Esther McVey has launched a scathing attack on government claiming Chancellor Rachel Reeves’ economic decisions will sound the death knell for family businesses and enterprise in the UK.
The Tatton MP said despite wanting to be remembered as the country’s first female Chancellor, Ms Reeves’ legacy would be as “Grim Reeves Reaper”.
Ms McVey said many businesses in Tatton have spanned five generations, survived through the most difficult times including two world wars, but are clear that “this Chancellor’s Budget will be the death of them.”
Changes announced in the Budget included an increase in employer National Insurance Contributions, as well as an increase in minimum wage – which affect all businesses. But the country’s 5.3 million family-owned businesses were dealt a further blow with changes to Business Property Relief which could see many having to pay inheritance tax for the first time in 50 years.
Speaking in a Parliamentary opposition day debate on family businesses, Ms McVey said: “The Labour Government show no sign of understanding business, let alone family businesses that employ 14 million people and add £575 billion to the economy.
“A family business I spoke to said, “We are already working on small profit margins. We do not know how we will cope. The enormity of the changes will change the way we look at our business. What are we going to do? We might have to carve up the business, sell it or close it down.”
Ms McVey said family businesses were also the breeding ground for entrepreneurs and government will “kill” that entrepreneurial spirit as well as see jobs lost in local communities.
According to CBI Economics there could be 125,000 jobs lost and a reduction in economic activity of £9.4 billion between 2026/27 and 2029/30 because of changes to BPR. Business leaders have also warned of less or no investment as firms struggle to pay tax bills, resulting in stifled growth.
Ms McVey added: “The death of a family member could now spell the death of a family business too.
“Labour’s raid on family businesses, worth about £500 million by 2030—that is the Treasury’s forecast—will actually lose billions of pounds more. These tax changes are ideologically driven, and the Chancellor is killing the geese that lay the golden eggs. There is a vacuum of business know-how and business knowledge among those on the Government Benches. What they are doing to our country is an utter disgrace.”
Government claims the changes will only impact the biggest and wealthiest businesses. Ms McVey strongly disputes the claim, and said government liked to spin that rhetoric in the same way it did with winter fuel payments, farming inheritance taxes, and VAT on private schools.
