Inheritance Tax

Neil Hudson Excerpts

Wednesday 14th October 2026 Commons Chamber

[Patrick Spencer (Central Suffolk and North Ipswich) (Con)]

If it is okay with you, Madam Deputy Speaker, I am going to approach this debate in two sections.

First, let me paint a picture of the reality faced by residents in my constituency. I am blessed to represent a constituency that has everything—yes, rural communities made up of farms large and small, but also towns populated with small and medium-sized independent businesses that hon. Members should visit, such as Simpson’s Sweets and Bulstrodes of Framlingham, Luxmoore of Framsden, Buckle Shipping of Blakenham, the Lion pub of Debenham and Milsoms of Kesgrave. Many of those businesses are family owned and run, and many of those family businesses are made up of parents working with children, nephews, nieces, brothers, sisters and even grandchildren.

There is a palpable love and passion among family members working for something that their parents, uncles and grandparents built. There is care for customers and a profound camaraderie among team members that is so hard to replicate. These businesses are not just great places to work; they provide world-beating products and services. Dingley Dell in my constituency sells pork products—[Interruption.] It is a real place. It sells products to the Oberoi Hotel in New Delhi.

[Dr Neil Hudson (Epping Forest) (Con)]

Are there any black Labradors at any of the premises that my hon. Friend mentions?

[Patrick Spencer]

I am happy to report that the black Labrador population of Suffolk is thriving.

SEERS Medical in Debenham sells medical equipment around the world. Such businesses are invaluable to our economy and society. They not only provide jobs, but pay their taxes, which supports critical public services. We need businesses to boost productivity and to supercharge social mobility.

For so many of my local businesses, there is an unquestionable sadness that the current Government seek to penalise them for wanting to keep a business in the family. That cannot be truer for families of farmers who have tended to land for generations, waking up early and dedicating unimaginable hours, seven days a week, 52 weeks a year. Now they are told that they have to give that up, because this Prime Minister does not have the temerity to get to grips with the welfare budget and because this Labour regime cannot bring itself to stand up to the civil service unions that want to work four days a week for more pay. Yes, everyone heard that right: this Government want to tax the farmers and the entrepreneurs who work seven days a week so that civil servants in London can work four days a week.

The Labour party was founded to protect workers’ rights, but workers in my constituency feel abandoned by this Government. The iniquity of this social and economic contract negates the utter lunacy that seems to govern the Government’s approach to our public finances. I would welcome anyone in this Chamber, or anyone in this country, making a reasonable argument that public spending in its current form, with interest rates at record levels and rising, is sustainable. We have a debt-to-GDP ratio of approximately 100%, with £3 trillion in debt outstanding. We borrowed more than £134 billion last year alone. As a percentage of GDP, we spend as much now as we did at the height of the global financial crisis when we were bailing out banks, and as much as we did during the mid-1970s. By complete coincidence, that was the last time we had a proper left-wing Government like this one in place.

How many warnings from the International Monetary Fund do we have to put up with until the Government suddenly take note and realise that they cannot borrow and spend their way out of a crisis? In June 2026, September 2026 and just earlier this week, international economists have said enough is enough.

--- Later in debate ---

[John Cooper (Dumfries and Galloway) (Con)]

Nothing illustrates the great divide between rural Britain and this urban-centric Labour Government quite like the family farm tax. This was a comprehensive failure to grasp how intergenerational farming works and a wilful failure to understand that asset-rich does not equate to cash-rich, as evidenced by the hon. Member for Tipton and Wednesbury (Antonia Bance), who is sadly not in her place.

A chill was sent through rural Dumfries and Galloway by changes to agricultural property relief, for this was not just about farmers but the wider community and the many jobs intertwined with dairy and beef, pigs and sheep, arable and horticulture. Since my election to this place, I have seen military veterans—some of the toughest people I have ever had the privilege to meet—well up, recalling comrades lost and maimed in the service of this country, and a woman in tears because duff pension advice had robbed her. I have had farmers weeping, too—men in their 80s, with hard knocks enough for many lifetimes under their belts. Those proud old men were crying not for themselves and what they thought they might lose in what little time lay ahead, but about what future generations would lose.

Many families realise that no child will now take on the stark new financial reality of farming. How incredible was it to sit in this place and watch Ministers giving advice on how to mitigate the damage their own policies were doing? Labour likes to roar about the 14 years we Conservatives had in power, but what were they doing in their 14 years in opposition? Clearly precious little proper planning, because the inheritance tax changes, which were so toxic that no one else would touch them, were dusted off in jig time amid a scramble to be seen to be doing something—anything—in that first 100 days.

Inheritance tax is invidious in all its forms: it is the state exacting a last drop from estates, which is gathered despite the taxman’s previous depredations. It is double taxation, for anything in the purview of His Majesty’s Revenue and Customs on death has already come through the storm of income tax, capital gains tax and VAT. That is why we Conservatives have pledged to reverse the cuts to agricultural property relief, abolish inheritance tax on the family home and raise the individual threshold to £500,000. That would mean that a couple could pass on their main home to direct descendants free from inheritance tax, plus a further £1 million without any inheritance tax liability.

[Dr Hudson]

These are people who are doing the right thing: farmers who feed us and look after our precious environment, family businesses supporting their local economy and families who work hard to provide a family home. Is not their being able to pass on their farms, family businesses and family homes to the next generation free from inheritance tax, about fairness?

[John Cooper]

I thank my hon. Friend, who speaks to farmers far more than Labour Front-Bench Members ever do. Indeed, he knows that this is about fairness. We Conservatives believe in rewarding those who have done the right thing: those who have strived and who have saved.

There is further positive news from our plan, as highlighted by the TaxPayers’ Alliance. In October 2024, the previous Chancellor of the Exchequer announced an increase in the interest rate on the late payment of taxes. The rate had been calculated on the Bank of England base rate plus 2.5%, but the Budget saw an increase in the surcharge to 4% above base, so the interest rate on late payment of tax is currently a usurious 7.75%. Asset-heavy, cash-light taxpayers such as farmers are particularly vulnerable to that change as it takes time to convert assets into a form that allows them to pay that balance.

Inheritance tax is due six months after death, after which interest is charged daily on unpaid tax. However, executors may struggle to meet the deadline because properties are illiquid assets that can take considerable time to sell, particularly when probate is required. Selling properties quickly may mean accepting a lower price, while waiting for a better offer can result in additional punitive interest charges. The probate process creates further difficulties as executors often need probate to sell inherited properties, yet generally inheritance tax must be paid before probate is granted.