Sir Keir Starmer has rejected Sir James Dyson’s condemnation of Labour’s first Budget as “spiteful” and being the “death of entrepreneurship”.
Downing Street defended the tax, borrow and spending blueprint unveiled by Chancellor Rachel Reeves last week as a “balanced approach”.
No10 also highlighted moves to encourage more investment in the UK.
Sir James launched a stinging attack on the Budget on Monday.
But the Prime Minister’s official spokesman said: “The approach to this Budget was to be upfront and honest with the British public about the dire state of the public finances that the Government inherited and to be upfront and honest about the difficult choices and trade-offs needed in order to restore economic stability and lay the foundations for economic growth.
“At this Budget, the Government set out a corporate tax roadmap to give investors certainty over the course of the Parliament in relation to corporation tax which will remain the lowest level in the G7, maintained our world-leading capital allowances, including permanent full expensing and £1 million annual investment relief, it preserves the generosity of R&D reliefs, it develops a new process for increasing tax certainty...for major investments.
“The Government has taken a balanced approach.”
Earlier, Home Secretary Yvette Cooper insisted that the new Government was seeking to support economic growth in Britain and “opportunities for everyone in the future”.
She argued that the Budget would fix the UK’s dire public finances and that “we can’t just keep ignoring those problems”.
She hit out after an extraordinary attack on the Budget by inventor and designer Sir James, 77.
The super-wealthy business tycoon slammed Labour’s decision to hike inheritance tax on farms and family businesses.
He accused the Chancellor of “spiteful” politics with her fiscal plan including putting VAT on private school fees.
“Rachel Reeves is killing off established family businesses, and any incentive to start new ones, with her 20 per cent Family Death Tax, levied each time a family business passes a generation,” he wrote in The Times.
“Every business expects to pay tax, but for Labour to kill off homegrown family businesses is a tragedy. In particular, I have huge empathy for the small businesses and start-ups that will suffer. Labour has shown its true colours with a spiteful Budget.
“Make no mistake, the very fabric of our economy is being ripped apart. No business can survive Reeves’s 20 per cent tax grab. It will be the death of entrepreneurship. Think of the jobs for “working people” that will be lost — or never created.”
But Paul Johnson, director of the Institute for Fiscal Studies, insisted few farms would be affected by the IHT changes and spoke of “special pleading by some extremely wealthy people”.
Asked about Sir James’ “spiteful” claim, Ms Cooper told Sky News: “I don’t agree with that.
“This is about a very positive Budget to fix the foundations but also to be able to grow our economy, to support growth and opportunities for everyone in the future.
“Because if you don’t sort out the public finances then that is going to hit our economy, that is going to hit businesses across the country, that is going to hit growth.
“It’s also going to hit families across the country and it’s going to hit the public services that every single one of us depend on. We can’t just keep ignoring those problems.”
She added: “It does mean difficult decisions.
“But what Rachel Reeves has done is set out the way to start fixing those problems for the future.”
The Budget raised taxes by £40 billion, including a £25 billion rise in National Insurance for employers, borrowing by £32 billion, to boost public spending by some £70 billion.
The independent Office for Budget Responsibility said the huge spending increase would initially increase economic growth but that it would then fall back.
GDP growth is forecast to be 1.1% in 2024, 2.0% in 2025, 1.8% in 2026, 1.5% in 2027, 1.5% in 2028 and 1.6% in 2029.
Consumer goods giant Dyson, best known for the invention of the bag-less vacuum cleaner, announced in the summer plans to cut up to a third of its UK workforce as part of global changes.
The business created by Sir James, who has been critical of UK economic policies, moved its headquarters to Singapore in 2019.
Dyson has around 3,500 UK employees, with offices in Wiltshire, Bristol and London.
Sir James previously claimed that growth had become a “dirty word” when Rishi Sunak was Prime Minister, and he accused the then Tory government of having a “stupid” and “short-sighted” approach to the economy and business in the UK.
