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The noble Lord, Lord Burnett, emphasised that this issue is more acute in the south-east. This House is often very strong in its advocacy of south-eastern issues and interests. But we are, after all, the second House in this Parliament and we have an obligation to take things in the round across the country. I concede that there is a problem of rising house prices in the south-east. How great is that problem? Last year the median price for London was £250,000 and for the south-east region as a whole, £210,000. That is a narrower margin than applies in the rest of the country but it is nevertheless a margin of real wealth before the tax begins to bite. We need to get the matter in perspective.
The noble Lord, Lord Burnett, was rightly challenged by his own Front Bench, who are careful about the implications of reducing the potential take from inheritance tax. The total tax take is worth 1p on income tax. That is a pretty substantial figure. It behoves those who advocate a substantial reduction in inheritance tax—I think that was the burden of the remarks of the noble Baroness, Lady Noakes—to say where the resources are meant to come from.
The approach that the noble Lord, Lord Burnett, suggested in a number of other areas might minimise the significance of current reliefs. The 100 per cent reliefs for business and for agricultural assets are of great significance and play their part in building up business. That is a reflection of the obvious fact that we are concerned to sustain our productive capacity in this country. Therefore, we ensure that people can continue to invest in certain assets and that those assets will be carried on beyond their lifetime.
The noble Lord, Lord Burnett, mentioned the hoary old tale of this measure being double taxation. No Government recognise the concept of inheritance tax being double taxation. Is VAT double taxation because we all pay income tax as well? Of course not. The issue of inheritance tax cannot surely have a unique quality—
Lord Burnett: My Lords, I am happy to say that I did not refer entirely to the south-east of England. I wish that the Minister would advert to what I did say. It is about the prospect of high yield on this tax and many millions of people being caught by it in the future. It is not just a south-east phenomenon. In addition, the point about double taxation was a minor point. I made that clear in my speech; it was not the main thrust. It is an unfair tax, and I hope that he will deal with that.
Lord Davies of Oldham: My Lords, I understand what the noble Lord says; I was not suggesting that it
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I heard what the noble Lord said about reforms with regard to the tax and how its incidence can be eased, but he will appreciate that easing taxation costs money. I hear what he says about there being a little less avoidance of the tax. There would be an element of that, but, as he rightly says, the problem with inheritance tax is that those with very great resources are already able to deploy their advice and their strategies to reduce the burden and often to avoid it altogether. We do not think that there is a huge increased potential from graduation of the bands, but I hear what he says on that. I also heard that the noble Lord, Lord Newby, was by no means convinced of that argument.
The noble Lord, Lord Sheikh, also emphasised the house price issue. I merely indicate that I hope I have given him some satisfaction in recognising that of course we are aware of house price inflation, but we are by no means persuaded that that represents an
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The noble Baroness, Lady Noakes, talked in general terms about the impact of the tax, but she was also concerned about the savings ratio. The savings ratio in this country at present is similar to the 1960s. No past Government have pushed people into saving in more successful ways than we ourselves have done, through the reduction in unemployment and the control of inflation—the two factors most conducive to people saying that the value of their money is safeguarded and that, if they have the security of a job, they have the ability and the incentive to save.
We have had a most interesting debate. It is a late hour. The noble Baroness, Lady Noakes, is right: we would have had a much more extensive debate had we had it at another time during the parliamentary day. I look forward to a time when we will have exactly that opportunity.
Baroness Farrington of Ribbleton: My Lords, I beg to move that the House do now adjourn, and in moving that Motion, I place on record our gratitude to the staff who have stayed later than expected, including the Hansard writers.
Moved, That the House do now adjourn.—(Baroness Farrington of Ribbleton.)
On Question, Motion agreed to.
- House adjourned at 8 pm.
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