Tim Roca
Main Page: Tim Roca (Labour - Macclesfield)Department Debates - View all Tim Roca's debates with the HM Treasury
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Tim Roca (Macclesfield) (Lab)
Madam Deputy Speaker, “We do not only ask today, ‘How much have you got?’, we also ask, ‘How did you get it? Did you earn it yourself, or has it just been left to you by others?’”. The estate duties provide a “corrective against the development” of the “idle rich”. And, “It is a far better thing to tax the accumulation of the past than to burden the industry of the present.”
Those are not my words, Madam Deputy Speaker, but those of Winston Churchill, speaking 100 years ago. They raise a question that remains relevant today: do we want a country that gives people a fair chance to get on in life or one that keeps finding new ways to protect the wealth of those who already have the most?
This motion tells us exactly where the Conservative party’s priorities lie. It calls on the Government to cut public spending in order to abolish inheritance tax, but it does not tell us which services they would cut, whose support they would withdraw or which communities would pay the price. It simply says “cut public spending.”
That is easy enough to demand when one does not have to explain what it means for people’s lives. The Conservatives are asking us to approve billions of pounds in tax cuts without telling us how they would pay for them. That is not a serious plan; it is a tax giveaway looking for someone else to pick up the bill. They say that the proposals would cost around £6 billion by 2029-30, but as we have already heard from other hon. Members, once we take behavioural effects into account, the cost could be up to £10.8 billion.
Who would benefit? Around 30,000 estates are expected to benefit. Estimates suggest that around 90% of the gains would go to the wealthiest 20% of pensioner households, with around 40% going to the wealthiest 5%. Around 70% of the benefits would go to London and the south-east, despite those areas accounting for only a quarter of pensioner households. Meanwhile, under the current system, fewer than one in 20 estates face an inheritance tax charge—a figure that has remained relatively stable for several decades now.
Let us stop pretending that this is a tax cut for everyone; it is a substantial giveaway that would disproportionately benefit the wealthiest households to the tune of £10.8 billion. Nobody disputes that family farms matter, and families should be able to pass on and plan for the future of those farms and businesses. But wrapping a policy in the language of family farms does not mean that we should stop asking who benefits, and this proposal goes much further than targeted help—it is a wider tax break for the very wealthiest in society.
There are questions about how it would work in practice. Conservatives say that they want to help people to pass on their homes, but what happens if those tax changes give older people a reason to stay in a larger property rather than downsize? Someone might want to sell a large home, move somewhere smaller and release money to support their retirement or help their family, but if inheritance tax treatment makes moving financially unattractive, their policy could discourage exactly the behaviour that they say they want to encourage.
Lewis Cocking (Broxbourne) (Con)
That is exactly why we would abolish stamp duty when people buy their home as well.
Tim Roca
The Conservatives point to stamp duty as a barrier and promise to scrap it on a home, but removing one cost does not automatically resolve every other tax consequence, and we know that changes in tax policy are very behaviour sensitive. This is what happens when a party writes a policy to win a headline for a conference.
It brings me back to Churchill. More than a century ago, he challenged the idea that inherited wealth should be waved through simply because it happened to belong to the right family. He asked the straightforward question that I quoted at the beginning: did you earn your wealth, or was it left to you?
As my hon. Friends have said, people want to leave something to their children. There is nothing wrong with that. But why should the Government spend billions helping those who are already wealthy pass on even more while telling everyone else that public spending should be cut?
Dr Johnson
The hon. Gentleman is making a distinction between money earned by somebody and money earned by their father. If a man and his daughter run a business together and the father dies, should the daughter not inherit? How much did she earn the money by working in that business? Did she not earn it? Why should it matter? That business employs people—whom the hon. Gentleman has talked about—who will lose their job if that business must close.
Tim Roca
If the hon. Lady wants to have an argument with Churchill, she may do so, but I will not join her. I believe he was a great man.
Why should the Government spend billions helping those who are already wealthy? Why should families inheriting millions take priority over families struggling with bills? That is the choice at the heart of this motion: invest in services and support people who rely on them or hand a huge tax break to a small minority and leave everyone else to bear the cost.
