Clause 1

Debate between Jim Allister and Sarah Olney

Monday 12th January 2026 Commons Chamber

[Jim Allister (North Antrim) (TUV)]

I rise to speak to clause 62 and schedule 12.

I certainly welcome the fact that, though belatedly, the Government did get to the point of climbing down on the £1 million threshold. They should have gone much further: this tax should not exist at all. If there is to be such a tax, it should be at a viable threshold. The climbdown was not delivered with great grace; indeed, it followed a debate in this House in which the Minister doggedly defended the £1 million threshold, telling us it was fair and necessary—the very words that he uses now to defend the £2.5 million threshold. However, even though that was the manner of the delivery, the climbdown, so far as it goes, is welcome.

We need to be aware of the limitations on how far this concession does go, as it will very swiftly be diminished with time because of the lack of indexation. This is a diminishing win—a win secured by our farming communities through their determined campaigning, but a win that will melt away as each year goes by. Take my part of the United Kingdom: Northern Ireland. In the past five years, land values have increased by 40%. If that trajectory continues for the next five years, in today’s terms the threshold will be worth only £1.5 million. It will lose 40% off its value.

Unless the Government are willing to face up to the need to index-link the threshold, the bona fides of their conversion on this issue is very suspect indeed. If they have genuinely realised that £1 million was wholly inadequate and £2.5 million as a minimum was necessary, they need to sustain that value going forward. That is the real test of the bona fides of this Government on this issue. They cannot simply sit back and wait for the Treasury to increase its tax take because land values rise and the value of the £2.5 million diminishes every time that happens. If it is only a tactical move to buy time, then time is on their side, because in due course this will fritter away to the point where it is of very little value indeed.

My plea tonight is for the Government to demonstrate that they have genuinely realised the need to protect farming families by committing to index-linking this concession. Without that, it will diminish very severely with time, and surely those who feed us and keep bread on our tables are the people this Government should be thinking about. They are not thinking about them if they insist on a de minimis threshold that will dimmish almost out of sight as time goes forward. That is the test of this Government.

[Sarah Olney (Richmond Park) (LD)]

I want to speak to amendments 42 to 47. The Bill fails to recognise the specific way in which family businesses are different from businesses whose shares can be traded. The tax changes announced at the 2024 Budget treat family businesses as though they are a liquid asset or as if their underlying value is expressed in tradeable shares, but family businesses are neither. Shares in a family business have only a nominal value, and it is this nominal value that is transferred upon death. No cash arises from the transaction—unlike with the sale of shares on an open market. That means that money to pay any tax charges arising on the transfer must be made out of the business’s current assets or by disposing of its fixed assets. The value of a family business is often in its fixed assets—typically land, buildings, plant and machinery, as well as patents, copyright and goodwill.

The purpose of business property relief was to enable those assets to pass intact from one generation to the next in order for the business to be transferred as a going concern and to maintain steady revenues that guarantee employment and supply chains. Removing BPR from the inheritance tax regime will mean that assets will need to be sold to pay the inheritance tax. That will not only reduce the overall value of the company but limit its ability to generate future revenue. Asset sales will already be subject to capital gains tax before the net value can be released to the shareholder by way of a dividend to pay the individual IHT liability, and that dividend itself will be subject to tax, so the asset sale has to realise sufficient cash to pay three separate taxes.

Members might argue that assets being disposed of by one company does not take them out of the economy, and indeed our tax system should ensure that assets are allocated to wherever they can be most efficiently exploited, but this change to BPR does not ensure the efficient reallocation of assets from one business to another. It forces the sale of productive assets that were being efficiently used, and there are no guarantees that the asset can be put to its most productive use under its new owner.

Recent experience has shown that UK assets are increasingly being picked up by foreign investors, increasing the risk of job losses, restructuring and head office operations being moved abroad. Forced sales that need to be completed within IHT timescales are unlikely to make their full market value. In a specialised market in which there are few annual sales, one depressed sale value can influence the valuation of other assets in the same class, having a knock-on effect on all company balance sheets.

Death comes to us all in the end, being the only certainty in life apart from taxes. The IHT regime recognises and allows for assets to be passed down the generations without being taxed as long as seven years has passed between the date of the gift and the death of the bequeather. For many family businesses, the change in BPR rules will just mean that they have to actively plan for an orderly transition of shares to enable them to take advantage of this provision. But for some families, it is already too late to plan effectively.

