Marketing Newscast

(Edited 24 March 2025)

Over half of all family-run businesses and farms have paused or ditched investments because of Chancellor Rachel Reeves’s inheritance tax (IHT) raid, according to research by CBI-Economics commissioned by Family Business UK (FBUK). More than 55% of such businesses surveyed said they had put spending plans on hold after Reeves abolished IHT exemptions in her October Budget. 12% of respondents to the survey also said they planned to sell their business to cover the tax increase. FBUK said this meant more than 208,000 jobs could be cut and the Treasury receive £1.9bn less by the end of this Parliament. FBUK CEO Neil Davy added that around one in five businesses it surveyed had also reduced charitable donations or community activities since the Budget: “Across every sector, decisions are now being taken to cut jobs, reduce investment and sell assets threatening the future of thousands of businesses farms and the sustainability and security of UK farming and food production,” he said highlight this means that “ultimately, it will be the working people, and communities right across the country, who depend on family-owned businesses and farms who’ll pay the price.” Lance Forman, the owner of London’s oldest salmon smokehouse H Forman & Son and a former Brexit Party MEP, told The Telegraph: “People don’t run family businesses for a tax loophole – it’s bloody hard work”. “To tax a business just because the owner happens to have died, it shows a complete lack of understanding of the decisions that people make in starting up and running businesses,” he added, saying it was much better that businesses were kept going, “so they employ people, so the Government receives PAYE (pay as you earn) on the employees’ salaries, income tax on dividends, capital gains tax if the business is ever sold at some stage”. Meanwhile, IHT receipts totalled £7.6bn in the last 11 months, a record high and surpassing last year’s full-year total of £7.5bn by 11.8%. The Office for Budget Responsibility is predicting that nearly 10% of estates will pay inheritance tax by 2030 because of increasing house prices, changes to tax rules and years of allowance freezes – the inheritance tax-free threshold has not been raised since 2009, and the Government plans to freeze it for at least another five years.

Farmers are also reeling from yet another attack on their livelihoods by the Government, which has introduced an inflation-busting increase in statutory abattoir costs. Abattoirs must have inspectors and official vets on site to ensure animal welfare standards are met, and regulator the Food Standards Agency (FSA) has announced a 17.7% rise in the hourly rate paid to official vets to £65.90, and an 11% increase in the rate for meat hygiene inspectors to £43.20 from the end of March. Not only that, but the Government is considering proposals that could see a discount on these fees for the smallest abattoirs phased out, all measures, farmers say, which put smaller abattoirs at risk of closure with resulting knock-on effects on their businesses. Smaller abattoirs are already closing at a rate of 10% per year according to FSA data. David Barton, a Cotswolds-based livestock farmer and chair of the National Farmers Union(NFU) livestock board, said: “We desperately need to keep our small and medium-sized abattoirs going, because that feeds a whole sector of farmers that are selling boxed beef or delivering to small farm shops. It’s massively important for the rural economy.”

Manufacturing too is falling because of Reeves’ £40bn tax raid on businesses, which are now “conserving funds”, according to research by the Confederation of British Industry (CBI). The CBI notes output volumes fell more in the three months to March than in the quarter to last month, with only three out of 17 manufacturing sub-sectors escaping a slump. Defence and aerospace were described as a “pockets of strength” by the CBI’s lead economist Ben Jones, because of geopolitical tensions and the Government’s plans to increase military spending to 2.5% of GDP, but otherwise, manufacturers responding to the survey reported that “customers are generally nervous about proceeding with capital investments… leading orders to be cancelled or at least delayed until later in the year,” Jones said.

Meanwhile, Reeves is said to be preparing to offer a £700m tax break to US tech giants such as Meta, Google and Amazon in the hope of escaping Donald Trump’s trade war. The idea is to adjust the Digital Services Tax (DST), which targets such firms, in the light of Trump’s pledge to slap tariffs on UK companies in retaliation for the taxes Britain levies on US tech firms. Reeves said: “We need to get the balance right. We don’t want British exporters facing higher tariffs.” The DST, which was introduced in April 2020 to tax the revenue, rather than the profits of digital firms, so they could not avoid UK taxes by registering their businesses in other tax jurisdictions, has raised around £800m a year since then.

The Chancellor will this week order the Civil Service to save £2 billion a year, much to the anger of trade unionswhich say the cut could result in tens of thousands of government jobs being axed. It is believed that roles in HR, office management and government communications will be targeted, to spare front-line services. Union bosses said the size of the cuts represented about 10% of the entire Civil Service salary bill, raising the prospect of tens of thousands of redundancies.

