James Dyson Says ‘Spiteful’ Budget Will Kill Start-Ups

Businessman James Dyson has called the new Labour government’s first Budget “spiteful” and predicted it would mean the “death of entrepreneurship”.

In an opinion piece in The Times newspaper Dyson, founder of the home appliance maker that bears his name, predicted the Budget would “kill off” growth and would cause small businesses to suffer.

“Make no mistake, 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,” he wrote, referring to the closure of an inheritance tax loophole in last week’s Budget.

“It detests the private sector and has chosen to kill off individual aspiration and economic growth.”

Tax loophole

He criticised Budget measures to close a loophole in inheritance tax for farmers with assets of more than £1m in assets, as well as a reduction in the generosity of business property relief on inheritance tax for wealthy entrepreneurs.

Dyson is the UK’s wealthiest resident, with a fortune estimated by Bloomberg at $21 billion (£16bn), and is also a major landowner with an estimated 36,000 acres of farmland across five counties in England.

The Budget “is killing off established family businesses, and any incentive to start new ones”, Dyson wrote.

“Reeves ignores the fact that the wealth of this nation is built not by government but by private enterprise and entrepreneurs.

“It beggars belief that Labour proudly boasts of trying to attract foreign investment, while at the same time eviscerating home-grown businesses.”

Dyson has been an outspoken voice on UK government policy and was one of a limited number of high-profile business figures who backed the UK’s withdrawal from the European Union.

His company’s first wearable product is a pair of £820 air-purifying headphones, launched in 2022.

Reaction to Labour’s Budget from the business sector has generally been cautiously optimistic, with the Confederation of British Industry (CBI) saying it would help unlock private sector investment in the country’s infrastructure in the long term.

Business burden

The CBI criticised increases in the employer cost base, such as National Insurance contributions.

“It’s vital that the government doubles down on its partnership with business to unlock the investment that is needed to drive opportunity around the UK,” the CBI said in a statement.

Reeves’ budget seeks to raise £40bn in tax revenues in a move Labour said was aimed at boosting the UK’s economy while shoring up public finances.

Entrepreneurs involved in start-ups said they were concerned that changes to capital gains tax and Business Asset Disposal Relief (BADR) would make the UK less attractive for risk-taking businesses.

But Diane Gilpin, founder and chief executive of green logistics technology start-up Smart Green Shipping, said she did not believe the changes would be a death-blow to UK start-ups.

“This increase isn’t going to stop the entrepreneurs building for the future of our planet,” she said.