Starmer's family business death tax won't help keep us safe
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.
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.
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.
Andrew Griffith is the Conservative shadow business and trade secretary
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This came as compulsory social contributions, which include National Insurance (NI) payments, increased by £2.6bn to £16.3bn. The Chancellor increased the NI rate for employers rose from 13.8pc to 15pc in April following changes in October's Budget. She also lowered the threshold at which businesses must pay the tax from £9,100 to £5,000. Meanwhile, the Government also saw a £2.7bn rise in self-assessed income tax receipts to £15.5bn. 08:57 AM BST Reeves warned mansion tax risks backfiring Rachel Reeves has been warned that a 'mansion tax' risks backfiring and could raise little or even no money. The Chancellor is reportedly considering charging capital gains tax on the sale of homes worth more than £1.5m, as she scrambles to fill a hole in public finances that economists fear could be as large as £50bn. However, Andrew Wishart, an economist at Berenberg Bank, said a raid on wealthy homeowners could ultimately fail to raise the money she needs. He said: 'It is going to incentivise people to not sell, to try and hold to the next election, to see if it changes. Therefore, it might not generate any additional revenues at all.' 08:39 AM BST Reeves 'shouldn't get carried away' with July boost Rachel Reeves has 'shouldn't get carried away' from the latest borrowing figures, despite an improvement in the public finances during the month of July. The current budget managed a surplus of £3.3bn in July, the ONS said, which was £1bn better than the OBR forecast earlier this year. However, Britain's total current budget deficit – borrowing to fund day-to-day public sector activities – has climbed to £42.8bn since April, which was £5.4bn higher than during the same period in 2024. Thomas Pugh, an economist at RSM UK, said the July figure, which matters for the chancellor's fiscal mandate, is 'much less positive than the headline numbers suggest'. 'The bigger picture is that public borrowing has been roughly in line with the OBR forecast this year, but U-turns on spending cuts and a likely downgrade to the OBR's growth forecasts mean the chancellor will probably have to raise around £20bn at the budget in the autumn,' he said. 'The good news is that with interest rates likely to be around 4pc at the time of the budget there is plenty of scope for the Bank of England to cut rates to offset the impact of any fiscal consolidation on the economy.' 08:23 AM BST Britain's finances 'chronically weak' as Reeves plans tax rises Britain's public finances remain 'chronically weak' as Rachel Reeves prepares to raise taxes in the autumn, economists have warned. The Treasury borrowed £1.1bn in July, which was less than official forecasts, while in the first four months of the financial year borrowing was in line with predictions by the OBR. Elliott Jordan-Doak of Pantheon Macroeconomics said the Chancellor will still have to raise taxes in October despite borrowing matching official forecasts. He said: 'The big picture remains that the public finances are in chronically weak condition. 'The Chancellor faces surging gilt yields and a likely productivity downgrade from the OBR in the October forecast round. 'The litany of policy U-turns has only compounded the Government's fiscal woes. We think the Chancellor will need to resort to 'sin' and 'stealth' tax hikes, duty increases, and a pensions tax raid in order to meet her fiscal rules if she wants to meet her pledge of keeping headline tax rates unchanged. 'We expect the bulk of those tax hikes to be backloaded towards the end of the forecast period, minimising any short-term growth implications. 'But that will buy the Chancellor only precious little time. The public finances are unsustainable in the long-run and delaying action now increases the risks of needing to make sharper adjustments in the future, which would be more disruptive for economic activity.' 08:08 AM BST UK stocks lack direction at open Stock markets in London were mixed at the start of trading after the latest figures showed Britain's public finances remain heavily reliant on borrowing. The FTSE 100 edged up 0.1pc to 9,297.34 while the domestically focussed FTSE 250 declined by 0.2pc to 21,851.95. 07:54 AM BST Tax receipts could explain falling payrolls, says economist Higher self employment tax receipts could help explain the decline in the number of people on payrolls in Britain, an economist has said. Staff numbers fell in July to their lowest level since October 2023, the ONS said earlier this month. Simon French of Panmure Liberum said the latest borrowing figures could offer a clue as to why this has happened. The ONS said self-assessed income tax receipts hit £15.5bn in July, up £2.7bn on the same month last year. 07:47 AM BST Reeves 'remains under pressure' as borrowing rises Rachel Reeves 'remains under pressure as she tries to balance weak growth with the fiscal rules', economists have warned. Nabil Taleb, economist at PwC UK, acknowledged that tax revenues 'rose sharply' in July, coming in £9.2bn higher than the same month last year. However, he warned: 'Higher debt servicing costs as a share of total revenues will leave the public finances more exposed to future economic shocks.' Debt interest payments reached £7.1bn in July, which was £200m more than last year. 'Although tax receipts rose in July, the Chancellor remains under pressure as she tries to balance weak growth with the fiscal rules she has committed to,' he said. 'As the Chancellor prepares for the Autumn Budget, the challenge will be finding creative sources of revenue while treading carefully around the impact on living standards.' 