Inheritance Tax

Ashley Fox Excerpts

Wednesday 14th October 2026 Commons Chamber

[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.

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[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.

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[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.