The Conservatives’ record makes their claims of fiscal responsibility even harder to take seriously. Between 2010 and 2019 the national debt increased from £1 trillion to £1.8 trillion. That was before covid and the war in Ukraine. Debt to GDP increased from 69% to 84%. As Members have pointed out, we then got treated to the Liz Truss magic of a disastrous experiment in unfunded tax cuts that sent markets into turmoil and damaged confidence in the UK.
Then before the 2024 election we had many other promises of tax cuts worth billions that did not have any credible funding plans set behind them. Here they are again with another enormous tax giveaway but unable to tell us precisely which public services would pay the price. They have not learned the lessons of their failure; they just found new ways to replicate them.
The public finances are not a bottomless pit that politicians can dip into whenever they fancy announcing a tax cut. Every promise has to be funded properly, because it has consequences for real people. The Conservatives spent years telling people that there was no alternative to difficult decisions, yet when it comes to their own priorities, they make the promise and leave somebody else to deal with the bill. That is not fiscal responsibility; it is fiscal incontinence.
Their priorities are clear when we look at the two-child limit. The Conservatives indicated that they would reinstate a policy that would push 500,000 children back into poverty. At the same time, they want to direct a substantial tax benefit towards a tiny number of wealthy estates. The contrast is clear: they tell families on low incomes that the country cannot afford to help them, but they propose billions in tax cuts for the very wealthy. That is a choice, and it tells us who they put first in our society.
Dr Johnson
What proportion of people working in the private sector on low wages are employed by people who own businesses?
Tim Roca
As they say in “Father Ted”, that is an ecumenical matter. I am sure that the Minister will pick it up in his wind-up.
Labour Members have done a great job of outlining the fantastic measures that the Government are taking, including measures on VAT and electricity bills, capping bus fares and 24-hour bus travel for disabled people from next April, so I will not touch on those. I will finish on what has—I hope—been the main theme of my speech. Today is all about one thing: tax cuts for the wealthiest, cuts to public services for everyone else. It is the same old Conservatives. They have not changed at all.
Victoria Atkins (Louth and Horncastle) (Con)
As I have listened to this debate today, I too have been reminded of the chilling words describing Labour MPs by their own Work and Pensions Secretary:
“Every meeting I have is ‘who can we tax in order to pay benefits to others’.”
This debate today once again sets out the battle of ideas between the welfare party and the Conservatives. This is the eighth vote the Conservatives have forced on the family farm and family business taxes since the disastrous first Labour Budget of broken promises. In that time, we have seen off a Prime Minister, a Chancellor and two DEFRA Secretaries of State, and discovered that one DEFRA Minister views black Labradors, warm ale and pubs as a far-right fantasy.
We have also shown the power of rural and coastal communities, because through their protests here and across the country, the heartrending stories we have heard from families of the terrible discussions and decisions they have had to make in order to avoid this vindictive death tax, as set out eloquently by my hon. Friend the Member for Keighley and Ilkley (Robbie Moore), and the pressure we have exerted here in Westminster, we forced the Government into one of their most humiliating U-turns. There have been many, but this one was humiliating: their partial U-turn on these vindictive taxes.
We are forcing another vote today, ahead of Budget, because we know the damage that these vindictive taxes continue to cause to the rural economy. We know that this Government have overseen the highest number of farms closing on record in a year—shameful. The Financial Secretary did not admit that.
We also know, as my hon. Friend the Member for Dumfries and Galloway (John Cooper) has set out, that the 10-year payment scheme that the Government keep talking about applies only if the estate is able to make the first payment within six months of the death, probate having been settled. Does anyone know of such a scenario in their own constituencies? This means that the 10-year payment plan is nothing but warm words from those on the Treasury Bench. It is an absolutely impossible condition to fulfil for the overwhelming majority of family farms and businesses that will be hit by these taxes.
The Financial Secretary also did not acknowledge that investment in rural economies has dropped off a cliff. [Interruption.] He is not listening, but he might want to do so. In a recent Country Land and Business Association survey, nearly nine in 10 rural family businesses stated that they have paused investment; in fact, 85% say that the current threshold of which the Financial Secretary is so proud is not enough to cover the value of their business, given the cost of machinery and livestock and the other business costs imposed by this Government. Of course, two pubs are also closing every day under this Government. In short, rural communities cannot afford Labour.
