Tag: Family Business

Family businesses call on Chancellor to cut employment costs and tackle youth unemployment

Posted on by fbuk

Family businesses are calling for action in the Budget to reduce spiralling costs of taking on young workers, with more than a third (38 per cent) saying they have become a significant barrier to recruitment.

In its submission to the Treasury ahead of the Budget, Family Business UK (FBUK) sets out a package of measures to encourage businesses to recruit, invest and grow, including a reduction in employer National Insurance Contributions (NICs) for younger workers, targeted incentives to help young people into work and reforms to the tax system to support long-term business ownership.

The call comes as youth unemployment stands at 16.2 per cent and around one million young people are not in education, employment or training (NEET). FBUK warns that rising employment costs, limited job opportunities, skills shortages and the growing impact of artificial intelligence are making it harder for young people to secure their first foothold in the labour market.

FBUK is now calling for a six-month employer NICs holiday for family businesses recruiting people aged 18 to 24, or up to 30 for those entering their first job. The organisation estimates that the measure could support around 100,000 recruits.

Neil Davy, chief executive of Family Business UK, said: “Family businesses want to invest, grow and create good, long-term jobs. But rising employment costs are making it harder for firms to take on staff, just when the country needs businesses to create more opportunities for young people.

“We need a practical package that makes it easier for employers to recruit and gives young people a better chance of getting into work. Cutting the cost of employing young people, supporting paid work experience and apprenticeships, and extending help to those at risk of unemployment would make a real difference.

“Family businesses account for 93 per cent of private sector firms in the UK and employ 15.8 million people. If we help these businesses create more opportunities for young people, the impact on employment and communities across the country could be transformational.”

FBUK’s proposals to address youth unemployment include:

  • Employer NICs relief: a six-month NICs holiday for family businesses taking on young people aged 18 to 24, or first-time employees up to the age of 30.
  • Paid internships: a six-month Family Business Internship Incentive, with grants of £3,000 to £5,000 for businesses offering structured placements to 18- to 30-year-olds, including training, mentoring and a named supervisor. A further payment could be made where placements lead to permanent jobs or apprenticeships.
  • An expanded Youth Guarantee: extending support to school and college leavers, young people at risk of unemployment and those outside the Universal Credit system, with a focus on careers advice, employability and job matching.
  • More apprenticeship support: extending starter-wage assistance to labour-intensive and socially important sectors, including retail, hospitality, leisure, education and care.
  • A more responsive Growth and Skills Levy: improving guidance on how funds can be used and making it easier for businesses to transfer funding through their supply chains and local business networks.

FBUK is also calling for a more predictable approach to minimum wage policy. It wants the Government to assess the employment consequences of planned alignment between the National Minimum Wage for younger workers and the National Living Wage, and publish a youth-employment impact assessment before each further step towards equalisation. It also proposes a fixed three-year cycle for reviewing employment wage policy, giving employers greater certainty when planning recruitment and investment.

Alongside employment, the submission calls for Chancellor John Healey to use the Budget to reverse his predecessor’s controversial changes to inheritance tax for family firms. It calls on the Treasury to restore 100 per cent Business Property Relief (BPR) with no upper threshold, introduced by Labour Chancellor Denis Healy in 1976, reversing the changes that FBUK says continue to undermine investment, recruitment and succession planning among family-owned businesses.

Although the Government increased the threshold for inheritance tax to apply to family firms’ assets from £1 million to £2.5 million following a fierce backlash, FBUK says the changes have not resolved the fundamental problem. A survey of more than 530 family-business leaders by FBUK found that 58 per cent expected to be affected by the reforms, 24 per cent had paused or cancelled planned investment, and 23 per cent had reduced headcount or paused recruitment.

FBUK argues that family businesses should not face a tax burden on transferring ownership that puts them at a disadvantage compared to publicly listed, private equity-backed and overseas businesses. It warns that money diverted from productive investment to meet inheritance tax liabilities could otherwise support jobs, training, innovation and growth.

The submission also calls for business energy costs to be reduced, by extending to businesses the approach recently taken for households, under which 75 per cent of the costs of obligations to use renewable energy are shifted from energy bills to general taxation. Three in ten family firms identify energy costs or volatility as their main barrier to growth, with retail, hospitality and leisure businesses particularly exposed.

