Labour came to office promising to grow the economy. Eleven months in, the centrepiece of its strategy appears to be taxing the people who actually create wealth until they pack up and leave. The tax changes that took effect this April are not a plan for growth. They are a plan for managed decline, and the bill will ultimately fall on every working family in the country.
A Raid Dressed Up as Fairness
From April 2026, Labour abolished the non-domicile regime and replaced it with a residence-based system. It capped inheritance tax relief on business and agricultural assets at £1 million, slapping a 20 per cent charge on everything above that. And it pushed capital gains tax on carried interest up towards 36 per cent. Each measure was sold with the same word: fairness. But there is nothing fair about a policy that shrinks the tax base and leaves everyone else to fill the gap.
Wealthy, internationally mobile individuals do not sit still and pay more. They move. We are already seeing the evidence: entrepreneurs relocating, investors pulling capital out, and family firms restructuring or selling up rather than face a death tax they cannot afford. When those people leave, they take their spending, their investment and their tax contributions with them.
The War on the Family Farm
Nothing captures Labour's misjudgement better than the assault on family farms. Capping agricultural relief at £1 million sounds modest until you remember that farmland is worth a fortune on paper while generating wafer-thin margins in practice. A farm can be asset-rich and cash-poor at the same time, and Labour's tax now forces families to sell land just to pay the bill on inheriting it. Generations of stewardship undone by a Treasury spreadsheet.
Fiscal Drag: The Quiet Tax on Everyone Else
While the headlines focus on the wealthy, the silent raid continues on ordinary earners. Income tax thresholds remain frozen, so every pay rise drags more workers into higher bands without a single rate being announced. It is a tax rise by stealth, and it is hitting nurses, tradesmen and middle managers who were never the intended targets of Labour's class war.
What Reform UK Would Do
Reform UK would do the opposite of this government. We would lift the income tax personal allowance to £20,000, taking millions of the lowest earners out of tax altogether. We would reverse the family farm tax and protect the businesses that employ local people. And we would build a tax system that rewards work, investment and ambition rather than punishing it. You do not grow an economy by chasing away the people who power it. You grow it by giving them a reason to stay.