Despite their protestations over the past two years, every single Labour MP has voted for the family farm tax and the family business tax multiple times; only one had the courage to vote for his constituents. There is one other who did not: the Prime Minister, because he was not in Parliament at the time of the other votes. He knows that Labour has a rural problem, though. He has said that he recognises that the Government have a
“long way to go to build back trust”
with the farming community across the country.
It is therefore a shame that today of all days, the Prime Minister has put another tax on family farms—the fertiliser tax. And every Labour MP voted for it. Again, the Work and Pensions Secretary was right. This is another hammer blow to British farming, only weeks after the shambolic handling of the sustainable farming incentive, the collapse of the Government’s environmental policy and the Prime Minister’s botched response on how his deal with the EU will, in fact, favour foreign farmers over British farmers and hand control over our food laws to the European Union.
In the battle of ideas today, we have heard some superb speeches from the Conservatives Benches. My hon. Friend the Member for Central Suffolk and North Ipswich (Patrick Spencer) painted a picture of the many local pubs and black Labradors in his Suffolk constituency—the DEFRA Minister may wish to take note. My hon. Friend the Member for Bromley and Biggin Hill (Peter Fortune) set out sound economic analysis, even if he admitted that his cricketing skills are not quite what they should be. My hon. Friend the Member for Mid Bedfordshire (Blake Stephenson) set out a description of the Labour party that I think hits home almost as much as the words of the Work and Pension Secretary: Labour is the party that taxes aspiration. This vote tonight is the proof of that.
My hon. Friend the Member for Bridgwater (Sir Ashley Fox) made an excellent intervention about the fact that the tax focuses only on British family farms and family businesses and does not affect foreign owners of farmland. Perhaps the Minister will explain how it is fair that foreign farmers should not pay this tax but British farmers should do so.
We heard other excellent speeches, including by my hon. Friends the Members for South West Hertfordshire (Mr Mohindra), for Keighley and Ilkley (Robbie Moore), for Rutland and Stamford (Alicia Kearns), for Farnham and Bordon (Gregory Stafford), for South West Devon (Rebecca Smith), for Solihull West and Shirley (Dr Shastri-Hurst), for Broxbourne (Lewis Cocking), and for Runnymede and Weybridge (Dr Spencer), who described Labour’s approach to taxation as “asset stripping our country”.
Let me turn to some of the speeches from the Labour Benches. We heard from the hon. Member for Welwyn Hatfield (Andrew Lewin), who by the way voted for the family farm and family business tax seven times—tonight will be an eighth—and the hon. Member for Macclesfield (Tim Roca), who only voted for it three times. I am sure his farmers are so happy about that. Both of them asked, “What can be done to help those who are not yet on the housing ladder?” I am delighted to tell them that the Conservative party has the answer. We will be scrapping—
Victoria Atkins
No, if the hon. Gentleman sits down—[Interruption.] I have some words about his AI-generated speech in a moment.
The Conservatives have the answer: we will scrap stamp duty on primary residences. That is how we help people back on the housing ladder. The hon. Member for Macclesfield also described his own constituents who want to pass on their family homes or family businesses to their children as the “idle rich”. I hope that was just the AI.
Victoria Atkins
I will, and I genuinely hope that he will explain his “idle rich” comment. Go on.
Victoria Atkins
That will not plough any furrows with the farmers in the hon. Gentleman’s constituency whom he has just described as the “idle rich”. What is more, he has got his figures wrong. He keeps throwing these figures around, but in fact that Tax Policy Associates think-tank that so many Labour colleagues seem to rely on has said that by the end of this decade one in six families will pay inheritance tax—many of them in his constituency, which I know well.
The hon. Member for St Austell and Newquay (Noah Law) voted for the family farm and family business tax only a mere six times—he missed one of them—but he had the bright idea that farmers should get life insurance and planning advice. How on earth are farmers in his constituency on an income of around £20,000 a year going to afford that? It is yet more business taxes.
We also heard a reliance on Dan Neidle and his organisation Tax Policy Associates. I merely make the point, so that it is open and transparent, that Dan Neidle is a senior member of the Labour party and served for three years on its disciplinary committee.
The Conservatives are setting out the tough decisions to cut spending and help hard-working families up and down the country invest in their businesses and homes, ready to hand over to their families. People who have worked hard, paid their income tax, lived within their means and saved have not done so in order for the current Labour Chancellor to tax that all over again. They have done so because they have a deep desire to leave something to help the next generation prosper when they are no longer here.