Latest news with #economicImpact
Telegraph
a day ago
- Business
- Telegraph
Starmer's family business death tax won't help keep us safe
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.
Yahoo
2 days ago
- Business
- Yahoo
Labour tax raid on farmers to cost Treasury up to £2bn
Rachel Reeves's tax raid on farmers will cost the Treasury almost £2bn, analysis has found, despite Treasury claims that it could boost the public purse by as much as £1.8bn. Inheritance tax reforms due to come into force next April will cause family businesses to slash investment and jobs and lead to a slowdown in the economy, according to independent consultants at CBI Economics. Its estimates suggest that changes to business property relief (BPR) and Agricultural Property Relief (APR) will backfire and, instead of saving money, it will cost the Treasury £1.9bn by 2030. Under the changes, inherited farms worth more than £1m will be taxed at a rate of 20pc after having been shielded from the levies for decades – while a 20pc rate will also be charged on inherited business assets over £1m when someone dies. The Government has said it is expecting to raise £1.8bn from family-owned businesses and farms from the reforms by 2030. Analysis from the Office for Budget Responsibility last October said this estimate accounted for how business owners and farmers would respond to the policies, although admitted the costing had a 'high degree of uncertainty'. Family Business UK, the industry group which commissioned the research, said: 'Far from increasing tax receipts into the Treasury and stimulating the economic growth the Government is trying to deliver, the changes to BPR and APR in the October Budget achieve the opposite.' The organisation said the Government risked 'inadvertently undermining [its] mission of sustained economic growth, which we agree is an absolute necessity to deliver prosperity and improved living standards for working people'. The analysis found that more than 60pc of family businesses and farms were planning to reduce investment by over a fifth in light of the changes. Around a quarter have already cut staff. By the end of this parliament, more than 200,000 jobs are expected to be lost, the research showed. Areas including Yorkshire, the East of England and Northern Ireland are expected to be the hardest hit. It comes amid a growing backlash over the inheritance tax raid and calls for the reforms to be delayed. Charities have reported a surge in calls from distressed business-owners. In November, John Charlesworth, 78, took his own life after his family said he had been 'eaten away' by fear of the tax raid. Neil Davy, chief executive of Family Business UK, said the findings showed 'just how far-reaching, and immediate, the impact of these policy changes is'. He added: 'No industry, sector, region or parliamentary constituency will be immune... The Government must urgently reconsider these policy changes.' Tom Bradshaw, president of the National Farmers Union, said: 'This report must serve as a wake-up call to Treasury, or we face major cuts to investment and significant job losses.' Mo Metcalf-Fisher of the Countryside Alliance said: 'It would be an act of foolishness to ignore the very real and irreversible damage these changes pose to the stability of the agricultural sector.' Meanwhile, Andrew Griffith, the shadow business secretary, said: 'Labour plan to steal the futures of a generation of entrepreneurs on the back of some hooky treasury maths and a blatant breach of election promises. 'The Conservative position is crystal clear. A family business death tax has no place in a society where we celebrate risk takers and wealth creators. No if's or buts. Our first Conservative budget will reverse this damaging measure.' Separate data published on Monday showed the impact Labour's tax policies are having on the economy. Estimates compiled by former Treasury economist Chris Walker found at least 10pc of non-doms have already left the UK in the wake of Labour's crackdown. If more than 25pc of non-doms leave the UK, forecasts suggest the Treasury would start losing revenue. Analysts have suggested the crackdown on non-doms could cost the UK more than £10bn a year in lost economic growth. A Treasury spokesman 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' 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.
