Inheritance Tax

Dan Tomlinson Excerpts

Wednesday 14th October 2026 Commons Chamber

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

I thank hon. Members from both sides of the House for their contributions throughout the debate. Some of them definitely had the volume to enable all of us in the House to hear them. I thank the right hon. Member for Louth and Horncastle (Victoria Atkins), who is herself a former Treasury Minister, for her contributions. Given her experience, having spent some time working in the Treasury, we may have expected at least a hint of self-awareness from Opposition Front-Bench Members. The previous Government left Britain with crumbling public services, broken public finances and the worst Parliament on record for living standards.

Today, the Conservatives have come to the House demanding more unfunded tax cuts, worth up to £11 billion a year, without any clear plan whatsoever for how they would pay for them other than a vague commitment in the motion to cutting public spending. We all know what that means: it means cutting spending on the NHS, cutting spending on our schools and cutting spending on our police. That is what they did when they had 14 years in charge. We know that if they ever get on to the Government Benches again, their first port of call will be taking away money from our public services, which constituents up and down the country rely on.

The Conservatives’ plans would do nothing to help ordinary families with the cost of living and would benefit the very wealthiest estates. I do not think it is the right priority to give a £3.74 million tax cut to someone living in a £10 million mansion, but it is clear that their priority is to give massive tax cuts to people in £10 million homes. We will not take that decision on the Labour side of the House.

Over and again, the Conservative party sets out fantasy spending cuts that nobody believes it will deliver, and which clearly demonstrate its inability to add up or even to watch what the Government are doing. For example, some Opposition Members talked about changes to welfare spending and how the Conservatives plan to bring back face-to-face assessments. Yes, that would be a very good idea, and that is why the Government are doing that after Conservative Members scrapped face-to-face assessments during the pandemic and did not get round to reinstating them. We are bringing them back to ensure that we can move people off welfare and into work, because that is a Labour value and we support work.

In stark contrast to the Conservative party, it is because of the action that the Government have taken since coming to office that our economy is demonstrating strong resilience in the face of global challenges. Earlier this week, the IMF upgraded our forecast of growth for this year. We were the fastest growing economy in the G7 in the first half of the year. The IMF has also projected that we will have the lowest deficit in the G7 by 2031, and we are on track to cut the deficit by more than any other G7 economy between 2025 and 2030. From 2029, we will have the lowest borrowing in the G7.

[Robbie Moore]

Does the Minister agree with the Prime Minister’s long-term mentor Lord Blunkett, who last month at the Countryside Alliance’s rural reset conference said that the Prime Minister should use his time in the premiership to change the inheritance tax on farms because that was a mistake that the Labour party had made?

[Dan Tomlinson]

The Government’s policy on inheritance tax has been set out today. We will not be voting for the motion before us today because we do not believe that slashing public services and public spending for people living in £10 million mansions is the right priority. That is the Conservatives’ choice; it is not ours.

This Government will deliver good growth in every postcode and provide breathing space for families and businesses. Underneath all that, we will continue to focus on fiscal discipline. The Prime Minister and the Chancellor have been clear that we will meet our fiscal rules at the Budget later this month with a buffer against uncertainty, and we will continue to control borrowing so we can bring down inflation and reduce the long-term pressures on our public finances. That is the right thing to do, because there is nothing progressive about a Government spending £1 in every £10 on debt interest rather than on the priorities of working people.

[Alicia Kearns]

The Minister has just touched on what the Prime Minister has said. The Prime Minister also told the people of Makerfield that he needed to look again at the family farm tax. Why are the Labour Benches so full of MPs this evening saying that we are absolutely not moving on it when the Prime Minister made that very clear promise during the by-election? Who are we to believe: the Prime Minister then or the Prime Minister now?

[Dan Tomlinson]

We will vote against the Opposition motion this evening. The responsible approach that this Government are taking stands in stark—

[Markus Campbell-Savours]

I ask the Minister to please not let the Opposition distract us from what can be done. The SFI debacle the other day demonstrated that farmers are struggling. There is an opportunity to do the right thing at the Budget. He must not let the party that wants to give tax benefits to the owners of £175 million penthouses distract us. There is something in what the Conservatives have written about farm taxes, but it is very different from the wider issue they have raised in this daft motion.

[Dan Tomlinson]

I thank my hon. Friend for his continued advocacy for the farmers in his constituency and across the country. Labour Members engaged constructively with me, the then DEFRA Minister and the then Prime Minister on the issue of the threshold in the inheritance tax changes for farms and businesses, and we made a change late last year to reflect the conversations and concerns on the Government Benches and the representations received then.

On the changes for residential property, it is worth noting before the House that independent analysis has shown that such changes could cost £10.8 billion a year once behavioural effects, which the Opposition did not cost, are taken into account. That means that there is a massive £5 billion black hole in their plans. That shows, as I think the whole House can agree, that the Opposition simply have not learned from the Liz Truss debacle, which pushed up interest rates and the cost of mortgages for constituents of mine in Chipping Barnet and for people across the country. We will not make the mistake that the Opposition made.

The changes on agricultural property relief and business property relief introduced in April this year are expected to raise around £300 million a year while offering protection for family farms and businesses. Through 100% relief on the first £2.5 million of qualifying agricultural and business assets, a couple can pass on up to £5 million of assets between them tax-free, in addition to existing allowances such as the nil rate band.

As we reach 7 pm, I think I should come to a conclusion. To fix our economy for the long term, we must ignore the fantasy economics and the unfunded commitments of the Conservatives, which will lead to economic ruin. Instead, we will stay focused on maintaining the resilience of our economy, where GDP growth has been revised up and we now have the highest growth in the G7, where living standards are rising after they fell in the previous Parliament, where investment is up in the public sector and the private sector, and where productivity is rising at its fastest rate, outside of the pandemic, in more than a decade.

We will reject this motion this evening because we reject tax cuts for those in £10 million homes being paid for by cuts to our public services, including the NHS, police and local government up and down the country. Instead, we on this side of the House will stay focused on delivering good growth in every postcode and, as someone once said, hope in every heart.

Question put.