Official figures released by the Office for National Statistics (ONS) yesterday (12 August) show that the UK job market continues to weaken. Unemployment remains at a four-year high of 4.7% for the three months to June, whereas payroll numbers have fallen in ten of the last twelve months. Job vacancies have slumped for the 37th consecutive month, falling to the lowest level since April 2021 at 718,000.
The Telegraph reported yesterday that, according to the ONS, the downturn has not been felt evenly across sectors. Hospitality and retail account for a high proportion of the job losses, and the importance of these sectors to the rural economy has placed it under strain. Asked by the newspaper for comment, the Countryside Alliance voiced our concern for rural communities:
“Continued falls in employment figures are concerning in all parts of the country, not least in rural areas that are already facing a ‘rural premium’ of higher living costs.
“Smaller rural businesses have been disproportionately impacted by increases in employers’ National Insurance, and when the Chancellor’s Family Farm Tax kicks in next April, things will be harder still for the producers of the food we eat.
“A rethink on inheritance tax is one of the clearest steps the Chancellor could take now to protect rural jobs.”
David Bean, Parliament and Government Relations Manager
The Chancellor of the Exchequer, Rachel Reeves, defended her stewardship of the economy during a press conference in Belfast that afternoon. She insisted that the government has been “creating more jobs” since taking office, even as job vacancies have declined and staff numbers have dropped. Ms Reeves acknowledged that “there is more to do,” but argued that in its first year the government has managed to return economic stability, grow the economy, and bring down costs – particularly mortgage costs – for struggling families.
Pressed directly on the Alliance’s argument that national insurance (NIC) hikes and the looming Family Farm Tax are threatening rural jobs, the Chancellor’s response was not encouraging. She maintained that the tax increases from her October Budget did not target ‘ordinary working people’. Employees’ National Insurance, income tax, VAT, and fuel duty have not risen, she argued, which has maintained protection for hard-pressed families.
She continued to present her changes to agricultural property relief (APR) as a targeted measure that favours small-scale farmers. Allowances mean that properties valued under £3 million, if owned jointly with a partner, qualify for zero inheritance tax. Larger agricultural properties face a reduced inheritance tax rate of 20%, which can be spread interest-free over 10 years.
Representatives of rural communities and the farming sector, including the Alliance and the NFU, have countered that high land valuations mean smaller, relatively cash-poor family farms will inevitably be caught up in the levy. The tax risks forcing new generations of family farmers to sell off vital farmland to meet a bill that it would be unviable to pay off using the often-marginal revenues market conditions allow them to make, while continuing to support their business and family.
The Countryside Alliance will continue to call for policy reassessment, specifically through recalibrated inheritance and business taxation to safeguard rural livelihoods.