Andrew Griffith
Main Page: Andrew Griffith (Conservative - Arundel and South Downs)Department Debates - View all Andrew Griffith's debates with the HM Treasury
(1 day, 9 hours ago)
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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.
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?