Businesses will have to close due to the introduction of inheritance tax on family firms and farms, a North Yorkshire MP has warned.

Kevin Hollinrake, who is also the Shadow Business Secretary, also said: “Labour has revealed that they were not truthful with the British public, presenting a Budget filled with broken promises and marked by significant tax increases and heavy borrowing.”

The MP for Thirsk and Malton continued: “Labour had pledged not to raise taxes on working people, yet they’ve imposed a £25 billion tax hike by raising National Insurance, pushing the tax burden to an unprecedented level in the nation’s history.

“The Office of Budget Responsibility say 76% of the NI hike will come out of workers' wages. So bad for business, bad for workers, bad for growth.”

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“The application of 20% Inheritance Tax to family businesses and family farms for the first time will be devastating for local communities in Thirsk and Malton as it will see businesses closing to pay taxes rather than being passed from one generation to the next.”

Mr Hollinrake also accused Labour of increasing borrowing, despite previous promises not to, which the OBR says “will drive up inflation and mortgage rates, impacting working families.”

The MP added: “Furthermore, as admitted by the Chancellor, they have “fiddled the figures” by abandoning fiscal rules, allowing debt to grow unchecked.

“The core reality of this Budget is clear: Keir Starmer and Rachel Reeves always intended to raise taxes, allow borrowing to surge, and break their promises—they simply lacked the courage to admit it to the British public before the election.”

(Image: David Skaith)

However, David Skaith, the Mayor of York and North Yorkshire, branded the budget as ‘historic,’ the first to be delivered by a woman, arguing “the scale of negligence” by the previous Conservative government left such a mess “difficult choices” had to be made.

He continued: “I welcome the commitment to bus services, this funding will enable us to begin building an integrated transport network that puts passengers first. The continuation of the bus fare cap, albeit at £3, protects against hikes in rural bus fares and the loss of services.

“I am pleased to see confirmation of the delivery of the TransPennine Route Upgrade, improving the connection between York and Manchester. This link is vital to ensure people can move across the North for work and leisure.

“Potholes are a huge concern in York and North Yorkshire. There is a vast road network to maintain, I am therefore pleased that the Government have gone beyond their manifesto commitment on funding for potholes.”

The York-based clothing store owner added: “This is a Budget that will start to deliver change across Britain and here in York and North Yorkshire. I look forward to continuing to work closely with the Government to secure the growth, investment, and change that people across York and North Yorkshire need."