The disruption caused by the irrational, massive, change in Inheritance Tax on companies is far reaching and damaging, says Doug Hart, Chairman, Hart Doors. There has been much mention of the affect IT changes on farmers but not the devastating effect on manufacturing industry particularly those in family ownership.
The removal of the working capital under this tax regime weakens the fragile financial balance at best and could force a sale at worst. Many companies, frequently multi-generational, exist through hard work and long hours frequently all balanced on a knife edge of profit or loss while fighting for survival.
The imbalance of risk created by employee rights, increasing red tape, exponential increases in financial risk from inflation and legislation are a massive disincentive and these factors will take many out of business.
The backbone of the country is manufacturing and engineering, far from being a leech on society is a fundamental to a healthy society and if it is disincentivised and blead to death will be the total end for private enterprise causing total reliance on other countries exposing the economy of this country hugely.
Looking at World disruption now, ‘Great Britain’ will we become as a small, if hardly existent, player. The change in Inheritance Tax will accelerate this by effectively removing at best working capital and at worst forcing the sale of companies.
This could be through amalgamation, close down or relocation out of the country, destroying our manufacturing base a bit at a time. This ongoing erosion of small companies and their highly specialist skills is continuing at increasing pace.
In Newcastle in times past you could get anything in engineering done thanks to huge skills and capacity resource. This has virtually gone. We are increasingly buying foreign made product produced by multinationals from countries with advantages against us. We shall see our wealth creating manufacturing industry destroyed irrevocably.
The uncertainty currently through over spending by the Government as to where they are going to steal money from next in the upcoming budget is a major worry and is preventing developments going ahead.
It is interesting to note the great announcement about infrastructure and job creating projects which included the Scotch Corner to Penrith duelling project. Sadly this much needed project has now been ever so quietly shelved.
