Business Property Relief and Agricultural Property Relief

Will Forster Excerpts

Thursday 17th October 2024 Westminster Hall

[Mr Will Forster (Woking) (LD)]

Wanting to leave your children something is a natural part of being a parent. Right now, inheritance tax is quite unfair. Families face a tax rate that is very high by international standards. Tax-free allowances have been frozen for some time, while house prices and inflation have gone up significantly. It is understandable that people I have met on the doorstep in Woking over the years have said that they are worried about their family being caught by that tax, even though they are by no means wealthy. Meanwhile, economists and policy experts have expressed concerns about the ways in which inheritance tax reliefs can be used. The aim of business property relief is to make sure that family businesses can pass from one generation to the next. I hope everyone here would agree that that is a worthwhile aim.

Woking is a town teeming with family businesses. We all have family businesses in our constituencies that are near and dear to our constituents and that enrich our areas not only economically but culturally, making them unique. We need to ensure that those family businesses are genuinely protected by new rules, so that they can continue from one generation to the next, and we need to ensure that they are genuinely sustainable so that the stewardship of the history and heritage of our local areas is maintained.

Experts point out that certain provisions within business property relief are not particularly well targeted at local family businesses or small businesses, which are usually the ones in most need of support. For example, it has been noted that 100% relief applies in the same degree to businesses of all sizes, from large corporations worth several billion to micro and small family shops or farms. There are also questions about accountancy practices that can give certain financial portfolios the same treatment as a local family-owned shop, pub or manufacturing business. I would welcome the Minister’s thoughts on these issues and on how the Government envisage supporting cherished family-owned companies that champion the heritage and local economy in my constituency and elsewhere.

It is equally important that family-owned farming businesses, which have been the focus of most contributions to this debate, be preserved and protected. Farming is vital to our rural communities, providing the foundation for our whole economy and our food security. We need to have the raw materials and to guarantee safety; s we live in a more dangerous world, we need to be able to feed ourselves. I would like to hear the Minister’s views on how we can continue to support agricultural businesses, ensuring that they continue to operate as family businesses, creating jobs and adding value to their area. I also urge him to recognise the contribution of our farmers practically by accelerating the roll-out of the new environmental land management scheme, properly funding it with an extra £1 billion a year to support profitable, sustainable and nature-friendly farming.

After years of Conservative chaos and neglect, there is no doubt that our NHS and social care, our schools, our local authorities and our other public services desperately need more investment, so I can understand why the Government may look at different options for raising revenue. Our GPs are overstretched, our hospitals are overcrowded and our school buildings are crumbling, but at the same time families and pensioners are struggling with the rising cost of living.

The Conservatives put up their taxes by freezing tax thresholds for years. It would be wrong to ask residents to pay again to clear up the Conservative mess. The Liberal Democrats would therefore focus tax changes on making the system fairer, such as by reversing the Conservative party’s tax cuts for big banks and imposing a proper windfall tax on the super-profits of oil and gas companies. Responsible public finances are essential to the stability, certainty and confidence that drive economic growth, and to getting mortgage rates under control.