Contribution
My hon. Friend is absolutely right, and she neatly brings me on to some comments about family farms. She is right: it is not just the people who are running these businesses or those people who might inherit them who will end up losing out, but the employees of those businesses too. That is why we are not getting the growth that Labour claims it wants.
With family farms such as Luff’s in Headley, the land, tractors, buildings and a lifetime of labour are passed from generation to generation. The National Farmers Union has calculated that a typical cereals farm making roughly £34,000 a year would face 10 annual instalments of £53,000 a year at the original £1 million threshold. Even at the new threshold, payments of £33,000 a year would swallow nearly all the profit. Essentially, in order to pay, a farmer will have to sell the very fields that earn the living.
The Royal Agricultural Benevolent Institution found that more than a third of farmers are probably or possibly depressed. The Farming Community Network, which supports more than 10,000 people, says that its helpline has been taking calls linked to the upcoming Budget for weeks. As my hon. Friend the Member for Keighley and Ilkley (Robbie Moore) said, this tax has led to suicides. That is a disgrace, and the Government should recognise that and do everything they can to repair the damage that they have done emotionally and economically to our farms. It was only when Ministers were challenged by the shadow Environment Secretary, my right hon. Friend the Member for Louth and Horncastle (Victoria Atkins), that they raised that threshold. If it was right to raise the threshold then, because it was the wrong threshold, can the Government not look at it again and remove it?
Moving on briefly to the general inheritance tax points, the nil rate band has been at £325,000 since 2009. Labour has now said that it will freeze it until April 2031. Had that band risen with inflation, it would be at more than half a million pounds today. To dispel the myth that has been put forward by the Government that inheritance tax affects only a small number of people, the OBR expects one in 10 estates to pay by the end of the decade. The Institute for Fiscal Studies puts that figure at one in six. It will not hit just a small number of people.
A married couple can pass on up to £1 million if their home goes to their children. That might sound generous, but once we add a family home in my constituency to a lifetime of savings and, from April 2027, their pension pots, it is not a significant amount of money in the grand scheme of things. That is especially important when that pension relief is what we on all sides of this House were telling people to do. We were telling people to save for their future, and the reward for their saving is the Government taking more of it in tax. Households that never thought of themselves as wealthy are being pulled in. Under Labour, aspirational families are hit on the way in and unfortunately they are hit on the way out. As Members have said, the shopkeeper will sell their business to fund retirement and the farmer will sell the fields to try to keep just a small measure of their farm.
The Minister on the Treasury Bench must take this message back to the Chancellor: rule out these changes and make things better for our local areas. As the Conservative Opposition, we present an alternative. We will abolish tax on the family home, and we will do that by slashing the welfare bill by £7 billion. It is the first step, and the shadow Chancellor and the Leader of the Opposition have outlined their ambition to go further.
It comes down to a fundamental point. On the one side, we have a Government who see a lifetime of savings and a business built over generations as just another tax opportunity. On the other, we have an Opposition who believe that those savings belong to the family who earned them—not the grifters, not the idle rich, but the grafters. They built this country, and unlike Labour, a Conservative Government will let them keep those savings.