“Rachel Reeves is no economist” and she’s got her Inheritance Tax sums wrong
Chancellor Rachel Reeves. Picture by Kirsty O’Connor / Treasury
CP
Rachel Reeves’s controversial inheritance tax raid on family businesses and farms is coming under intense scrutiny as economists reveal it will cost the Treasury over £1 billion more than it raises.
The damning analysis, carried out by CBI Economics, exposes the catastrophic flaws in the Chancellor’s calculations, painting a bleak picture for Britain’s economy under Labour’s stewardship.
The study estimates that Ms Reeves’s changes to business property relief (BPR), a key tax relief for family-run firms, will result in the loss of 125,678 jobs and a £2.6bn reduction in tax revenue from income tax, corporation tax, and national insurance over the next five years. These figures far outweigh the £1.38bn Ms Reeves hopes to raise, leaving the Exchequer £1.26bn worse off.
Investment and Jobs in the Firing Line
The report highlights that the Treasury has “underestimated the impact” of slashing BPR. Family businesses, the backbone of Britain’s economy, are expected to cut investment significantly to offset the financial burden of the tax changes. Economists warn that this will result in a ripple effect of job losses and economic decline, pushing the country closer to recession.
The findings are the latest indictment of Ms Reeves’s much-criticised Budget, which has already been labelled anti-business and economically illiterate by experts.
Badenoch and Farage Blasts Labour’s Economic Mismanagement
Leader of the Conservatives, Kemi Badenoch, will cite the research in a speech today as she warns that “no one is safe” from Labour’s tax raid.
“Keir Starmer’s decisions will drain investment and growth out of the British economy. And no one is safe. Businesses small and large, rural and urban, whether they make goods or provide services.
“The warning from Family Business UK that Labour’s changes to BPR could lead to 125,000 job losses is chilling. For some context, that figure is equivalent to the entire population of Blackburn.”
Nigel Farage, leader of Reform, didn’t hold back in his assessment of Ms Reeves’s handling of the economy either. He said: “Rachel Reeves is no economist. Her Budget measures and total lack of understanding of the private sector is driving us into recession.”
Family Businesses Under Threat
For family-run farms and businesses, Ms Reeves’s inheritance tax changes could spell disaster. The cuts to BPR mean many will struggle to remain viable, threatening not only livelihoods but the communities that depend on them. Critics argue that Labour’s policies disproportionately punish the very entrepreneurs who drive local economies and provide vital employment.
A Blow to Britain’s Economic Stability
Labour’s inheritance tax raid is the latest example of a government seemingly out of its depth when it comes to managing the economy. As the spectre of recession looms, Ms Reeves’s decision to prioritise headline-grabbing tax hikes over long-term economic stability risks further eroding confidence in the UK’s financial future.
The figures don’t lie. With job losses mounting, investment plummeting, and tax revenues falling short, Ms Reeves’s inheritance tax blunder is shaping up to be an economic disaster that Britain can ill afford.
According to analysis by the CBI Rachel from accounts has got her Inheritance Tax sums all wrong!
Income from IHT approx £1.38bn
Impact of tax- 125,678 jobs lost, & a drop of £2.6bn in other tax revenue
Loss to treasury of £1.26bn from introducing this tax! #Laboureconomics pic.twitter.com/BtZfSVU5aS
— Esther McVey (@EstherMcVey1) December 16, 2024
This article “Rachel Reeves is no economist” and she’s got her Inheritance Tax sums wrong was created and published by Conservative Post and is republished here under “Fair Use” with attribution to the author CP
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