Oral Answers to Questions

Debate between Torsten Bell and Helen Morgan

Monday 27th October 2025 Commons Chamber

[Helen Morgan (North Shropshire) (LD)]

16. What steps he is taking to help tackle the potential impact of the lack of indexation on pre-1997 pensionable service in defined benefit pension schemes on people affected.

[The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)]

I obviously recognise the challenges facing those without inflation protection, particularly after the cost of living pressures of recent years, and I think that recognition is shared by Members on both sides of the House. I met a cross-party group of MPs earlier this year to discuss exactly this issue. Reforms in the Pension Schemes Bill give trustees more flexibility to share surpluses in their DB pension schemes with employers, and to negotiate for members to benefit from any such sharing of surpluses. That could include discretionary increases to address the issue raised by my hon. Friend the Member for Llanelli (Dame Nia Griffith).

[Torsten Bell]

I absolutely recognise the issue that my hon. Friend has raised: any of us in that situation would want those pension increases to continue. She is aware of the legal background, but I should point out that scheme rules govern when inflation-linked increases can be paid. They are not changed retrospectively, but the Pensions Regulator has spelt out that trustees should consider those who are not receiving inflation-linked increases when making their decisions, and should also consider the history of making such awards—particularly in some of the examples that my hon. Friend has given. As I have said, I think that the provisions in the Pension Scheme Bill give trustees more power to argue for those increases.

[Helen Morgan]

I have been contacted by a constituent who, along with her husband, worked for Hewlett Packard. They accrued their pensions before 1997, and now, along with about 50,000 members of the Pre-97 Alliance, they are facing real financial hardship. In 10 years’ time, their pensions will be pretty much worthless. Will the Minister not consider legislating to ensure that these people are not left in poverty, having been promised proper pensions when they started work for the companies concerned?

[Torsten Bell]

The hon. Lady has mentioned a specific company, although a small number of others are in the same position. I am sure that not only the people running that company but the trustees will have heard the powerful case made by Members on both sides of the House. These decisions must be made in line with the scheme rules, but no one wants savers to see the value of their pensions fall over time, and I hope that employers will take the case being made in the Chamber seriously.

Agricultural Property Relief

Debate between Torsten Bell and Helen Morgan

Tuesday 28th January 2025 Westminster Hall

[Torsten Bell]

I will not comment on the individual example the right hon. Gentleman gave, but in general he is right to say that there can be large variations in the profits of farms between years and between farms. That is partly why the tax system already allows us—uniquely for farmers—to average profits over periods of time. Obviously, our advice to all farmers who think they will be affected by the change is that they should seek advice in turn.

I turn to the impact that these reforms will have, as that has been the central focus of most comments today.

[Helen Morgan]

rose—

[Torsten Bell]

I will make some progress.

In 2026-27, up to 520 estates claiming agricultural property relief, including those that also claim business property relief, are expected to pay more as a result of this change. That means that around three quarters of estates claiming agricultural property relief will not pay any more than they do now.

The hon. Member for Keighley and Ilkley and the right hon. Member for Orkney and Shetland (Mr Carmichael) asked questions about business property relief and specifically about claims that are not covered by agricultural property relief. Around three quarters of estates claiming business property relief alone—that is, the same proportion that have agricultural property relief, once we exclude those only holding alternative investment market or AIM shares, which are often held for the purpose of avoiding inheritance tax—will not pay any more inheritance tax in 2026-27. All estates making claims for these reliefs will continue to receive generous support, at a total cost of £1.1 billion to the Exchequer. The system will remain more generous than it was before 1992, when inheritance tax was applied at a maximum rate of 50%, including on the first £1 million that was passed on.

Several Members have implied that the change will end the passing-down of farms between generations. I gently point out in response that farmers, agricultural landowners and small business owners did not receive 100% relief on inheritance tax for almost all of the 20th century, yet farms and businesses were very much passed down between generations. Indeed, the tax system will continue to support that process. As the Institute of Fiscal Studies has said, our reforms will:

“still leave…land much more lightly taxed than most other assets”.

These changes should also be seen in the wider context of support we are providing for farmers and rural communities. The hon. Member for Aberdeenshire North and Moray East (Seamus Logan) was wrong in his comments about the Office for Budget Responsibility, as the document produced this week provides no new information. However, he was right about the importance of food security, as was the hon. Member for Great Yarmouth (Rupert Lowe). That is why the Budget committed £5 billion to farming over the next two years, including the biggest budget for sustainable food production in our history. It also committed £60 million to help farmers affected by the unprecedented wet weather last winter. The wider tax system will also continue to support farming—tenants as well as owners—including through exemptions from business rates, the use of rebated diesel and the ability, as I said, to average tax affairs over a number of years.

As we have heard today, the reforms to inheritance tax generate strong views. I understand that. I recognise that a small number of estates will have to pay more. I have not hidden from that today, nor in conversations—