In the previous chapter, we examined the expected behavioural responses from business owners to the changes to BPR and APR. Building on that, this section explores how those behaviours might influence economic activity and growth. We examine various impact channels including investment, headcount, and turnover, while also considering other potential responses such as shifts in ownership composition. The theory of change underpinning this chapter is presented in Figure 9. • The UK could potentially lose 208,500 FTE jobs by April 2030 because of reduced activity attributable to the changes in BPR and APR. More than half of these job losses (122,100) will occur before the changes come into force in April 2026. • While the Exchequer expects to raise to raise £1.8 billion in tax revenue by 2030 from the policy change, our estimates indicate the dampening of activity will lead to a net fiscal loss of £1.9 billion in this period. 3. THE IMPACTS ON THE UK ECONOMY AND PUBLIC FINANCES Having collected data from 4,147 family businesses and farms on their behavioural responses to the changes to BPR and APR, CBI Economics modelled the potential economic and fiscal impacts of the policy changes. Primary survey data was integrated with additional secondary data collected from official and third-party sources. Using bespoke in-house economic and fiscal models, CBI Economics applied this data to forecast the total economic impacts in Gross Value Added (GVA) and Full Time Equivalent (FTE) jobs, along with net fiscal impacts to the Exchequer. 1 As family businesses and farms act to mitigate the impact of changes to BPR and APR, responses are expected to be front-loaded ahead of April 2026, as many accelerate decisions like restructuring, gifting assets, or pausing investment. The modelling results indicate: • Reduced activity will lead to a loss in GVA of £14.8 billion over the next five years. Of this, £6.5 billion is associated with the initial activity of family businesses, with the remainder in the supply chain across the economy.
1 Whilst reduced investment will undoubtedly feed into reduced output, the research did not analyse investment individually here. The Input-Output model will pick up this effect to some extent, however it will not fully encompass the further impacts of deferred and reduced business investment on growth more broadly; these are likely to be significant.
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