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Finance Bill

: First, I would like to declare a disinterest in the sense that I have never created such a trust or been a beneficiary of one, so I believe that I can be perfectly objective about the subject. Secondly, I acknowledge that I have taken part in debates on these matters before and disagreed with the Paymaster General on her definition of retrospection. I retain that belief, but I took from that debate her genuine intention to ensure that people who had perfectly reasonably entered into a perfectly proper legal undertaking would be able at least to disengage themselves from it. Although that did not overcome the problem that they would not have made the initial decision all those many years back had they been told that the terms of the agreement would be subject to retrospection, it did at least solve the problem of retrospection in the sense that, previously, they were punished for finding themselves in their current circumstances. I agree with my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) that, since then, the Paymaster General has shown herself willing to try to maintain her position. I want to refer to three main points. First, it does not seem to me to be in any sense unpleasant to seek to allow one’s children to live in the house in which they have been brought up, whereas I think that there is something wrong with a taxation system that does not view that as a natural activity. I believe that in most cases, if not all, people will already have paid tax on the money that they have invested in their houses. It is not as though they are perpetuating a non-taxable value: they have paid tax, spent money on the house and brought up their families in it. I have no difficulty in saying that there is nothing dishonourable whatever—indeed, I think that it is very honourable—in people wanting to allow their children to continue to live in that house. Secondly, we should accept that the increase in house prices has meant that many who live in houses that are now caught by inheritance tax do so in circumstances in which they are not themselves very wealthy. They are capital rich, but may not be that well off in current terms. The children who are to inherit the house often find, for the same reason, that it is the only chance that they will ever have to live in a house of their own. They may be financially involved in the house already and may have continued to live in the house with the objective of allowing their children, in turn, to live in it. It is neither wicked nor a mark of extreme wealth to seek to achieve such a sensible end. Indeed, it is often a mark of someone who has used his taxed income properly. That becomes even more important when people do not get any mortgage relief—tax relief on the mortgage costs that people have to pay. Thirdly, many would say that a sensible tax regime would exclude the family house in any case. I personally take the Belgian view in believing that there should be no inheritance tax at all. I believe that it is the wrong way of taxing and that there are many preferable ways of doing so. I would replace it with something different, which is not at all unreasonable. It is clearly an attractive option because Belgium attracts a large number of French people to live under its tax system. For many people, the ability to hand on what they have earned to their children is much of the reason for earning it in the first place. It is a dangerous thing for a society that does not encourage such continuity and that sort of enterprise.