Inheritance Tax

Chris Vince Excerpts

Wednesday 14th October 2026 Commons Chamber

[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.

--- Later in debate ---

[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.

[Chris Vince]

I thank the Minister for giving way; he is always generous with his time. Does the motion not just show that the Conservatives have the wrong priorities? Removing inheritance tax for families when the threshold is £1 million will make no difference to families in my constituency of Harlow. Less than one in 20 families pay inheritance tax. Is it not the right thing to do to tackle the cost of living crisis in the way that he is talking about?

[James Murray]

My hon. Friend makes an important point about politics being about choices and priorities. Indeed, in a world of difficult choices, the Conservatives choose to direct billions of pounds towards some of those with the largest estates, while everyone else is being asked to pick up the bill.

--- Later in debate ---

[Noah Law (St Austell and Newquay) (Lab)]

The Conservatives’ decision to cut inheritance tax for the wealthiest tells us exactly where their priorities lie: not with the everyday working man or woman but with the very wealthiest in our society, and not with constituents such as mine but with the wealthiest 4% or so, whose estates are affected by inheritance tax.

The Conservatives’ proposal would allow couples to leave their children £1 million of wealth, on top of a potentially very large home, without paying a penny in tax. They claim we are the party of welfare, but what does that make them? Tax cuts for the wealthiest paid for by spending cuts that take our country’s public services backwards. They tried that for 14 years, and it left our country poorer, sicker and economically stagnant. It is clear that they have not learned their lesson. Arguing for the effective abolition of inheritance tax sends a different message to what could be a much more reasonable debate about, say, uprating the threshold in line with inflation.

[Chris Vince]

My hon. Friend is making a powerful speech. Does he agree that the Conservatives’ argument would be far stronger if it was focused, as many of their speakers are, on family businesses and family farms? The motion talks about the abolition of all inheritance tax, including on estates. Surely that weakens their argument.

[Noah Law]

That is quite right. This is not pragmatic at all; this is complete ideology and returning to— [Interruption.] It is. It is pure ideology. The Conservatives are returning to their core comfort zone of defending only the very wealthiest at the expense of all the rest of us.