FOREWORD
This research, conducted independently by CBI Economics, provides robust, quantitative data and evidence as to the economic impact of these policy changes, and the actions owners of family businesses and farms will take. Far from increasing tax receipts into the Treasury and stimulating the economic growth the Government is trying to deliver, the changes to BPR and APR in the October 2024 Budget achieve the opposite; a reduction in tax receipts to the Treasury of almost £1.9 billion, a reduction in GVA of nearly £15 billion, and the loss of more than 200,000 jobs across the UK over the course of this Parliament. The analysis shows the enormous impact this policy will have across the UK. No industry, sector, region or constituency will be immune from these effects. Parts of Government are looking at how to boost regional growth and create opportunities in left-behind communities, but this report shows how the decision by HM Treasury will actively damage and undermine those efforts. FBUK, and others, have called for a reversal of this policy decision and full consultation with our Members. We have repeatedly tabled amendments, concessions and alternative proposals. All have been rejected by the Government. Along with the trade association that participated in this research, we urge the Government to consider the findings of this report and to work with us constructively and collaboratively to deliver what we all want – economic growth and a stable policy environment that encourages and incentivises investment.
For centuries, family ownership of businesses and farms has been commonplace in the UK. Within the diverse landscape of the UK economy,
family businesses have been a dominant force, helping to build Britain for generations. Long term in nature, they are often the largest employer in a given community and frequently the largest contributor to community and charitable activities. In recent decades, family businesses and farms have been supported by a stable policy environment around ownership that has given confidence to business owners to make long-term investments in the future of their business, in their employees, and in the communities where they operate. Business Property Relief (BPR) and Agricultural Property Relief (APR) are central to that. They are policies designed for a specific purpose: to prevent the forced sale or break-up of family-owned businesses when the owners die. For decades, they have quietly, and without controversy, achieved this. In doing so, they have ensured the long- term growth and success of those businesses and employment security for their workers. The Autumn Budget 2024 brought this stable policy environment to an end. The changes announced to BPR and APR place material uncertainty over the future of many family-owned enterprises. In the absence of any Government economic impact assessment or risk analysis of this policy change, Family Business UK (FBUK), supported by more than 30 independent trade associations representing every sector of the UK economy, sought to fill the gap.
Neil Davy, CEO, Family Business UK
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