Rachel Reeves risks nation's growth with inheritance tax raid

Rachel Reeves must reverse her planned inheritance tax changes or risk collapse of family-run firms vital to growth, building chiefs have warned.

Wernick Group, one of Britain's oldest family-run construction companies, warned that Labour's plan to reform Business Property Relief (BPR) from April 2026 would "cripple" long-established, family-run firms at the heart of UK construction.

David Wernick, executive chairman of the Wernick Group, said: "We've spent nine decades building a business that supports hundreds of families, drives growth and underpins some of Britain's most important infrastructure - these changes put all of that at risk."

"Family-run firms like us invest for the long term. We train apprentices, create stable careers and reinvest profits locally to build the communities we serve."

"When ownership passes between generations, there's no cash crystallisation event to fund a substantial tax bill. In many cases, the only way to pay it would be to sell the company or take on crippling debt - both of which would destroy jobs, investment and critical supply chains.

"It's not just companies like ours at risk, but the wider supply chain - the independent hauliers, plant hire firms and contractors that make up the backbone of UK construction. If they disappear, Labour's ambitions for growth and the 1.5 million new homes of tomorrow will disappear with them."

The Wernick Group was founded in 1934 when Samuel Wernick, who made poultry crates and sheds for his own business, placed a sign outside his family home in Wolverhampton that read: "Sheds for sale - enquire within."

The company's yearly revenues now exceeds £240 million and employs more than 900 people across 45 centres, supplying modular buildings, site accommodation and power solutions for schools, hospitals and major infrastructure projects nationwide.

But Mr Wernick warned the reforms would create a substantial tax bill for his company alone - a liability that could only be met through large-scale asset sales or heavy borrowing.

He told how this undermines jobs and investment.

Esther McVey, Conservative MP for Tatton, said: "Family businesses are the backbone of Britain. They've survived recessions, world wars and countless challenges, but they will not survive Labour's decision to tax them out of existence.

"Labour's inheritance tax changes sound the death knell for family businesses - forcing firms that have been running for generations, creating the jobs of tomorrow and investing in our communities, to sell up just to meet the tax bill.

"The Chancellor should be backing British business, not taxing it into decline."

Industry bodies have warned that without urgent clarity or exemption in next month's Autumn Budget, the result could be a wave of business closures, job losses and reduced investment across the UK - and with it, the collapse of the construction capacity needed to drive economic growth.

From April 6 2026, the 100% BPR will be capped at a combined £1 million for both BPR and Agricultural Property Relief (APR).

Assets above this £1 million limit will receive 50% relief, resulting in a 20% inheritance tax charge on the remaining value.

The Construction Plant-hire Association has urged the Government to adopt a "fairer approach" by exempting share transfers in family businesses from inheritance tax for seven years, provided the company remains under family ownership during that time.

The warning comes as official data showed the construction workforce remains nearly 290,000 below its pre-pandemic level.

The Treasury has been contacted for comment.