FBUK is further urging the Government to undertake wholesale reform of business rates, moving towards a more progressive system in which different portions of a bill are charged at different rates. Its research finds that 43 per cent of family-owned businesses identify business rates as the tax having the greatest impact on their operations.

Other recommendations include ruling out a one-off or annual wealth tax, providing greater certainty over the tax system, improving access to scale-up finance and introducing incentives to encourage long-term investment in UK private businesses. FBUK also proposes a Community Investment Tax Relief to encourage family businesses to invest in local assets, infrastructure and community initiatives, with an initial targeted pilot potentially focused on youth employment.

Neil Davy added: “Family businesses are long-term investors in the UK economy. They create jobs, support local supply chains and sustain communities, often across generations. But they need a tax and regulatory environment that gives them the confidence to keep investing in Britain.

“Restoring Business Property Relief in full, reducing employment and energy costs, and reforming business rates would help unlock that investment. The Budget should be an opportunity to back the businesses that already contribute £422 billion in tax each year and generate £985 billion in economic value, helping them create jobs and deliver growth across the country.”

 

Family businesses welcome long-term vision but call for stability and action

Posted on by Vanessa Barrett

Responding to the Prime Minister’s speech at Labour Party Conference, Fiona Graham, Chief Operating Officer at Family Business UK, said:

“There has been a strong emphasis on hope and optimism in Liverpool this week, and the Prime Minister’s focus on a long-term vision for the economy is welcome. Family businesses want to share that optimism, but they need stability, certainty and the confidence to plan for the future.

“Making it easier for British businesses to access public procurement and putting greater power in the hands of local leaders could offer real opportunities. Family firms are firmly rooted in the places they serve, creating jobs, investing locally and supporting communities for generations.

“But ambition must now be matched by action. The speech was light on how the Government will tackle the cost of doing business, and attention will now turn to a critical Autumn Budget at the end of the month.

“Family businesses are already dealing with the consequences of changes to Business Property Relief. The Budget is an opportunity for the Government to rebuild confidence and create the conditions family firms need to employ, expand and invest for the long term.

“Family businesses want to work collaboratively with the Government and are ready to play their part in delivering growth. But optimism cannot be built on rhetoric alone. It will depend on the choices the Government makes and the confidence those choices give businesses to invest in the future.”

Family businesses witnessing a bounce in UK growth prospects but caution remains over inheritance tax changes

Posted on by Vanessa Barrett

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.”

Manchester’s Moment: What it Means for Family Businesses

Posted on by Vanessa Barrett

There was a certain symbolism in Family Business UK’s NowGen Community Roundtable taking place in Manchester on Thursday. 

On the same day voters went to the polls to elect the city’s next Mayor, family business leaders gathered in the heart of the city that has become the political and economic focal point of the new Government’s ambitions. Under Prime Minister Andy Burnham, Manchester is no longer simply one of Britain’s great cities. It is now home to No.10 North – the central hub for the Government’s devolution agenda and its ambition to deliver “growth in every postcode”.

That made Manchester the ideal place to discuss what comes next for Britain’s economy.

The city is now recognised as the UK’s fastest-growing major economy. While that success cannot be attributed solely to Andy Burnham’s near decade as Greater Manchester Mayor, there is a widely held view within the business community that his mayoralty demonstrated the value of meaningful engagement between government and business. Employers were seen not simply as stakeholders to consult, but as partners in delivering economic growth.

There are early signs that same approach is being carried into Government.

Within days of entering Downing Street, the Prime Minister invited FBUK to join the first discussions with leading business organisations on growth, investment, skills and jobs. For a sector that contributes so much to the UK’s economy and communities, it was an encouraging indication that family businesses will have a voice as the Government develops its economic agenda.

Our NowGen Community Roundtable, kindly hosted by Collinson Grant, reinforced why that partnership matters.

The discussion brought together family businesses from a wide range of sectors, sizes and generations to meet Bill Esterson MP, who spent eight years as Labour’s Shadow Business Minister before becoming Chair of the Energy Security and Net Zero Committee. As part of the Government’s efforts to rebuild confidence and strengthen its relationship with business, he took time to hear directly from family business leaders about the opportunities and challenges facing firms across the country.

Although every business around the table had its own story, there was one consistent theme.

Family businesses are rooted in the communities they serve. They create local jobs, invest for the long term and build relationships measured in generations rather than electoral cycles. Whether operating in manufacturing, hospitality, professional services or retail, they share a commitment to creating opportunities for local people and strengthening the places they call home.

