Even power cuts and the three-day week seem preferable to today’s circumstances for businesses
Daily Telegraph 13/01/26
While the voice of big business is seldom absent from public debate with its professional lobbying and media operations, family businesses receive less of a hearing, which is surprising because they comprise 85 per cent of all British businesses and provide more than half of the UK’s private-sector employment.
To get a sense of what the people who run the businesses, that make up the backbone of our economy, think about the current economic and political climate, the Jobs Foundation commissioned a poll of more than 1,100 family business leaders. The verdict is in, and it’s not pretty.
It is important to say from the outset that their deep sense of disillusionment is not confined to the current government. Just one in five say that they trust the Conservatives the most to help their business thrive – a poor result for a party which has historically received strong backing from Britain’s entrepreneurs.
Reform UK is most trusted by just 16 per cent, offering further evidence that they are yet to set out a credible economic prospectus.
Labour and the Green Party come out worst, with an equal sic per cent trusting them, but the overall winner is “none of the above”, with a massive 43 per cent saying they don’t trust any of Britain’s political parties with the economy.
After doing much to court businesses before the election, with Labour’s “scrambled eggs and smoked salmon offensive”, just 18 per cent of family business leaders now believe that the Government has growth as their No 1 mission.
The increases to employer’s National Insurance have made it much more expensive to employ people, but the cuts to inheritance tax relief for business assets have also taken the wind out of the sails of family businesses.
Whist the increase in the planned threshold after which inheritance tax is due, from £1m to £2.5m, is welcome, it remains the fact that most large businesses in Britain started out as family businesses. The likelihood of what is today a small business growing into a large business is going to be reduced by what is clearly an anti-growth measure.
One particularly alarming aspect of our poll was that just 45 per cent of family businesses were aware that these changes are coming into effect, perhaps assuming that they applied only to farms given the controversy those changes generated.
By slapping new taxes on assets – land, machinery, buildings and everything else that makes a family business viable – the Government risks triggering a succession crisis that will break up historic firms. Once business owners realise that their children will have to sell off buildings, equipment or chunks of the business just to pay a tax bill, the motivation to expand diminishes. As one CEO told us, the incentive to build for the long term is simply gone.
This effect will only worsen as awareness of the impending tax raid grows.
Given Britain’s poor investment record since the 1990s and the Chancellor’s supposed desire to reverse this trend, the decision is bewildering.
It is perhaps no wonder that just 17 per cent of business owners would recommend setting up a business in the UK. In addition, these entrepreneurs are now five times more likely to say the 1970s – a decade of power cuts and the three-day week – was a better time to run a business than 2020s.
This is not nostalgia speaking. It is a rational response to a policy environment that increasingly penalises effort, investment and long-term thinking. Family businesses do not measure success in quarters but in generations. They invest patiently, train locally and anchor jobs in communities that too often feel left behind. When the tax system makes it harder to pass on a viable enterprise, it strikes at the very foundations of that model.
The tragedy is that the Government claims to want exactly what family businesses are best at providing: sustainable growth, secure employment and regional prosperity. Yet, by raising the cost of succession and layering uncertainty onto already stretched firms, it is actively discouraging the behaviours it says it wants to promote.
Our polling shows that business owners know what would make a difference: lower energy costs, a reversal of the rise in employer National Insurance and a tax system that rewards rather than punishes long-term investment. None of this requires ideological reinvention. It requires listening.
If ministers are serious about growth, they must listen to our family businesses, and they might yet rediscover what a pro-growth agenda really looks like.
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