Contribution
I will follow on from my hon. Friend the Member for Farnham and Bordon (Gregory Stafford), who set out a huge amount of what I will talk about, not least about the constant referral to the wealthy that we have heard in this debate. Frankly, it is offensive to any person out there who is working and, in many cases, not earning very much money, but saving a lot of it and working tirelessly to be able to buy a property, to invest in a business and to do the right thing.
Frankly, the one thing that I will take away from this debate is the massive generalisation that anyone we represent is somehow wealthy, and anyone Labour Members represent is somehow not. It is a complete fallacy, and it shows a complete disdain for working people. Indeed, we heard the hon. Member for Hornsey and Friern Barnet (Catherine West) imply that anyone who was not relying solely on the state pension was earning a lot, which is preposterous.
Buying a home is the biggest financial commitment that many families will ever make. It involves decades of saving, mortgage repayments and sacrifices along the way. The Conservative pledge to abolish inheritance tax on the family home would ensure that families were not penalised for passing on the home that they had worked so hard to own, often at the expense of doing other things. We know full well that people on benefits are able to get all sorts of discounts. It is the hard-working families across the country who do not go to theme parks at discounted rates, because they are paying a mortgage or, indeed, saving for one in the first place.
We will also raise the general inheritance tax allowance to £500,000 per person, or £1 million for a married couple. Crucially, this increased allowance will also benefit those who are unmarried or do not have children. Currently, a single person has an inheritance tax limit of only £325,000, which I think is completely wrong. There are many single people out there who work hard, and who sometimes have money that they have themselves inherited and on which they have also paid tax at multiple points. I hear from single constituents on my patch who are just so frustrated at being expected, time and again, to pay tax in order to pay for everyone else. Our proposal would give them greater freedom to leave more of what they have earned to the people who matter most to them, whether that person is a sibling, a niece or nephew, or another loved one.
As I have said, this is not about the very wealthy who already use trusts and other mechanisms to protect their assets. This is about helping normal families who have seen the price of their family home shoot up over the years, tipping them over the threshold for inheritance tax through no fault of their own. Indeed, in my own Conservative constituency—the so-called wealthy area South West Devon—the Plymouth median salary is £36,500 pounds. Plymouth is generally seen as being quite poor, but in the West Devon and South Hams part of my constituency the median salary is between £26,500 and £30,000. These are hardly wealthy people. As my hon. Friend the Member for Harborough, Oadby and Wigston (Neil O’Brien) has rightly said, inheritance tax has
“become a tax for normal people who live on new build estates, not fancy people who have estates.”
Just 2.7% of homes were faced with an inheritance tax bill in 2009-10, but that could rise to 8.2% in 2029-30, according to research by Oxford Economics.
This issue is particularly relevant in the South Hams part of my constituency, where the average home costs £355,000, the third highest figure in the south-west. In Wembury, Brixton and Newton Ferrers, the median property sold for more than £360,000 in the last year, rising to more than £520,000 for detached homes. In Ivybridge, a property was recently sold for almost £420,000. Many of these properties were bought decades ago for considerably less, yet the basic inheritance tax threshold has remained frozen. Others have already mentioned the pension increase whereby pension funds will be included in inheritance tax calculations.
Scrapping inheritance tax on family homes is about strengthening the social contract, which is, in the great words of Edmund Burke, the indivisible bond between those who came before us, those who are here today, and those who will follow. Conservatives want to protect that partnership. We are backing parents who save responsibly and want their children and grandchildren to benefit from the sacrifices that they have made.