James Dyson attacks Rachel Reeves’s ‘spiteful’ Budget

Sir James Dyson
Sir James says Rachel Reeves is killing off established family businesses - Christopher Pledger

Sir James Dyson has labelled the Chancellor’s inheritance tax raid on British businesses “spiteful” and warned it risked the “death of entrepreneurship”.

Sir James accused Ms Reeves of “killing off established family businesses, and any incentive to start new ones”, with the so-called “death tax”.

The changes to inheritance relief on business property mean that family firms passing on assets of more than £1 million will be charged 20 per cent tax from April 2026.

A 20 per cent levy on farms worth more than £1 million has also been introduced.

Sir James wrote in The Times: “Rachel Reeves is killing off established family businesses, and any incentive to start new ones, with her 20 per cent Family Death Tax, levied each time a family business passes a generation.

“The very fabric of our economy is being ripped apart. No business can survive Reeves’s 20 per cent tax grab. It will be the death of entrepreneurship. Think of the jobs for ‘working people’ that will be lost – or never created.”

He added: “Family businesses are an antidote to the short-termism which is the blight of the British economy and of which everyone complains.

“Family businesses are in the blood: a shared journey between the business and the family across the generations. Britain will sorely miss them.

“Every business expects to pay tax, but for Labour to kill off home-grown 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 colours with a spiteful Budget.”

Yvette Cooper hits back

Yvette Cooper rejected Sir James’s criticism of the Budget after the inventor and entrepreneur accused Rachel Reeves of taking an “ignorant swipe at aspiration”.

But Ms Cooper, the Home Secretary, rejected the criticism, insisting the Government had brought forward a “very positive Budget”.

Speaking to Sky News, she said: “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 and the state of our public services, particularly our National Health service which had really been pushed onto its knees.”

Asked for her response to Sir James’s remarks, Ms Cooper told Sky: “What the Budget has done is setting out how we fix the foundations, get the public finances on track, how we also boost growth across the economy and also how we start to fix those really damaged public services, particularly with the investment in the NHS.

“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.”

Pressed on whether she rejected the “spiteful” label, she said: “Of course. Of course I don’t agree with that. I think this is about a very positive Budget to fix the foundations but also to be able to grow our economy.”

The changes were part of a Budget that raised taxes by £40 billion to fund major cash injections for public services and fill what the Chancellor claims was a “black hole” in the public finances left by the previous government.

It comes after Tom Bradshaw, the president of the National Farmers Union, warned in an article for The Telegraph that the unexpected move is fuelling a mental health crisis among farmers that will force some to quit.

NFU president Tom Bradshaw
NFU president Tom Bradshaw fears for farmers’ mental health - Geoff Pugh

Mr Bradshaw reveals his team has been inundated with calls from elderly farmers who have been driven to tears and now feel they are a “burden” on their own families.

Labour councillors have said they expect the party to face a revolt from rural voters over the policy in May’s local elections.

The Treasury’s own estimates show the tax changes on farms are set to raise just £520 million a year by 2030.

With the NHS’s annual spending reaching more than £150 billion, the amount raised by the farming inheritance tax change would be spent by the health service in a little more than a day.

By comparison, the increase in employers’ National Insurance – the flagship tax increase in the Budget – will raise £25 billion by then, which is 50 times greater.

Appearing on BBC One’s Sunday with Laura Kuenssberg, Ms Reeves showed no sign of reversing course and instead argued that the public finances were too strained to keep the existing rules.

Ms Reeves said: “Last year, the benefits of agricultural property relief, 40 per cent of the benefit was felt by 7 per cent of the wealthiest landowners. I don’t think that it is affordable to carry on with a relief like that when our public services are under so much pressure.

“And of course farmers as well rely on good public services, whether that’s our NHS, our roads or our schools. That money will be put back into improving our public services and putting our public finances on a firm footing.”