Inheritance Tax

Andrew Lewin Excerpts

Wednesday 14th October 2026 Commons Chamber

[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.

--- Later in debate ---

[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.