3 days ago
Starmer's raid on family businesses to cost his constituents 1,000 jobs
Labour's tax raid on family businesses is projected to cost hundreds of jobs in Sir Keir Starmer's constituency alone, new analysis shows.
The revenue-raising scheme is also projected to hit the local economies of Labour constituencies harder than their Conservative, Reform and Liberal Democrat-voting counterparts.
Analysis by the Confederation of British Industry (CBI), which represents nearly 200,000 UK businesses, revealed that the changes to business property relief (BPR) announced in Rachel Reeves's October Budget will stifle growth in Labour seats across the country.
The CBI claims that the average gross value added (GVA) losses in seats that elected Labour MPs at the last general election will be over £24 million, compared to £20 million in Conservative seats and £18.5 million in Reform constituencies.
The projections span from the October 2024 budget to April 2030, after the next general election.
Only seats held by the Green Party fared worse with an average GVA loss of around £40 million, suggesting that cities and urban centres will be worst hit by the raid.
The CBI expects the economic hit to result in thousands of job losses in the most-exposed constituencies.
Sir Keir's seat of Holborn and St Pancras will be the fourth-worst hit constituency in the country with 1,037 jobs expected to be lost, according to the analysis.
Cabinet ministers to feel the pinch in their seats
Red Wall seats are also set to suffer. The analysis shows that of £14.9 billion in nationwide GVA losses, some £4.6 billion (31 per cent) of that will hit constituencies that the Tories won in 2019 and Labour won back in 2024.
These seats include the 31 Red Wall seats in the North and Midlands along with other key marginal constituencies which Labour will hope to win again at the next election if it wants to stay in power.
Senior Cabinet ministers will also feel the pinch in their constituencies. The second-worst hit seat in the country, Manchester Central, is currently represented by Lucy Powell, the Leader of the House of Commons.
The third-worst hit seat is Birmingham Ladywood, represented by Shabana Mahmood, the Justice Secretary. Hilary Benn, the Northern Ireland Secretary, represents the ninth-worst-hit seat of Leeds South.
In the October Budget, the Chancellor slashed BPR in an attempt to raise money from family businesses.
BPR was originally introduced by a Labour government in the 1970s. It allows company shareholders to leave business assets to loved ones without paying inheritance tax on them.
But in a sweeping change that will take effect in April 2026, full business relief will only apply to the first £1 million of a business's assets upon a shareholder's death, with everything above this subject to 20 per cent tax.
