Inheritance Tax

Debate between Paul Holmes and Daisy Cooper

Wednesday 14th October 2026 Commons Chamber

[Daisy Cooper]

The hon. Gentleman’s first question was broader and was asking about the capacity of businesses generally to pay for advance tax planning. Hopefully we can all agree that the tax code in this country is so complicated that unfortunately people must seek expert tax advice. Our tax system could be much simpler. The point that I was trying to make is that there are problems and loopholes with this particular tax. We have one of the highest headline rates of inheritance tax in the OECD, yet only 4% of estates end up paying it. The burden often falls on those who cannot take advantage of the loopholes and exemptions that are available to those with access to expensive tax advice.

We would reform inheritance tax to make it fairer, but let us be clear: a mini-Budget style approach to tax cuts is not the way to do it. There is a better alternative. If we want to help people who are being squeezed by the cost of living, the fairest and most effective approach is to cut income tax. We Liberal Democrats have done that before; when in power, we would do that again. In Government, we cut tax for millions of people, taking 3.4 million people out of income tax altogether. Today, we Liberal Democrats are committed to raising both the income tax personal allowance and the national insurance threshold to £15,000 over five years—[Interruption.] Conservative Members ask where we are going to find money for that—I will tell them.

[Paul Holmes (Hamble Valley) (Con)]

The hon. Lady is making an excellent case for her leadership campaign. If the Liberal Democrats got into government and put these policies forward, does she believe that the leader of the Liberal Democrats would be there to do it?

[Daisy Cooper]

Yes. Of all political parties represented in this Chamber, the official Opposition will know that the leader of the Liberal Democrats was an excellent climate Minister in the coalition Government. Our party leader is an economist and would never, ever have done what the hon. Gentleman’s party did with the mini-Budget.

Our Liberal Democrat policy would take a further 2.5 million people out of paying income tax altogether. While the Conservatives’ proposal would benefit only around 30,000 people, funded through a mini-Budget style approach to tax cuts, our plans would deliver tax cuts to more than 30 million people across the country. Crucially, we would pay for that responsibly through the growth dividend generated by a new growth and defence partnership with the European Union.

[Daisy Cooper]

I know exactly where Carlisle Avenue is. Based on the demographic of that ward, I might go and knock on that door and ask if their mortgage went up after the Liz Truss mini-Budget.

We Liberal Democrats are clear: rebuilding our relationship with Europe is the single biggest lever available to increase economic growth, to boost living standards and to cut personal tax. For as long as the Conservative party refuses to acknowledge that, it will remain an anti-growth, anti-business party. We Liberal Democrats know that economic growth is not an end in itself. As we grow the economy, it is incumbent on all parties to ensure that the benefits of that growth are shared widely across the country.

[Paul Holmes]

In the hon. Lady’s view, what would be the greatest thing to increase growth and business growth in this country? Would it be rejoining the European Union, or would it be halving national insurance contributions by businesses for people aged 18 to 24?

[Daisy Cooper]

I can tell the hon. Member that, based on the statistics, the thing that would bring the biggest amount of growth would be having a closer relationship with Europe. He will know that we Liberal Democrats opposed the rise in national insurance contributions, and we have said that we would like to see the reversal of the lower threshold as an immediate move to give businesses back the incentive to give young people jobs, given the crisis of young people not in education, employment or training. That is why our plans link the additional growth generated by a stronger partnership with Europe directly to tax cuts for working people. That is the fair way to help families facing the cost of living crisis, the responsible way to cut taxes and the honest way to pay for tax cuts, unlike the Conservatives’ unfunded promises.