British businessman Sir James Dyson has voiced strong criticism of Labour’s recent Budget, describing it as “spiteful” and warning it could be the “death of entrepreneurship” for family-run businesses across the country.
Dyson, who employs over 2,000 people in the UK, argues that Labour’s inheritance tax overhaul is an “ignorant swipe at aspiration” that will stifle the growth of local businesses.
Chancellor Rachel Reeves introduced changes tightening inheritance tax relief on business property. This adjustment means firms passing down assets worth over £1 million will now be taxed at 20 percent. Additionally, for the first time in UK history, family farms worth over £1 million will also face inheritance taxes.
Dyson expressed his dismay, noting that these policies harm long-standing family businesses and discourage new ones. “Rachel Reeves is killing off established family businesses, and any incentive to start new ones, with her 20 percent Family Death Tax, levied each time a family business passes a generation,” he wrote.
“Every business expects to pay tax, but for Labour to kill off homegrown family businesses is a tragedy. In particular, I have huge empathy for the small businesses and start-ups that will suffer. Labour has shown its true colors with a spiteful Budget.”
James Dyson
Labour Defends Budget Measures
Home Secretary Yvette Cooper countered Dyson’s remarks, stating that these budgetary changes were necessary to correct what she described as a troubled economic inheritance.
“Well, I clearly don’t agree with that. I think the opposite is true. This was a Budget that was about fixing the foundations. We did inherit the shocking state of the public finances that was much worse than we had anticipated and also very weak growth in the economy.”
Yvette Cooper
Cooper underscored the importance of ensuring public services are adequately funded, pointing to the fragile state of the National Health Service as a key example of why tough decisions had to be made. “Of course, that has meant some difficult decisions; we don’t run away from that. We would not have been able to turn our backs on that,” she added.
Farmers and Small Businesses Push Back
Many small business owners and farmers have voiced apprehensions about Labour’s inheritance tax policies, with fears that the new measures will create obstacles for family-owned enterprises trying to pass on their legacies.
Peter White, founder of Nova Laboratories, a pharmaceutical company, voiced his concerns over the increased inheritance tax burden.
“My son will now need to personally generate approximately £26 million of liquid cash on my death to continue to own and manage our pharmaceutical company. This is 40 times his personal wealth, including the value of his family’s home and all possessions.”
Peter White
White’s statement underscores the challenges many family businesses could face under the new regulations.
Farmers, already operating under financial strain, are particularly affected. Tom Bradshaw, head of the National Farmers’ Union, described the tax policy as the “final straw” for many in the farming community, who are now grappling with the possibility that they might be unable to pass their farms on to their children.
Bradshaw is scheduled to meet with the environment secretary to discuss the issue, advocating for the policy’s reversal as “the only sensible course of action.”
Tax experts suggest that the new inheritance tax rules are likely to impact fewer than 500 farms each year, given the current thresholds.
As such, Labour leaders stress that the tax change is justified, given the need to support public finances.
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