Keir Starmer has responded to Sir James Dyson after the billionaire criticised Labour’s decision to impose inheritance tax on farmers.
Dyson, whose farming business holds land worth hundreds of millions across the UK, labelled the move a “spiteful” policy. He accused the chancellor, Rachel Reeves, of implementing a “family death tax” that would harm the sector.
Inheritance Tax Changes Spark Controversy
Last week’s Budget introduced a 20% inheritance tax on farms valued over £1 million when passed down after the owner’s death. Farmers have expressed frustration, accusing the prime minister of reneging on his promise to protect the agricultural sector.
In The Times, Dyson wrote: “Rachel Reeves is killing off established family businesses, and any incentive to start new ones, with her 20% family death tax, levied each time a family business passes a generation.”
He continued: “Every business expects to pay tax, but for Labour to kill off homegrown family businesses is a tragedy. I have huge empathy for small businesses and start-ups that will suffer. Labour has shown its true colours with a spiteful Budget.”
Starmer’s Response
The prime minister’s spokesperson dismissed Dyson’s criticisms, emphasising that tough choices were needed to fix the financial situation left by the previous Tory government.
He said: “The chancellor had to make tough decisions to put public finances on a stable footing. The Budget reflects a balanced approach.”
The spokesman added: “Farmers also rely on strong public services, including the NHS, roads, and schools. The decisions made in the Budget are to ensure continued investment in these vital services.”
Expert Opinion
Paul Johnson, director of the Institute for Fiscal Studies, backed the inheritance tax change. He said: “I have no sympathy for arguments against inheritance tax affecting family farms and agriculture. This is special pleading from extremely wealthy individuals.”
He continued: “Very few farmers will actually be affected. If we believe in having an inheritance tax, then most assets need to be treated similarly. Most European countries do not completely exempt business and agricultural assets from inheritance tax. It hasn’t destroyed family farms before, and it won’t now.”
Farmers Voice Their Concerns
Rural affairs secretary Steve Reed and Treasury minister James Murray met with National Farmers Union president Tom Bradshaw to discuss the farming community’s concerns.
Bradshaw said: “I have never seen such strong support and anger in this industry. Many farmers are considering militant action. While we are not advocating this, the government must recognise the strength of feeling regarding these changes and what they mean for the future of family farming.”
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