Inheritance Tax

Catherine West Excerpts

Wednesday 14th October 2026 Commons Chamber

[Catherine West (Hornsey and Friern Barnet) (Lab)]

It is a real pleasure to speak in this debate and to reflect on the question of inheritance tax brought to the House by the Conservative party. It affects about 4% of the population. On the Government Benches, we are rather more concerned with the 63% of the population who are facing tough times. Labour will therefore be voting against this Opposition day motion.

I think we all remember where we were in the summer of 2022 when Liz Truss crashed the economy. The mortgages that ordinary families around the country were paying went through the roof. A shiver went down the spines of all the people who had pensions invested, as civil servants were sacked and the general reputation of the economy in the UK was trashed. Sadly, we have been paying the Truss penalty ever since. However, those of us on this side of the House fought to stop the chaos, restore hope and deliver change. In two years a lot of progress has been made, and even more has been made over the summer. I look forward to the Budget that will be presented in two weeks’ time, which will have more to offer those who are struggling with the cost of living crisis.

Today, His Majesty’s official Opposition are asking the House to vote to bring back that version of chaos. Independent analysis suggests that the Conservatives’ inheritance tax proposals could cost up to £10 billion a year. Most families would rather see that money used to tackle the cost of living for everyone and to increase the wealth of the country as a whole, rather than being used to provide tax cuts for the 4% proportion of the population affected by this particular tax. The Conservatives say that theirs is the party of home ownership, but after their 14 years in government, home ownership fell out of reach for too many young people. The only growth was the growth in homelessness, which, sadly, increased by 74% during those 14 years.

Working people look to the Government to tackle the cost of living crisis and give them some breathing space, but unfortunately the Conservatives’ priority is cutting tax on inherited wealth. As my hon. Friend the Member for Welwyn Hatfield (Andrew Lewin) pointed out so eloquently, we should be looking at all possible options to establish the meritocratic principle that no matter where you are born or what your background is, you should have an opportunity throughout your working life to make the very best of it and to be successful.

[Rebecca Smith (South West Devon) (Con)]

I wonder whether the hon. Lady might like to comment on the fact that from next April pensions will be included in what is being described as “inherited wealth”. Does she agree that pensions are not inherited wealth, but money that has been earned and set aside by those doing the right thing? Now there will be a cost to ordinary families when they hand that money down.

[Catherine West]

As the hon. Lady knows, a commitment has been made not to tax those who only receive the state pension. Those who earn a lot, whether through pensions, inheritance or other things, will be taxed proportionately, which sounds like a pretty fair principle to me.

In the meantime, we on this side of the House are getting on with building a fairer country with a new political and economic model, but we also need to help people right now. That is why Labour has taken immediate action to provide breathing space for people and businesses. A couple of Members have mentioned the IMF report. As so often with the work of economists, it is a bit of a curate’s egg. Some people may prefer the text that was on the opposite side, but the bit that I preferred came from the economist Ms Tenreyro: the world economic outlook report gave the UK’s GDP an upgrade. That, I think, gives us some hope. It sets a fairly positive background for the Budget that is just two weeks away. We on this side of the House have woken up to a little bit of positive news, which is also quite a good background for the decisions that will come in two weeks’ time.

I know that many other Members wish to speak, so I will be brief. I am particularly pleased about the scrapping of VAT on electricity bills for the winter, and I know that there is more to come for households that use a lot of electricity, perhaps owing to disability or because a large number of people live in the same home. The capping of bus fares at £2 for the whole of 2027 will help people travel to work or to job interviews. The change in the rules on branded items of school uniform will ease costs for families. Business rates for pubs, social clubs and music venues have been reduced by 20%, and in London all children will have a hot dinner in the middle of the day at school. The public procurement rules have been changed to back British businesses and jobs. So many things have been introduced in the short two years for which Labour has been in office, and there is much more to come.

These measures build on work that Labour has done to restore stability and growth to the economy. Difficult decisions have been taken, and I was pleased to note that the Prime Minister had announced a further difficult decision on the triple lock. This, I think, is a moment when we have to be a little bit gutsy in our politics. I was pleased that the Prime Minister announced that very difficult decision; it is coming down the track, but he did at least announce it, so that we can start talking about the difficult challenges that we face in respect of social care.

There is a ring of chaos to the proposals flung out by the Conservatives. I know about this, because I was in opposition for 14 years. I know how tempting it is to have a giggle in Opposition day debates, but we have to face the truth. We have to make some difficult decisions in order to restore the reputation of our economy with the markets internationally, but also to build the important foundation with some innovation that has been raised by my hon. Friend the Member for Welwyn Hatfield and others who I am sure will speak in this debate.

[Dr Caroline Johnson]

Will the hon. Lady give way?

[Catherine West]

I will not, because I have only 40 seconds and I know that other Members want to speak.

We will get on with delivering the difficult decisions and the change that our communities are longing to see.