That is precisely why family businesses are natural partners in delivering both devolution and the Government’s wider growth agenda.

If growth is genuinely to reach every postcode, it will depend on businesses that already have deep roots in the areas they call home. Family firms understand local labour markets, local supply chains and local communities better than almost anyone. They are uniquely placed to help translate national ambition into local economic success.

There was broad agreement that the new Government has made an encouraging start. Recent announcements aimed at tackling youth unemployment, including measures to remove financial barriers that can discourage some young people from taking up apprenticeships, recognise the important role employers play in creating opportunities for the next generation. Family businesses have long been at the forefront of providing apprenticeships, first jobs and long-term careers, making them natural delivery partners for this agenda.

Equally, the discussion highlighted areas where businesses will be looking for the Government to go further.

The decision to extend VAT relief on household energy bills was widely welcomed. However, many questioned why energy-intensive businesses facing the same prolonged period of high energy costs were not afforded similar support. For firms looking to invest, expand and recruit, competitive energy costs remain a vital part of the overall business environment.

Conversations also returned to Business Property Relief. The business community remembers the extensive engagement that took place before the previous Government entered office, only for subsequent reforms to leave many family businesses questioning whether Government fully understood the realities of long-term ownership, succession and investment. That experience inevitably means early optimism is tempered by caution.

Ultimately, confidence will not be judged by the tone of early engagement alone, but by the policy decisions that follow.

The Autumn Budget is likely to be one of the defining moments of the Prime Minister’s first year in office. It presents an opportunity to demonstrate that the Government’s reset with business is more than a change in rhetoric by creating the conditions that encourage businesses to invest, grow and create jobs with confidence.

Family Business UK’s Building Britain for Generations Policy Agenda provides a practical roadmap for doing exactly that. From supporting apprenticeships and employer-led skills, to encouraging investment, strengthening local economies and reducing unnecessary barriers to growth, it offers constructive proposals that align closely with the Government’s ambitions.

There is a genuine opportunity to forge a new partnership between Government and family businesses – one built on trust, stability and a shared commitment to long-term growth. If the Government wants to deliver growth in every postcode, family businesses stand ready to help make that ambition a reality.

Interest Rates held at 3.75%: FBUK calls for stability to support family business growth

Posted on by Vanessa Barrett

Responding to the Bank of England holding interest rates at 3.75%: Matthew Jaffa, FBUK Policy Director, said:

“FBUK welcomes the Bank of England’s decision to hold the base rate at 3.75%. Family businesses are eager to invest, grow and create jobs, but rising cost pressures and ongoing geopolitical uncertainty have slowed the pace of expansion more than many would like.

“A sustained period of controlled inflation and lower interest rates is vital for family firms, whose long-term outlook and investment decisions are central to their success and contribution to the wider economy.”

 

Government announces further measures to tackle youth unemployment – but business confidence will be key

Posted on by Vanessa Barrett

Tackling the growing number of young people outside education, employment or training (NEET) is rapidly emerging as a priority for the new Government. 

For FBUK, the focus is welcome. We have consistently called for a stronger drive to get young people into work, shaped around the needs of local employers.  

Nearly one million young people across the UK are NEET. This is a major social and economic challenge at a time when businesses continue to report skills shortages and difficulties recruiting. 

The Government is right to focus on getting more young people into work. This week’s announcements build on a substantial programme already underway – and underline something fundamental to its success: businesses will ultimately have to provide the jobs, apprenticeships and training places. 

For FBUK, there is much to welcome. The focus on apprenticeships, employer-led skills and creating opportunities close to home is the right one. With their deep roots in communities across the country, family businesses are obvious partners in turning that ambition into jobs and opportunities for young people. 

What is the Government already doing?  

The Government’s existing youth employment programme includes: 

  • £3,000 Youth Jobs Grants for employers recruiting eligible 18–24-year-olds who have been on Universal Credit and looking for work for at least six months. 
  • 300,000 work experience and training opportunities over three years. 
  • A Jobs Guarantee, providing eligible long-term unemployed 18–24-year-olds with six months of paid employment. 
  • 50,000 additional youth apprenticeships, including fully funded training for eligible young people at smaller employers. Larger employers that have used their Growth and Skills Levy allocation will also not have to pay the usual 25% co-investment contribution when taking on additional apprentices aged 16-24.  
  • A £2,000 hiring payment for smaller employers taking on a new apprentice aged 16–24 from October 2026. 
  • Existing National Insurance relief for employers taking on qualifying apprentices under 25. 

