Inheritance Tax

Blake Stephenson Excerpts

Wednesday 14th October 2026 Commons Chamber

[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.