Inheritance Tax
Debate between Ashley Fox and Neil Shastri-Hurst(2 days ago)
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Dr Shastri-Hurst
I fundamentally do not agree with the hon. Lady’s point, and I suspect that farmers in this country will be wondering why her party has not stood up for farmers over fertilisers today.
Dr Shastri-Hurst
From a sedentary position, my hon. Friend makes a very valid point.
Let us not kid ourselves: this debate has been framed as though we have some sort of Dickensian model of the idle rich and then the poor who are propping up the state. That is not the truth. The reality is that, as my hon. Friends have said, those who are very rich will inevitably put their affairs into trusts and escape inheritance tax. We are talking about those who are just about managing: those who are trying to earn a crust and to support their families. It is the middle class who get caught—those who go out to work every day to provide for their families.
The average property price in my constituency of Solihull West and Shirley is now £345,000. Such properties are owned not by the toffs who are often derided by those on the Labour Benches, but by people who get up every morning and often work more than one job to provide for their families. People have tripped into paying inheritance tax by virtue of property prices being pushed up and the threshold remaining the same. The reality is that this tax is not operating as it was intended. It is not capturing the individuals it was intended to capture; it is capturing the ordinary man and woman. The fact that the Government have frozen the threshold until 2031—a threshold that was first put in place in 2009—means that, whereas only 4% of deaths were captured by this particular tax between 2001 and 2024, 9.5% of deaths will be captured by 2030.
When we compare ourselves with other OECD nations, we see that 18 of those 38 nations do not pay any inheritance tax at all—Australia, Canada and New Zealand among them—and none of the remaining 20 has it at such a punitive rate as we have here. The purpose of a tax system is of course to help fund our public services, but it also has to be fair, sensible and aspirational in its intent. It must ensure that those who strive and work hard are not penalised as a consequence, and I am afraid that this Government’s direction of travel is simply taking out those that do work hard—our family farms, our family businesses and others—by the knee.