What has the Government announced this week?  

The Government has now added: 

  • A new apprenticeship bursary of up to £4,500 a year for Universal Credit households where the interaction between benefits and apprentice earnings could otherwise leave the household worse off. 
  • Thousands of additional college places to expand access to skills and training closer to home. 

Family businesses are an obvious part of the solution  

With around five million family businesses employing 15.8 million people, family firms are rooted in communities across the country and can provide the apprenticeships, first jobs and long-term careers needed to make the Government’s ambition a reality. 

Unlocking that potential means making it easier for businesses to take on and train young people. FBUK’s Building Britain for Generations policy agenda sets out practical steps to do that – including more flexible use of the Growth and Skills Levy, a greater focus on work-ready skills and stronger incentives for businesses to invest in apprenticeships. It also calls on Government to consider how rising employment costs could affect employers’ willingness to hire younger workers. 

But none of this works without employers. 

Hiring an inexperienced young person can be a risky investment. Businesses are absorbing higher employer National Insurance contributions, substantial minimum wage increases, employment rights reforms and wider increases in the cost and complexity of employing people. 

For family businesses, this sits alongside the uncertainty created by changes to Business Property Relief (BPR). 

The Prime Minister’s call for businesses to work with Government to get more young people into work is one family businesses are ready to answer. But, as FBUK CEO Neil Davy told the Prime Minister last week, that partnership will only succeed if Government creates the conditions for businesses to invest, grow and recruit. 

The new Government has an opportunity to strike a new deal. Family businesses can help deliver its ambitions on youth employment, skills and growth. In return, Government needs to rebuild business confidence – and reopening the conversation around BPR should be part of that partnership. 

 

New PM must back family businesses

Posted on by Vanessa Barrett

Neil Davy, CEO Family Business UK. 

For family businesses, the last two years of this government have been challenging. They have been forced to adapt to almost constant uncertainty and daily speculation about the next policy in line for change or tax to be increased. 

When Labour was elected in 2024, it was with a promise to be the most business-friendly government with a clear priority to create the conditions for economic growth. We, along with other business organisations, were encouraged. 

But the promise has not yet been delivered and for Britain’s five million private and family-owned companies, the reality has been notably different. The ending of long-standing and well-understood rules on Inheritance Tax relief remain a penalty on family ownership and an existential threat to five million British businesses. 

For the new prime minister there is a golden opportunity to change that and reset relations with family firms. His plans for greater devolution and place-based growth should prioritise family businesses and put them at the heart of that mission. To succeed, he must commit to fully reverse the changes to Inheritance Tax. 

Business Property Relief and Agricultural Property Relief exist for a very clear purpose – they incentivise the business investment and long-term stewardship our country needs. But the changes to BPR and APR have achieved the opposite, forcing businesses to prioritise the short-term and tear up longstanding plans for investment and jobs. 

Worse, they have created a two-tier tax system in which family businesses are penalised — they must plan for a future liability while their non-family and foreign-owned competitors do not. That simple truth continues to weigh heavily on Britain’s family business sector. 

Our latest research shows that more than half of all family firms will still be affected by the change and, for those with more than fifty employees, the impact rises significantly. There is simply no downside to the immediate reversal of this policy change. 

Secondly, the new prime minister must commit to stopping the inexorable tax increases on all business and be relentless in creating the policies and conditions that instil confidence to invest, expand and create jobs, particularly those for young people who are bearing the brunt of these tax changes. 

Ensuring the next generation have both the skills and the opportunities takes a long-term approach is central to family businesses and critical for the future of local communities and a healthy economy. 

However, a public commitment to stick to Labour’s Manifesto commitments on tax does not fill me with confidence that the incoming chancellor will take a pragmatic and proportionate approach to tax. 

Next, the new prime minister must support growth for scale-up family businesses – particularly the medium-sized businesses often forgotten by policymakers. There are 10,000 mid-market, scale-up family businesses in the UK contributing more than £140 billion to the UK economy and employing close to one million people. Imagine the growth and tax receipts that could arise from this cluster of businesses if they were incentivised rather than penalised.  

