Labour faces fresh calls to U-turn on inheritance tax changes after new report.
Chancellor Rachel Reeves unveiled the changes at the autumn budget (Image: Getty)
Labour‘s inheritance tax raid on farmers and other family businesses risk hundreds of thousands of jobs and a £15 billion hit to the economy, new research warns. Family Business UK said the controversial changes announced at the autumn budget will hit every sector of the economy and every region of the UK.
Its analysis found that the overhaul could lead to 208,500 job losses by the end of this Parliament, as well as £14.86 billion less economic activity Tory shadow chancellor Mel Stride said the research should be a “wake-up call” to Chancellor Rachel Reeves.
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He added: “Labour’s raid on family businesses risks hollowing out the backbone of our economy.
“From farms in Yorkshire to factories in the Midlands, family businesses face punishing uncertainty. The Chancellor must urgently rethink these plans and work with industry to protect jobs, investment, and the future of British enterprise.
“You can’t tax your way to growth. As an entrepreneur, who has built businesses from scratch, I know it’s business that creates prosperity. Labour’s front bench doesn’t get it because they lack any real-world business experience. We can’t afford Labour.”
The Government has faced an ongoing backlash for limiting the 100% Agricultural Property Relief (APR) and Business Property Relief (BPR) to a combined £1 million.
The move has sparked outrage from farmers and other family businesses who fear they will no longer be able to pass on their lifetime’s work.
Neil Davy, CEO of Family Business UK, said: “This latest research shows just how far-reaching, and immediate, the impact of these policy changes is. No industry, sector, region or parliamentary constituency will be immune.
“In construction, services, manufacturing, tourism, transport, agriculture and horticulture, family business owners are responding to the changes to BPR and APR by tearing up long-term plans to invest in their businesses, their employees and the communities in which they are based.
“While parts of government are looking at how to boost regional growth and create opportunities in every sector of the economy, this research shows how changes to BPR and APR will achieve the exact opposite.
“Within our diverse and rapidly changing economy, family business owners have been building Britain for generations. If they are to continue to do so, with confidence in the future, the Government must urgently reconsider these policy changes.”
The research, conducted by CBI Economics, involved almost 4,200 family businesses.
It comes as the Daily Express has been campaigning for a U-turn with our Save Britain’s Family Farm crusade.
A Treasury spokesperson said: “Our reforms to Agricultural and Business Property Reliefs will mean three quarters of estates will continue to pay no inheritance tax at all, while the remaining quarter will pay half the inheritance tax that most estates pay, and payments can be spread over 10 years, interest-free. This is a fair and balanced approach which helps fix the public services we all rely on.
“Capping the rate of corporation tax, reforming planning, establishing a National Wealth Fund and creating pension megafunds is part of our Plan for Change to get Britain building, unlock investment and support business so we can raise living standards and make all parts of the country better off.”