The largest employer in the London borough of Richmond upon Thames is a family-owned business with the majority of shares owned by the founder, who is in his 90s. Even were the shares to be transferred now, there is little chance that seven years will elapse before his death, and therefore there is every risk that the firm will need to be broken up in order to pay the IHT liability, putting hundreds of jobs at risk.

Of course, tragically there is always the risk of unexpected death. While not being its principal purpose, one of the advantages of BPR is that it relieves the families of the deceased from involving themselves with complicated business transactions while mourning their unexpected loss. I welcome, of course, the announcement of the raising of the BPR threshold from £1 million to 2.5 million, but that merely reduces the number of companies that will be liable for the tax rather than addressing the issue.

There is currently no certainty on either the number of businesses that will be affected or on the amount of additional tax revenue that will be raised by the measure. The OBR has not delivered a costing based on the change to the policy announced in December. Given that the policy will trigger behaviour change, it is unclear to me that the benefits of this measure will outweigh the potential harm to employment in otherwise thriving businesses up and down the country.

I am sympathetic to the Chancellor’s instincts in this matter—I too, think we should be prioritising the needs of entrepreneurs over the protection of inherited wealth—but the likely meagre returns to the Treasury as a result of this policy do not justify the likely impact on employment that will occur if otherwise thriving businesses are forced to be broken up.

Representation of the People

Debate between Jim Allister and Sarah Olney

Wednesday 13th November 2024 Commons Chamber

[Sarah Olney]

The hon. and learned Gentleman mentioned that he does not see why political parties that compete fairly should have anything to fear. I put it to him that it is not a fear of political parties; it is much more about upholding the rights of voters. It is their interests that we need to protect, not the interests of political parties. That is why we are calling for the abolition of voter ID, although I fully take on board his points about the situation in Northern Ireland.

[Jim Allister]

We are protecting voters when we prevent voter fraud, which is precisely what voter ID does. It is the ordinary citizen who is being protected—the citizen who wants to play by the rules, who wants to vote properly, and who does not want to cheat or personate others. That is the person we are protecting by introducing voter ID.

[Sarah Olney]

As I said to the shadow Minister, the hon. Member for Hamble Valley (Paul Holmes), the risk of being prevented from voting because of an inability to produce the relevant voter ID is much higher than the risk of personation. That is borne out by all the evidence and research. The hon. Gentleman managed to cite one instance in Eastleigh. I put it to him, and to the hon. and learned Member for North Antrim (Jim Allister), that that single instance is likely to be outweighed many times over by the number of people who were prevented from voting by the requirements.

[Jim Allister]

I respectfully suggest that there is probably an unknown hidden degree of personation. If a certain number of people are prosecuted, it does not mean that only that number of people are personating others. The way to rule out personation and present hurdles to it is to have voter ID. I really do not understand why anyone who wants a clean election, with only legitimate voters voting and only legitimate votes counted, would say, “We don’t want any protections to ensure that there’s no voter cheating.” Surely we should all want to be on the side of preventing cheating in elections. This really is the question: are we on the side of making it more difficult to cheat in an election, or on the side of making it easier? Surely we should all be on the side of making it more difficult. I therefore strongly defend voter ID.

Returning to the core subject matter, it is fitting that in the week of Remembrance Day we are adding the veteran card to the ID list. I look forward to that happening in Northern Ireland as well, but I want to raise a point that a serving soldier sent me a message about, which also touches on voting. He wrote:

“I just want to highlight a further issue that serving members of the Armed Forces when serving abroad can’t exercise their ability to vote due to the inefficiency of the now contracted British Forces Post Office. The length of time to request a postal vote”,

which is how most service people vote,

“and then to send your vote means you miss the deadline”

often. He then cited all the countries where servicemen are. Some can be as far away as the Falklands, Germany, Poland or Africa. He asked why we cannot have more efficiency in getting postal votes out to service people and back. That seems a legitimate question. He went on:

“Many other countries provide polling booths in their military bases or…in their embassies”.

Why do we not do that, Minister? Why do we not go further for our service personnel serving abroad, to ensure that they participate in the democratic process, as they are entitled to? Those are important questions that need to be answered, and a matter to which this House should give some attention.