Finally, strengthening local communities. In every part of the country family businesses are often cornerstone businesses on local high streets and communities. It is their long-term outlook and pride in place, underpinned by family values and a sustainable business model that makes them a critical part of the social fabric on which our communities and regional economies are built. 

Sadly, family businesses are mis-understood by policymakers, too often dismissed as just ‘lifestyle’ businesses. But family firms are the beating heart of our economy built around a long-term vision, a commitment to people and local communities, and a willingness to invest over decades. It is what sets them apart and makes them one of this country’s greatest economic assets. 

Government policy, led by the new prime minister, must reflect that. 

FAMILY first approach in new FBUK policy agenda

Posted on by Martin Greig

FBUK has published a new policy agenda for family businesses. Coming ahead of local elections around the UK and ongoing geopolitical uncertainty, Building Britain for Generations highlights key areas for policymakers, prioritising stability, long-term growth, investment and stewardship – all traits of family businesses.

The policy agenda calls for government, politicians and all policymakers to adopt a ‘FAMILY first’ approach that encompasses:

  • Fair taxation system
  • Accessing finance and business support
  • Mid-sized family business focus
  • Investing in local communities
  • Lowering the cost of doing business
  • Younger generation focus
FBUK Policy Agenda - Building Britain for Generations

The policy agenda, which was launched at an event in London, proposes a comprehensive set of recommendations that place the UK’s five million family businesses, and the benefits of family ownership, at the heart of efforts to grow the economy and tackle critical issues including youth unemployment.

Policy asks include:

  • Appointing a family business czar in every devolved nation and region to support long-term investment in communities and support greater fiscal devolution,
  • Targeted measures to tackle youth unemployment including an exemption from employer NICs for all family businesses offering Level 4 and above apprenticeships in AI, leadership and management,
  • A clear ‘tax roadmap’ – that gives family businesses confidence about the direction of travel, removes the fear of sudden, damaging surprises and enables long-term investments,
  • Full reinstatement of 100% Inheritance Tax reliefs (BPR and APR) for family firms, with no thresholds,
  • A simplified procurement system that places greater weight on long-term investment and delivery, regional investment and social cohesion.

The new policy agenda also calls on government to adopt a new definition of medium-sized businesses to support the forgotten engine of the UK economy. This should be companies with revenues between £10million-£100million and between 50-499 employees (mid-size is currently defined as fewer than 250 employees and less than £54million revenue).

FBUK research shows there are 10,000 mid-sized family businesses in the UK which employ 1.5 million people and create £140 billion economic output. But these established businesses remain largely invisible to policymakers and are held back by a policy environment designed for either small or large companies.

Neil Davy, CEO Family Business UK said:

“Family businesses are established pillars of Britain’s towns and cities in a way that global brands can never be – they have built a brand, reputation and workforce there, and often it’s the family name above the door.

“Yet the current policy system often favours foreign investment over established, British family businesses with the lure of lucrative tax breaks and other incentives not available to family firms. That has to change if the UK is serious about a robust domestic economy that delivers sustainable, long-term growth.”

The new family business policy agenda, which is launched on the eve of the most significant change to the taxation of British family businesses in 50 years (BPR and APR), also highlights the ongoing impact of the change to inheritance tax reliefs on family businesses:

  • The majority of family businesses (57%) say they will still be materially affected by IHT (despite changes announced by government on 23 Dec),
  • Just 1 in 10 family businesses believe they will escape the tax entirely,
  • Just 74% of family businesses are confident they can remain family-owned in 10 years’ time (down from 91% in the next 3 years) with increasing concerns that the burden of IHT will force businesses to sell up or sell assets – often to foreign-owned corporations – creating further instability for the domestic economy.

But FBUK’s research also shows the positive impact that fully reinstating BPR and APR could have, with almost half (48%) of Britain’s large family businesses saying they would reverse hiring decisions and actively recruit more staff.

Neil Davy continues:

“Recent, sudden policy shifts have forced Britain’s family businesses to pause and recalculate long-terms plans for the future. Some have reduced jobs, other have cut investment and, for the first time, some are asking whether keeping the business in the family is still viable.

“This is a consequence of a choice made by the Government-whether it intended to or not. This policy agenda sets out how it can make a different one. The asks are not complicated, nor are they concessions to a special interest. They are simply the conditions under which a critical part of the British economy will be allowed to thrive.”