Ele Ludemann: More & higher taxes not answer

Sir James Dyson says Labour’s Budget will rip apart the fabric of the UK economy:

What is it about British families that Labour hates so much? In a single ignorant swipe at aspiration, Rachel Reeves is killing off established family businesses, and any incentive to start new ones, with her 20 per cent Family Death Tax, levied each time a family business passes a generation.

Whether it is independent traders on the high street, farmers growing our food or entrepreneurs challenging the status quo, family firms are the lifeblood of the economy. There are nearly 5 million family businesses in the UK — responsible for about 14 million jobs, contributing hundreds of billions in taxes that fund public services.

Family firms provide the continuity and long-term investment this country desperately needs. They are unique businesses founded on passion, hard work and ideas. Beyond that, their contribution to communities, charities and the wider economy is huge. These businesses could not be further removed from the short-term profit focus of private equity and public companies. . 

This isn’t just true of UK family businesses. It is especially applicable in New Zealand when almost all – around 90% – of businesses are small or medium and many perhaps most, are family owned.

Reeves ignores the fact that the wealth of this nation is built not by government but by private enterprise and entrepreneurs. These working people toil outside the safety of public employment, to fund her spending sprees with their taxes. The state is there to support private individuals in their endeavours, not the other way round.

My family and I know what it is to start a family enterprise. We risked it all, signing everything over to the bank in exchange for the loan to develop my first product. We took the ultimate risk, when no one else would support us.

I was in my fifties before Dyson first turned a profit and now, at 77, I remain hands-on in the business with my son, Jake. Unlike many other founders, we haven’t cashed in. We have skin in the game — we care about our business, the futures of our employees and the happiness of our customers. We invest and take huge risks, but our survival is dependent on success in the marketplace. We could lose it all overnight.

The hard work and sacrifices which go into growing and maintaining successful businesses is rarely seen by anyone but the few who do the work and make the sacrifices.

Dyson operates in more than 80 countries and we employ thousands here — mostly engineers and scientists. We have invested billions in UK research and development and my family is listed among Britain’s highest taxpayers.

In addition, each year we invest £12 million in our own university, educating the next generation of this country’s engineers, who pay no tuition fees while studying for their degree and earning a Dyson salary.

We are also supporting those striking out to make their ideas a reality through our global innovation award. It has financially supported over 300 new product start-ups which are solving challenges facing the world.

This sort of philanthropy is not unusual from family-owned businesses.

All this from one family firm, started in our home near Bath by an arts graduate who was already in debt. A family company can do this because it takes a long-term view and can invest in things it values, altruistic or otherwise.

Public companies and venture capitalists, beholden to quarterly reporting and an annual bottom line, are about maximising short-term profit. Is it not perverse that a socialist government should favour these companies, over the long-term curation that is the hallmark of family businesses?

In recent years, we have also built up a farming business because we believe that sustainable, nutritious food production is vital to this country’s food security and health. Dyson Farming now employs 270 people, and we are all passionate about producing high quality, tasty food for British tables — and green electricity for British homes, from our anaerobic digesters. Last year, we produced 40,000 tonnes of wheat, 9,000 tonnes of spring barley, 12,000 tonnes of potatoes, 29,000 tons of sugar beet and 1,250 tonnes of year-round strawberries, as well as rearing 2,000 sheep and 800 cattle.

Farming is an incredibly risky business, subject to the vagaries of the weather and commodity prices — all for little profit. We have been fortunate to be able to invest £140 million in infrastructure improvements (in addition to the cost of the land) to improve our farms for succeeding generations. But there is precious little profit to be made for the thousands of hard-working and undervalued farmers who weave together the fabric of the countryside.

This too is not confined to the UK.

Farmers across Britain do it because they want to make a difference and believe passionately in farming. As a result of Reeves’s plans, we will be even more reliant on overseas food imports delivered through unpredictable supply chains. That should keep the government awake at night.

Family businesses are an antidote to the short-termism which is the blight of the British economy and of which everyone complains. Family businesses are in the blood: a shared journey between the business and the family across the generations. Britain will sorely miss them.

Every business expects to pay tax, but for Labour to kill off homegrown family businesses is a tragedy. In particular, I have huge empathy for the small businesses and start-ups that will suffer.

Labour has shown its true colours with a spiteful budget. It detests the private sector and has chosen to kill off individual aspiration and economic growth.

New Zealand Labour tells us it has learned from its election loss.

It hasn’t mentioned death taxes but its first, and so far only, public indication of possible policy for the next one has been about capital gains and wealth taxes.

Too few and too low taxes is not the source of New Zealand’s economic woes, it is wasteful spending.

The current government has made a start in reducing the waste but there is still a lot more to cut.

Higher and more taxes is not the way to prosperity for the country and its people.

We need higher productivity and business growth neither of which will be achieved by taxing more.

Ele Ludemann is a North Otago farmer and journalist, who blogs HERE - where this article was sourced.