Farmers have quite rightly been hitting the headlines following the disastrous decision by the Chancellor at the end of October to cut the relief to Inheritance Tax for Agricultural and Business Property.
These changes threaten the way of life of our whole countryside, putting family farmers squarely in the crosshairs of an end-of-life tax bill that could reach well into 6-figures.
Whilst the land they farm is highly valuable, farmers themselves are not cash rich—indeed nearly three quarters of farms turn less than £50,000 in profit every year. So, when hit by a 20% inheritance tax on assets over £1 million, farmers will simply be forced to sell up large parts of their farms.
This will have devastating consequences not only for our countryside’s conservation, but also for our food security, and for food prices.
But whilst farmers are particularly exposed to the devasting changes to APR and BPR, it's important to remember our family-owned businesses are also at risk.
In my constituency of Keighley and Ilkley we have a wide range of renowned businesses—each one rooted in our community and creating jobs for local people.
I recently visited Fives Landis in Eastburn, for example, where Managing Director Phil Jenkins and his team are leading the way in high-precision engineering for global industries—from automotive to aerospace. With over 200 years of excellence, this business is a key employer in our area and a true industrial pioneer.
I also visited NSF Controls, a long-standing Keighley manufacturer, where they’ve just unveiled a brand-new CNC machine—an investment made possible through the last Conservative government's Keighley Towns Fund. This business powers everything from critical national infrastructure to candy floss machines, and even has ambitions to work with NASA.
And Fibreline, another jewel in our manufacturing crown, is now sounding the alarm. I spoke directly with Richard Prudhoe and the team at Fibreline—a business that has been employing local people for over 40 years.
Under the previous government, family-run businesses like Fibreline looking to pass on their business to the next generation received 100% relief on inheritance tax, meaning families who have served our area for decades by employing many local people could continue to benefit the local economy.
But now, Labour have changed the system, meaning that family businesses who have worked hard for generations to keep their business serving local people will now have to pay inheritance tax at 20%,
Richard made it clear how deeply concerned his company is about Labour’s changes. With inheritance tax now hitting at 20%, families like his—who’ve built something great for the community—are being left wondering how they’ll pass it on to the next generation without selling up.
Many other major manufacturing businesses in the heart of Keighley will have assets well in excess of ÂŁ1 million. I have already heard local stories of businesses that were set to be handed down to children now being put into trust to avoid the wrath of HMRC.
And in Ilkley, where property prices are high, even a modest retail business with its stock and any other assets—and when a residential property is also considered—will start to put pressure on the relatively low thresholds the Chancellor has granted.
They say don’t bite the hand that feeds you, but with the taxes raised by family businesses, not to mention the literal food produced by farmers, the Treasury is enacting a huge miscalculation.
We all value the public good our family-owned businesses and farms provide, so it is surprising that the Chancellor has chosen them as the target of her tax raid. Not only do they provide huge social “soft” benefits, but it is businesses such as these that must thrive to build a wider, healthier economy.
Of course, the Chancellor has justified a budget-wide tax raid of over £40 billion, including changes to inheritance tax, on a dubious financial shortfall. In fact, the budget the Office for Budget Responsibility failed to back up her claim of “£22 billion” and work by the BBC clearly showed over £9 billion of that figure was the product of generous public sector pay deals.
And without the incentive to build for the future, how does the Government expect to deliver improvements to our high streets, to our small business economy, and to our environment?
Contrary to Labour’s claims they are protecting the “working person”, when our high streets, small manufacturers, and farmers have to sell up, it will be the hyper-rich and the faceless corporations that benefit from these reforms by snapping up the assets on offer and locking them away from ordinary people for good.
As the Prime Minister himself said: “losing a farm isn’t like any other business—it can’t come back.”
Well Prime Minister, I fear with your changes to BPR, our family-owned businesses won’t be coming back either.
As Keighley and Ilkley's Member of Parliament, I will certainly be doing everything in my power to force the government to reverse these changes.
