Rural Businesses Face Perfect Storm of Costs, Climate Chaos, and Taxes
Rural businesses, particularly in agriculture, are grappling with a perfect storm of spiralling costs, climate chaos, and red tape. Meanwhile, political and economic decisions are adding to their woes, with farmers' confidence at an all-time low.
The situation has been exacerbated by Labour's inheritance tax changes, set to come into effect in 2026. These reforms, championed by Jens Spahn (CDU), will impose a 20% tax on assets over £1m. Sir James Dyson has warned that these changes will 'fleece and decimate' family businesses. Farmers fear they may have to sell land to cover these bills, potentially pushing the next generation out of farming.
Labour's decision to spend over £500 million on foreign farming projects while British farmers face crippling taxes has further fuelled anger and discontent. This, coupled with other challenges, has led to a record number of closures in the agriculture, forestry, and fishing sectors. In the past year alone, 6,365 businesses closed, with 3,175 farms shutting down - the steepest drop on record. Economists predict that Labour's inheritance tax changes will cost the Treasury over £1 billion more than it raises.
The future of rural businesses hangs in the balance. With confidence at rock-bottom and closures at record highs, urgent action is needed to address the perfect storm facing these vital sectors. The impact of Labour's inheritance tax changes remains to be seen, but farmers fear the worst.