Yahoo
2 days ago
- Business
- Yahoo
Labour tax raid on farmers to cost Treasury up to £2bn
Rachel Reeves's tax raid on farmers will cost the Treasury almost £2bn, analysis has found, despite Treasury claims that it could boost the public purse by as much as £1.8bn. Inheritance tax reforms due to come into force next April will cause family businesses to slash investment and jobs and lead to a slowdown in the economy, according to independent consultants at CBI Economics. Its estimates suggest that changes to business property relief (BPR) and Agricultural Property Relief (APR) will backfire and, instead of saving money, it will cost the Treasury £1.9bn by 2030. Under the changes, inherited farms worth more than £1m will be taxed at a rate of 20pc after having been shielded from the levies for decades – while a 20pc rate will also be charged on inherited business assets over £1m when someone dies. The Government has said it is expecting to raise £1.8bn from family-owned businesses and farms from the reforms by 2030. Analysis from the Office for Budget Responsibility last October said this estimate accounted for how business owners and farmers would respond to the policies, although admitted the costing had a 'high degree of uncertainty'. Family Business UK, the industry group which commissioned the research, said: 'Far from increasing tax receipts into the Treasury and stimulating the economic growth the Government is trying to deliver, the changes to BPR and APR in the October Budget achieve the opposite.' The organisation said the Government risked 'inadvertently undermining [its] mission of sustained economic growth, which we agree is an absolute necessity to deliver prosperity and improved living standards for working people'. The analysis found that more than 60pc of family businesses and farms were planning to reduce investment by over a fifth in light of the changes. Around a quarter have already cut staff. By the end of this parliament, more than 200,000 jobs are expected to be lost, the research showed. Areas including Yorkshire, the East of England and Northern Ireland are expected to be the hardest hit. It comes amid a growing backlash over the inheritance tax raid and calls for the reforms to be delayed. Charities have reported a surge in calls from distressed business-owners. In November, John Charlesworth, 78, took his own life after his family said he had been 'eaten away' by fear of the tax raid. Neil Davy, chief executive of Family Business UK, said the findings showed 'just how far-reaching, and immediate, the impact of these policy changes is'. He added: 'No industry, sector, region or parliamentary constituency will be immune... The Government must urgently reconsider these policy changes.' Tom Bradshaw, president of the National Farmers Union, said: 'This report must serve as a wake-up call to Treasury, or we face major cuts to investment and significant job losses.' Mo Metcalf-Fisher of the Countryside Alliance said: 'It would be an act of foolishness to ignore the very real and irreversible damage these changes pose to the stability of the agricultural sector.' Meanwhile, Andrew Griffith, the shadow business secretary, said: 'Labour plan to steal the futures of a generation of entrepreneurs on the back of some hooky treasury maths and a blatant breach of election promises. 'The Conservative position is crystal clear. A family business death tax has no place in a society where we celebrate risk takers and wealth creators. No if's or buts. Our first Conservative budget will reverse this damaging measure.' Separate data published on Monday showed the impact Labour's tax policies are having on the economy. Estimates compiled by former Treasury economist Chris Walker found at least 10pc of non-doms have already left the UK in the wake of Labour's crackdown. If more than 25pc of non-doms leave the UK, forecasts suggest the Treasury would start losing revenue. Analysts have suggested the crackdown on non-doms could cost the UK more than £10bn a year in lost economic growth. A Treasury spokesman 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'
Yahoo
2 days ago
- Business
- Yahoo
Ontario signs deals with Saskatchewan, P.E.I. and Alberta to reduce trade barriers
Amid economic uncertainty in Canada due in part to U.S. tariffs, the Ontario government has reached agreements with Saskatchewan, Alberta and Prince Edward Island, with the aim of taking steps to reduce trade barriers among the provinces. Ontario Premier Doug Ford signed separate memorandums of understanding (MOU) with Saskatchewan Premier Scott Moe, Alberta Premier Danielle Smith and P.E.I. Premier Rob Lantz in Saskatoon on Sunday ahead of a first ministers' meeting there. Ontario signed an MOU with Manitoba in May and with Nova Scotia and New Brunswick in April. Ford, who held a news conference only with Moe about the MOU, said the province is "standing up for free trade" within Canada by signing such agreements, adding that they're an attempt to offset the impact of U.S. tariffs on the Canadian economy. "Our government is on a mission to protect Ontario and to protect Canada," he told reporters in Saskatoon. "At a time when President [Donald] Trump is taking direct aim at our economy — and make no mistake about it, he wants to annihilate our economy, no matter if it's manufacturing in Ontario or any other jurisdiction that he can get his hands on, bring it down to the U.S. — and we're going to fight like we've never fought before, not just to protect Ontario but to protect the rest of our our country." Ford said the agreement