07:33 AM BST Treasury borrowing 'not as good as it looks' The improvement in July's borrowing figures was 'not as good as it looks', economists have warned. Capital Economics forecast that the Chancellor will still need to raise taxes by £17bn to £27bn at the Budget later this year to balance the nation's books. The Treasury borrowed £1.1bn in July, which was lower than the OBR forecast for £2.1bn and economists's estimates for £2bn. However, economists pointed to the cumulative current budget deficit, which overshot the OBR's forecast by £5.7bn and 'is what matters for the Chancellor's fiscal mandate'. UK economist Alex Kerr said: 'Ultimately, today's release does little to brighten the gloomy outlook ahead of the Budget later this year. 'The Government's U-turns on spending cuts and potential upward revisions to the OBR's borrowing forecasts mean the Chancellor may need to raise £17bn to £27bn at the Autumn Budget to maintain the £9.9bn of headroom against her fiscal mandate. 'And given that she is struggling to stick to existing spending plans and we doubt the gilt market will tolerate significant increases in borrowing, most of that will have to be funded by tax rises.' 07:28 AM BST Too much spent on covering interest on national debt, says minister The Chief Secretary to the Treasury said too much taxpayer money is spend on debt interest payments. The Government spent £7.1bn in July covering the interest payable on central government debt, which was £200m more than in the same month last year. Darren Jones said: 'We're investing in our public services, and modernising the state, to improve outcomes and reduce costs in the medium term. 'Far too much taxpayer money is spent on interest payments for the longstanding national debt. 'That's why we're driving down government borrowing over the course of the parliament – so working people don't have to foot the bill and we can invest in better schools, hospitals, and services for working families.' 07:25 AM BST Higher tax and National Insurance ease July borrowing figures ONS deputy director for public sector finances Rob Doody said: 'Borrowing this July was £2.3bn down on the same month last year, and was the lowest July figure for three years. 'This reflects strong increases in tax and National Insurance receipts. 'However, in the first four months of the financial year as a whole, borrowing was over £6bn higher than in the same period in 2024.' 07:18 AM BST Borrowing lower than expected in July Borrowing for the first four months of this financial year hit £60bn, which was £6.7bn more than during the same period last year. However, Government borrowing slowed to a lower-than-expected £1.1bn in July, the ONS said. Treasury borrowing was £2.3bn less than the same month a year earlier and is the lowest July borrowing figure for three years. It came after a rise in self-assessed income tax payments helped increase tax receipts for the month. July borrowing was higher than the £2bn figure predicted by economists. 07:14 AM BST Good morning Thanks for joining me. The Treasury has ramped up borrowing so far this year as Rachel Reeves prepares to raise taxes to fill a £50bn black hole in the public finances. Public sector borrowing has climbed to £60bn since April, the Office for National Statistics (ONS) said, which was £6.7bn more than at the same point last year. The Treasury's borrowing figure was in line with official forecasts by the Office for Budget Responsibility (OBR), which was set up in 2010 when George Osborne was chancellor to analyse Government management of the public finances. Borrowing in the month of July was better than had been expected by economists at £1.1bn, which was the lowest figure for the month in three years following stronger self-assessed income tax receipts. The spending comes as Ms Reeves is widely expected to raise taxes in her Budget in the autumn to balance the nation's books. She raised taxes by £40bn at her fiscal event last year but the public purse has come under pressure from rising borrowing costs on debt markets and a failure by the Government to cut public spending. Here is what you need to know. 5 things to start your day 1. Trump calls for Fed board member to quit in fresh attack on central bank | Governor accused of mortgage fraud as president vents frustration at high interest rates 2. US tech stocks lose $1 trillion on AI bubble fears | S&P 500 fell for the fourth consecutive day as tech sell-off deepened 3. BBC wrong not to call Hamas terrorists, says former head of news | Observer editor-in-chief James Harding takes aim at corporation's coverage of Oct 7 attacks 4. Dale Vince compares Musk's Tesla to Ku Klux Klan | Labour-supporting energy tycoon refers to US carmaker as 'The White Power Company' 5. Labour poised to take control of Gupta's UK steel factories | The Government will step in as administrator if factory cannot secure BlackRock rescue deal What happened overnight Asian shares were mostly higher after a mixed finish on Wall Street, where shares in Nvidia, Palantir and other superstar stocks reduced their earlier steep losses. Traders will be hoping for clues on the outlook for US monetary policy from a meeting of central bankers that begins later today in Jackson Hole, Wyoming. Federal Reserve chair Jerome Powell is due to speak to the conference on Friday. In Tokyo, the Nikkei 225 fell 0.6pc to 42,636.74 after a survey showed Japan's factory activity remained in contraction for the second month in August. The S&P Global flash Japan Manufacturing Purchasing Managers' Index (PMI) increased to 49.9 in August from 48.9 in July, just below the 50 level that delineates between growth and decline. Regional manufacturers have been feeling pressure from Trump's higher tariffs on exports to the United States. In Chinese markets, Hong Kong's Hang Seng index edged 0.1pc lower to 25,135.09, while the Shanghai composite index rose 0.4pc to 3,779.52. South Korea's Kospi jumped 1pc to 3,161.74, while Australia's S&P ASX 200 index added 1pc to 9,005.00. Taiwan's Taiex climbed 1.2pc, while India's Sensex added 0.1pc. US stocks fell on Wednesday, though by the end of the day the drops were not nearly as stark as during early trading. The S&P 500 closed down 0.26pc, at 6,394.97 while the Nasdaq Composite fell by 0.68pc to 21,170.19. Tech stocks Palantir, Nvidia and Intel fell by 1.1pc, 0.14pc and 8.86pc respectively. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. 擷取數據時發生錯誤 登入存取你的投資組合 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤
