is an important one. Under this Government, one in six families will be liable to pay inheritance tax by 2030. That means many more constituents being liable to pay the tax. The hon. Member for St Austell and Newquay said that our idea to axe inheritance tax on the family home was bonkers. I hate to break it to him, but Austria, Portugal, Sweden, Norway, Australia, Canada and New Zealand have all done the same.

The reason why we are doing it, and why this is so important, is that we know it is families who build this country; it is families who put down roots. They build a home, they run a farm or they start a business, and they bring prosperity and vibrancy to our villages and our towns. So I make the promise that the Conservatives will axe these taxes if Labour does not does so at the Budget, because only the Conservatives are the party of the family home, the family business and the family farm, and only the Conservatives will get Britain working again.

18:50

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

I thank hon. Members from both sides of the House for their contributions throughout the debate. Some of them definitely had the volume to enable all of us in the House to hear them. I thank the right hon. Member for Louth and Horncastle (Victoria Atkins), who is herself a former Treasury Minister, for her contributions. Given her experience, having spent some time working in the Treasury, we may have expected at least a hint of self-awareness from Opposition Front-Bench Members. The previous Government left Britain with crumbling public services, broken public finances and the worst Parliament on record for living standards.

Today, the Conservatives have come to the House demanding more unfunded tax cuts, worth up to £11 billion a year, without any clear plan whatsoever for how they would pay for them other than a vague commitment in the motion to cutting public spending. We all know what that means: it means cutting spending on the NHS, cutting spending on our schools and cutting spending on our police. That is what they did when they had 14 years in charge. We know that if they ever get on to the Government Benches again, their first port of call will be taking away money from our public services, which constituents up and down the country rely on.

The Conservatives’ plans would do nothing to help ordinary families with the cost of living and would benefit the very wealthiest estates. I do not think it is the right priority to give a £3.74 million tax cut to someone living in a £10 million mansion, but it is clear that their priority is to give massive tax cuts to people in £10 million homes. We will not take that decision on the Labour side of the House.

Over and again, the Conservative party sets out fantasy spending cuts that nobody believes it will deliver, and which clearly demonstrate its inability to add up or even to watch what the Government are doing. For example, some Opposition Members talked about changes to welfare spending and how the Conservatives plan to bring back face-to-face assessments. Yes, that would be a very good idea, and that is why the Government are doing that after Conservative Members scrapped face-to-face assessments during the pandemic and did not get round to reinstating them. We are bringing them back to ensure that we can move people off welfare and into work, because that is a Labour value and we support work.

In stark contrast to the Conservative party, it is because of the action that the Government have taken since coming to office that our economy is demonstrating strong resilience in the face of global challenges. Earlier this week, the IMF upgraded our forecast of growth for this year. We were the fastest growing economy in the G7 in the first half of the year. The IMF has also projected that we will have the lowest deficit in the G7 by 2031, and we are on track to cut the deficit by more than any other G7 economy between 2025 and 2030. From 2029, we will have the lowest borrowing in the G7.

[Robbie Moore]

Does the Minister agree with the Prime Minister’s long-term mentor Lord Blunkett, who last month at the Countryside Alliance’s rural reset conference said that the Prime Minister should use his time in the premiership to change the inheritance tax on farms because that was a mistake that the Labour party had made?

[Dan Tomlinson]

The Government’s policy on inheritance tax has been set out today. We will not be voting for the motion before us today because we do not believe that slashing public services and public spending for people living in £10 million mansions is the right priority. That is the Conservatives’ choice; it is not ours.

This Government will deliver good growth in every postcode and provide breathing space for families and businesses. Underneath all that, we will continue to focus on fiscal discipline. The Prime Minister and the Chancellor have been clear that we will meet our fiscal rules at the Budget later this month with a buffer against uncertainty, and we will continue to control borrowing so we can bring down inflation and reduce the long-term pressures on our public finances. That is the right thing to do, because there is nothing progressive about a Government spending £1 in every £10 on debt interest rather than on the priorities of working people.

[Alicia Kearns]

The Minister has just touched on what the Prime Minister has said. The Prime Minister also told the people of Makerfield that he needed to look again at the family farm tax. Why are the Labour Benches so full of MPs this evening saying that we are absolutely not moving on it when the Prime Minister made that very clear promise during the by-election? Who are we to believe: the Prime Minister then or the Prime Minister now?

[Dan Tomlinson]

We will vote against the Opposition motion this evening. The responsible approach that this Government are taking stands in stark—

[Markus Campbell-Savours]

I ask the Minister to please not let the Opposition distract us from what can be done. The SFI debacle the other day demonstrated that farmers are struggling. There is an opportunity to do the right thing at the Budget. He must not let the party that wants to give tax benefits to the owners of £175 million penthouses distract us. There is something in what the Conservatives have written about farm taxes, but it is very different from the wider issue they have raised in this daft motion.

[Dan Tomlinson]

I thank my hon. Friend for his continued advocacy for the farmers in his constituency and across the country. Labour Members engaged constructively with me, the then DEFRA Minister and the then Prime Minister on the issue of the threshold in the inheritance tax changes for farms and businesses, and we made a change late last year to reflect the conversations and concerns on the Government Benches and the representations received then.

On the changes for residential property, it is worth noting before the House that independent analysis has shown that such changes could cost £10.8 billion a year once behavioural effects, which the Opposition did not cost, are taken into account. That means that there is a massive £5 billion black hole in their plans. That shows, as I think the whole House can agree, that the Opposition simply have not learned from the Liz Truss debacle, which pushed up interest rates and the cost of mortgages for constituents of mine in Chipping Barnet and for people across the country. We will not make the mistake that the Opposition made.

The changes on agricultural property relief and business property relief introduced in April this year are expected to raise around £300 million a year while offering protection for family farms and businesses. Through 100% relief on the first £2.5 million of qualifying agricultural and business assets, a couple can pass on up to £5 million of assets between them tax-free, in addition to existing allowances such as the nil rate band.

As we reach 7 pm, I think I should come to a conclusion. To fix our economy for the long term, we must ignore the fantasy economics and the unfunded commitments of the Conservatives, which will lead to economic ruin. Instead, we will stay focused on maintaining the resilience of our economy, where GDP growth has been revised up and we now have the highest growth in the G7, where living standards are rising after they fell in the previous Parliament, where investment is up in the public sector and the private sector, and where productivity is rising at its fastest rate, outside of the pandemic, in more than a decade.

We will reject this motion this evening because we reject tax cuts for those in £10 million homes being paid for by cuts to our public services, including the NHS, police and local government up and down the country. Instead, we on this side of the House will stay focused on delivering good growth in every postcode and, as someone once said, hope in every heart.

Question put.

18:59

Division 86

Question accordingly negatived.

Ayes: 99

Noes: 291