Inheritance Tax

Zarah Sultana Excerpts

Wednesday 17th January 2024 Westminster Hall

[Zarah Sultana (Coventry South) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Robert. I congratulate my hon. Friend the Member for Hemsworth (Jon Trickett) on securing this important debate.

For the vast majority, the past few years have been a time of unprecedented economic pain. Bills have rocketed, the supermarket shop is getting more and more expensive and, for so many, keeping their houses warm is unaffordable. Families are struggling to keep a roof over their heads and food on the table. Constituents in Coventry South and across the country are having to choose between heating and eating. The Office for Budget Responsibility says it is the biggest hit to living standards since records began. Yet while it is a cost of living crisis for many, things have never been so good for the wealthy few.

In the past decade, Britain’s billionaires have seen their wealth go up threefold. It now stands at £684 billion. The 50 richest families in the UK have more wealth than the bottom half of the population. As I have said many times before, the problem is not that there is not enough wealth in this country; it is that the super-rich have hoarded all the wealth.

That brings me to today’s topic. While the majority are struggling like never before, the wealthy few have never had it so good. It is reported that the Conservative Government want to introduce a tax cut that would overwhelmingly benefit the very richest. Roughly 5% of deaths result in inheritance tax being paid, and according to the Institute for Fiscal Studies, abolishing this tax would hand the richest 1% of estates more than £1 million each. Another study found that it would disproportionately help people in Conservative-held constituencies, particularly in the south-east and London. It is therefore little surprise why that is the tax Tories want to slash, in a move that would cost the public purse almost £15 billion by 2030.

Slashing taxes for the richest and squeezing incomes for the rest is the opposite of what we should be doing, but there is another way to go about it. We could tax the richest and fund our schools and hospitals. An annual wealth tax of just 1.5% on assets over £10 million, for example, would raise about £12 billion a year. Equalising capital gains tax with income tax rates would raise another £15 billion a year. Introducing a windfall tax on bank profits could raise £20 billion in a year—I hope the Minister is making notes; these are good suggestions. Ending the nom-dom tax break for the super-rich would raise a further £3 billion. That is money that could be invested in our communities, reversing Tory austerity and rebuilding our crumbling services. This failed Tory Government have failed to do this and will not do it for the remainder their time, but it must be the mission of the next Labour Government.