Family businesses across the UK are reporting an uplift in confidence following the change in Prime Minister, with new data in Family Business UK’s ‘Family Business Pulse’ showing growing optimism about the wider UK economy.
The latest quarterly survey of more than 530 family business leaders, conducted during the transition to Prime Minister Andy Burnham, shows a sharp rise in confidence in the UK’s economic prospects. Nearly two-thirds (63%) of family firms are now confident about UK economic growth over the next 12 months, compared with 48% in Q1. The overall net confidence score for the UK economy has increased from +17% to +40%.
Confidence levels were strongest in the North of England, with 70% of family businesses in the North West, North East and Yorkshire expressing confidence in UK economic growth over the coming year, compared with 60% in London and the South East. This optimism coincides with the launch of No.10 North.
Despite the positive outlook, concerns surrounding changes to Business Property Relief (BPR) and Agricultural Property Relief (APR), which came into effect on 6 April, remain a major issue for family businesses.
- Almost six in ten family firms surveyed (58%) say they are now being affected by the changes, up from 51% in the previous quarter.
- A third (33%) of family businesses have sought legal or professional advice over the past year.
- Medium and larger family businesses continue to be the most impacted, with 65% of firms employing between 50 and 249 people reporting that they are affected by the changes.
- The survey also highlights the impact of BPR/APR on growth plans, with 24% of family businesses having paused or cancelled investment projects over the last 12 months, up from 15% in the previous quarter.
Neil Davy, Chief Executive Officer of Family Business UK, said:
“Family businesses have responded warmly to the change at No.10 and launch of No.10 North and there is a renewed sense of optimism about the UK’s growth prospects.
“Family businesses are natural partners in the Government’s ambition to grow the economy. However, the changes to Business Property Relief (BPR) and Agricultural Property Relief (APR) mean that many are being forced to withhold capital that would otherwise be earmarked for investment in recruitment, skills, training and community projects, in order to protect against unexpected inheritance tax liabilities.
“If the Government wants to unlock the full potential of family-owned businesses, it should reopen the conversation on recent changes to BPR and APR and fully assess the negative impact they are having on investment and growth which the economy and communities across the UK need.
“With the right policy environment, family firms will create jobs, develop skills and provide opportunities for economic growth in every part of the country. In doing so, they can play a key role in helping the Prime Minister deliver on his ambitions.”