aims to not only increase the standard of living in Ontario and Saskatchewan but to improve investor confidence and allow for the free movement of their "best and most in-demand" workers. "We're doing this by reducing barriers to internal trade.... We need to build a more competitive, more resilient, more self-reliant Canadian economy." Saskatchewan's Moe said the MOU is "yet one more way that we are able to stand strong for our provinces, and collectively as provinces, stand strong for our country and all the people who call Canada home." He said both he and Ford have long been advocates of streamlining trade across the country. "It shouldn't be easier to trade with other countries than it is to trade between the Canadian provinces of our nation," Moe told reporters. "It's more important now, I would say, than ever for us to prioritize removing any and all barriers that we have that limit flow of trade and limit flow of professionals from moving across Canada," he said. "It's very greatly appreciated to have another like-minded province join us on that front and to continue to put words into action." Memo to strengthen respective economies, Moe says Moe said the MOU contains mutual recognition and reciprocity — in particular, mutual recognition of goods, workers and investment. The agreement will only strengthen their respective economies, benefit workers and businesses and enhance the Canadian economy, he said. According to the MOU, Ontario and Saskatchewan pledge to build on "enabling legislation" to remove internal trade barriers to boost the flow of goods, services, investment and workers, while maintaining and strengthening the levels of public safety. WATCH | Ontario and Manitoba sign deal to break down trade barriers: Ontario and Saskatchewan agreed that while working to remove trade barriers, they will respect the role of Crown corporations within some provincial industries, while Ontario and Alberta will respect the integrity and role of regulators. Ontario and the other three provinces also agreed to work on improving interprovincial labour mobility, saying they will aim to ensure any good, service or worker deemed acceptable in one province is also deemed acceptable in the other. As well, all agreed to work on a framework to implement a direct-to-consumer sales system of alcohol, "so that producers have easier access to market opportunities across the country, and so that consumers across Canada have greater choice and access to a broader selection of alcoholic beverages." 35% of trade occurs within Canada's borders, Ontario says In a news release on Sunday, Alberta's Smith said: "Together, Alberta and Ontario are taking a big step toward a more open, competitive and united economy." She added: "This agreement is about getting results, making it easier for people to work, do business and grow across provincial lines. It's time to stop letting outdated rules hold us back and show Canadians what real economic leadership looks like." Lantz said in the release: "By eliminating unnecessary trade barriers and streamlining labour mobility, we're fostering a more unified and competitive national economy. Our collaboration with Ontario underscores our commitment to one Canadian economy." According to the Ontario government, 35 per cent of Canada's trade takes place within its borders. In early March, the U.S. imposed tariffs of 25 per cent on Canadian exports and 10 per cent on energy product exports from Canada. Later in March, the Trump administration introduced tariffs of 25 per cent on Canadian steel and aluminum products, and in early April, it imposed a 25 per cent tariff on Canadian automobiles. Trump has threatened to double the tariffs on steel and aluminum imports to 50 per cent on Wednesday.
Times
2 days ago
- Business
- Times
Inheritance tax changes ‘put 200,000 jobs at risk'
More than 200,000 jobs are at risk from the planned changes to inheritance tax rules for family businesses and farms, according to research. The government's decision to change the rules for business property relief (BPR) and agricultural property relief (APR) could also wipe almost £15 billion from UK economic activity and result in a £1.9 billion tax loss, the study by Family Business UK (FBUK) said. The government is planning to reform APR, which can give up to 100 per cent relief from inheritance tax on qualifying land, and BPR, which has the same effect on buildings operating as business premises. The latter is applicable not only to stately homes but on a range of properties. In October, Rachel Reeves, the chancellor, announced that from April 2026 inherited agricultural assets worth more than £1 million would be liable to inheritance tax at 20 per cent — half the usual rate. The changes, according to FBUK, could result in the loss of 208,000 jobs. Parts of Cornwall and Aberdeenshire are expected to be the worst affected, alongside Yorkshire, northern and eastern England, the Midlands and Northern Ireland. The industries expected to bear the brunt of the changes are construction, manufacturing, accommodation, hospitality and the motor industry, as well as agriculture and horticulture. Neil Davy, the chief executive of FBUK, said: '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.' The research, which involved 4,174 businesses and farms, showed that for family businesses affected by the change to BPR, investment is likely to fall the most across Yorkshire & the Humber, as well as the East of England, by 17 per cent. Job losses would be greatest in parts of Scotland, the North West and North East of England.
