Inheritance Tax

Andrew Murrison Excerpts

Wednesday 14th October 2026 Commons Chamber

[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.

--- Later in debate ---

[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.