Starmer's family business death tax won't help keep us safe

Telegraph

2 days ago

To govern is to choose. And this week we have heard ad nausem from Sir Keir Starmer about the tough choices he claims he is having to make to fund our islands' defence.
Or rather presumably would have to make in order to get to a firm 3 per cent of GDP in this Parliament rather than the equivocal 3 per cent at the end of the next one he will not even commit to.
But amidst the menu of choices, like the Chagos surrender costing our forces £100 million a year, there's one very easy choice that would pay back on many levels. To reverse his family business (and family farm) death tax.
This prejudiced decision may turn out, according to new analysis, to cost more money than it raises, punishes aspiration and risks wiping out centuries-old businesses in a single parliamentary term.
New independent research published by CBI economics confirmed in another example of Rachel Reeves 's dodgy accountancy that this one tax will put 200,000 jobs at risk and lower the size of the wider economy by £15 billion. The Prime Minister must not go ahead with it.
Family businesses represent years of work, skills and investments made, passed down carefully through generations. They currently receive relief on inheritance tax when passing it down to the next custodians.
This is a feature introduced by a previous Labour government to ensure the success of a constituent part of the economy providing 14 million jobs in the UK.
But this is an anti-business government, driven by what works in socialist screeds rather than the shop floor. So, it's no wonder Starmer and his ministers are intent on attacking them.
'Working people will pay the price'
The Cabinet don't have any real business experience between them – the Business Secretary [Jonathan Reynolds] embarrassingly lied on his CV even about being a qualified lawyer – and it shows.
Labour came into the general election promising not to tax working people, but that is exactly what they are doing. This is a small business death tax, which will be paid for in the jobs of working people.
While some businesses' assets may be valuable on paper, they don't equate to hard cash.
There are plenty of family businesses for whom being forced to sell assets (like machinery) on the factory floor will mean emptying the factory floor. They're asset rich but cash poor – and they'll be forced to shut up shop.
This is the latest in a long line of decisions aimed squarely at punishing wealth creators and risk takers by a government that at the most charitable interpretation doesn't know about business interests, nor foresee the outcome of their assaults on business.
All the more reason to listen when independent forecasters say your numbers are wrong.
More shockingly, what started as a pre-election prawn cocktail offensive aimed at charming business has become an all-out war on private enterprise.
Because this is only the start. The Employment Bill, which will do the exact opposite of what it says on the tin, is costing businesses £5 billion and allows trade unions to reconquer private businesses.
Many of those who won't be able to cope with its hundreds of pages more regulations will be the same small, family businesses already suffering under the burden of the death tax.
As part of my role as shadow business secretary, I have been going around the country engaging with businesses from the biggest automotive firms to village shops.
'Millionaires are fleeing UK'
All seriously worried about what this government will do next. It is no wonder that there has been an exodus of wealth creators since Starmer has taken office.
Last year, over 10,000 millionaires fled Labour's socialist attacks on businesses and wealth creators.
The tax bills they took with them are the equivalent of losing 300,000 average taxpayers.
These are ambitious, courageous people, many of them entrepreneurs who have choices – and they're not choosing Labour's Britain.
These people create jobs, drive growth, and pay for our public services. We will all be worse off without them.
But still, Reeves dogmatically ploughs on, not paying attention to the warning lights on the dashboard flashing red or the millionaires leaving every 45 minutes.
It is a stark reminder of what socialists are capable of when they get their hands of the levers of power.
The Conservatives understand family businesses and wealth creators because so many of us have worked in the private sector.
While other parties fight over who can spend the fastest more taxpayers' money we cannot afford, we continue to advocate for government that spends only within its means and balances its books without fiddling the rules.
That means making the genuinely tough choices that will prioritise defence over ballooning welfare costs.
We know that those who start businesses are taking a risk. We need to create a society where people aren't afraid to fail and are rewarded for those risks when they pay off.
At the very least, those who start family businesses should know that they are able to pass their business down to the next generation.
Unless the Prime Minister sees sense soon, Britain's legion of quietly successful family business will be consigned to the dustbin of history and our future with them.