Mansion House Accord

Debate between Torsten Bell and John Glen

Tuesday 13th May 2025 Commons Chamber

[Torsten Bell]

My hon. Friend is absolutely right. She has long talked about both the issues that she raises: the regional balance of investment and the ability of growing firms to get hold of growth finance. The latter is a long-standing problem in the UK economy, and today’s accord will help to address it. Although we talk about private assets and investment helping with infrastructure, it is also about providing growth capital to a wider range of firms. Obviously, the onus is on us and private asset managers to provide ways for pension funds to direct capital. Those are often small-ticket items, and pension funds will need them to be aggregated up to a higher level. That is exactly the work of the British Business Bank, which I know she has engaged with through the Select Committee. On both points, she is 100% right.

[John Glen (Salisbury) (Con)]

Undoubtedly, the City of London is not in the best possible place when it comes to where it is investing and the amount invested in UK equities. When I was a Minister, we had the Hill review, the Kent review, the Austin review and the capital markets review. Everything was done to seek to open up the City to more initial public offerings and more momentum. This systemic undervaluing of UK equities, and therefore the lack of investment in them, needs to be set alongside the fact that billions of pounds of taxpayers’ money is used to enrich the size of pension schemes through tax reliefs. I urge the Minister to continue engaging with the City. I welcome the voluntary commitments given, but we must come to the point where the risk-aversion of DB schemes is called out, considering the amount of taxpayers’ money that is effectively going into them. Will the Minister continue to look carefully at the options available, given that the previous Government sought—and his Government will no doubt continue to seek—to meet them wherever possible?

[Torsten Bell]

I always enjoy discussing these things with the right hon. Member, as we have done over recent months. He offers a recognition of the challenge facing the country, and in focusing on what we can do to start changing things, he takes a much better position than that adopted by his Front Benchers.

I recognise the right hon. Member’s point about risk-aversion. There is a need for more innovation in our pension landscape more generally—that is one of the areas in which I am glad to see progress. I take a slightly more positive view than he does on the consensus that things need to change. We are seeing that in the pensions industry more generally, partly in relation to investing in a wider range of assets, as well as in embracing the agenda that we are setting out for a smaller number of bigger pension funds that are able to take different kinds of risks.

The right hon. Member asks specifically about public equities. My view is that the accord from the industry today will support that by funding a pipeline of companies that can grow to the level at which they can list publicly. Also, private assets will include private shares, including the alternative investment market and others. I think the picture is slightly more positive than the one he paints, but I am not hiding from the wider question he raises about capital markets. The UK Government, the Chancellor and my colleague the City Minister are focused on that—he will have heard their words on ISA reform and the rest of it. I look forward to further conversations on that.

Agricultural Property Relief

Debate between Torsten Bell and John Glen

Tuesday 28th January 2025 Westminster Hall

[The Parliamentary Secretary to the Treasury (Torsten Bell)]

It is a pleasure to speak in this debate with you in the Chair, Mr Stringer. I congratulate the hon. Member for Caerfyrddin (Ann Davies) on securing this debate and for engaging with many different pronunciations of the name of her constituency over the course of the last hour and a half. She rightly makes a powerful case for Welsh farming, which all of us in south Wales would like to reinforce.

We will not all agree on the policy under discussion today, but we all agree that topics such as this are important to many and should be properly discussed in this place—ideally at a lower temperature than in this room. I have listened closely to the contributions to the debate, and I thank all hon. Members for setting out their views and for speaking on behalf of not only their constituents, but their acquaintances, friends and family members. The hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) made a clear case about the emotional, not just economic, importance of land to farmers and farming families. Most of us will have someone close to us who farms, but even those who do not will recognise the huge contribution that our farmers make to our food security, our economy and our rural communities. None of us takes those contributions for granted, and we have heard that today.

Before I turn to the specific points raised by hon. Members, I will briefly—I promise it will be brief—set out the context for the Budget decisions we are debating. This Government’s inheritance matters, however much the hon. Member for Keighley and Ilkley (Robbie Moore) declines to mention it. We had unsustainable public finances, equally unsustainable and struggling public services, councils going bust and prisons overflowing, so tough decisions were unavoidable in the Budget if we were to restore economic stability, fix the public finances and support public service. That is the backdrop to the decision to reform agricultural property relief.

That decision was not taken lightly, but it was a necessary decision, not least because rural communities lose out more than most when health, transport and council services across the UK do not live up to the standards that any of us expect. It was the right decision, because the Government will maintain significant levels of inheritance tax relief for agricultural property, far beyond what is available for most assets, because we recognise the role that those reliefs play in supporting farmers.

The debate is really about how we balance the objectives of protecting family farms with the public finances and public services. The status quo—the full, unlimited exemption introduced in 1992—has become unsustainable. The benefits have become far too heavily skewed towards the wealthiest estates. Some 40% of agricultural property relief benefits the top 7% of estates making claims. The top 2% claim 22% of the relief, which means 37 estates are claiming £119 million in a single—

[John Glen]

The Minister is a serious economist with a serious track record in analysing public finances. With all due respect, given the significant uncertainty and the fact that numerous organisations representing farming interests outside the party political debate have asked serious questions about the deliverability of the scheme and the amount of money that will be raised, surely he must accept that there is time for people such as he to work with officials to find better ways of finding the sums that he says he needs—I am not disputing that—to do the right thing by the farming communities of this country and not cause the unintended damage that will clearly take effect.

[Torsten Bell]

I thank the right hon. Member for his kind words, even though I cannot agree with everything that followed. I will come on to some of the points that he raised shortly. I think this will come up several times in the course of what remains of the debate, but we cannot use farm valuation data to make claims about inheritance tax claims. On the latter, we have the actual data for the claims made, which is what we rely on.