The Financial Conduct Authority (FCA) is launching a full investigation into commission payments in the pure protection insurance market, focussing on term assurance, critical illness cover, income protection insuranceand whole of life insurance. The sector paid out £4.85bn to customers in 2023 to support families with financial commitments in the event of bereavement, illness and injury. While admitting it had received few complaints following the launch of a so-called Market Study followed an announcement in August, the FCA highlighted worries about whether the commissions used to sell the products are affecting the outcomes consumers receive and the products' value or design. The regulator will also probe whether advisers are wrongfully encouraging consumers to switch deals unnecessarily, and if premiums are being hiked so that insurers can pay higher commissions to intermediary parties.

Energy secretary Ed Miliband has ordered an urgent examination into the cause of the power outage at Heathrow Airport on Friday last week. A fire at a nearby substation triggered a "significant power outage", leading to the closure of the airport until the early hours of Saturday morning. More than 1,000 flights were cancelled and some 200,000 people had travel plans disrupted. Miliband said he has instructed the National Energy System Operator (NESO) to look into the incident and report back within six weeks, so the incident is “prevented from ever happening again". Around 70 firefighters and 10 engines worked to extinguish the fire, which also left 67,000 households without power, although that was restored by 2pm on Friday. However, the National Grid CEO John Pettigrew is claiming Heathrow could have kept running because two other substations serving the site were working and could have provided sufficient power to keep it open. He told the Financial Times “there was no lack of capacity” and it was a “question for Heathrow” as to why the London airport was closed down. Heathrow is denying this claim, saying: “It would not have been possible for Heathrow to operate uninterrupted. Hundreds of critical systems across the airport were required to be safely powered down and then safely and systematically rebooted”. Meanwhile, Heathrow CEO Thomas Woldbyehas been criticised for going to bed instead of working through the night as the fire raged. Woldbyte, whom the Sunday Times noted earned £3.2m last year, is understood to have been at an event in central London when the power first went out after 11pm on Thursday, and delegated the decision to close the airport to his deputy. The airport has insisted it was vital he rested to take the more pivotal decision of when to reopen the airport. Rachel Reeves, in the meantime, has used the outage to stress how important it is to expand airport capacity in the UK and “build the resilience in our UK critical infrastructure, including our hub airport Heathrow".

Gatwick airport is pushing back against Government requirement to guarantee that the majority of passengers using its proposed new runway will arrive by train. CEO Stewart Wingate says that while meeting some of the requirements for approval of the £2.5bn plan to add 100,000 flights a year, such as lower noise levels, may be feasible, ensuring at least 54% of travellers will get to and from the airport by rail – up from 44% now – is beyond the airport’s control and ability to deliver. Gatwick and its French owner Vinci cannot be expected to fund the new runway only to then have flights halted because of the failings of train operators that are themselves about to be brought under state control, he said, adding: “We can’t make an investment that relies on a runway that we can’t use because the railway company hasn’t got a timetable, or hasn’t got the hours of operation, or the size of trains, or prices that allow 54% of passengers to get to and from the airport”. Rather than demand increased rail usage, Ministers should give more weight to Gatwick’s plans for a “suite of roadway enhancements” to address the chief concern of the Planning Inspectorate, “which is to avoid congestion on the local roads close to the airport,” he said.

Rolls-Royce is reportedly drawing up emergency contingency plans to ramp up production in the US to counter damage wrought by President Donald Trump’s trade war. The British FTSE 100 engineering giant is said by theTelegraph to be exploring how much production could be transferred from the targeted countries to the US, where it employs 6,000 workers across 11 sites, so it could take on more new work without being subject to tariffs. A source told the newspaper that said the Derby-based manufacturer was “tipping the balance” towards the US in response to the tariffs, saying: “If you are making something in countries like China then you’ll be looking at whether you can do it in the US instead”.

Ocado has become one of the latest firms to water down diversity, equity and inclusion (DEI) policies, pushing back its goal to 10%c of senior management roles made up of people from ethnic minorities to 2030 from its previous target of 2027. The move by the London-listed technology company, which jointly owns online grocer Ocado Retail with M&S, follows a crackdown on DEI by Donald Trump, who has banned such programmes at federal agencies and ended government contracts with “woke companies” that refuse to comply.

Lawyers for Harrods are proposing compensation payments potentially worth more than £300,000 to victims of sexual abuse committed by former owner Mohamed al Fayed. Details of the redress scheme will be finalised next week, Sky News reports.

Big Technologies (BIG) said on Friday it is considering action against its suspended CEO and founder Sara Murray. The AIM listed tech firm suspended her on Wednesday last week, citing concerns about her conduct related to ongoing litigation brought by former shareholders of Buddi Limited, a subsidiary of BI, related to its 2018 acquisition. Now, BI says it can no longer rely on a statement she signed on behalf of the company in relation to that litigation, and confirmed it is “considering its position in relation to the litigation as well as other steps which it may be appropriate to take, including the possibility of claims or actions against and in relation to Sara Murray and others". Murray held currently holds around 26.8% of BIG shares, which have plummeted more than 38% since Wednesday’s announcement.