Tag: uk gov

Rising employment costs put further pressure on family-run wholesale and retail sector

Posted on by Vanessa Barrett

New labour market figures underline the growing pressure facing the UK’s family-run wholesale and retail sector as businesses contend with rising employment costs.

The latest ONS figures show that the wholesale and retail sector had 76,000 fewer payrolled employees in August than a year earlier – the largest fall in employee numbers of any sector. Across the economy as a whole, the number of payrolled employees fell by 145,000 over the same period.

The figures are particularly significant for family businesses, which form the backbone of the UK’s wholesale and retail sector. More than 510,000 family businesses operate in wholesale and retail – representing 91.3% of all firms in the sector.

Together, these businesses employ 2.73 million people, accounting for more than two-thirds (68.4%) of employment across wholesale and retail. Family firms in the sector also generated £974 billion in turnover in 2023 – more than family businesses in any other part of the economy.

The latest employment figures reflect the pressures the family business sector is facing.

Our latest Family Business Pulse found that 38% of family businesses identify rising employment costs as a significant barrier to hiring, while 29% say Employer National Insurance Contributions are among the tax measures having the greatest immediate impact on their business.

Despite these pressures, family firms remain ambitious. More than half (55%) expect to increase their workforce over the next 12 months, although 79% of those expecting to recruit anticipate only a slight increase in staff numbers.

Fiona Graham, Chief Operating Officer at Family Business UK, said:

“The latest employment figures should concern anyone who wants to see businesses investing, growing and creating jobs across the UK.

“Wholesale and retail is overwhelmingly a family-business sector. More than 500,000 family firms operate within it, employing over 2.7 million people and making a major contribution to communities and local economies across the country.

“Family businesses want to employ more people – our own research shows that 55% expect to grow their workforce over the next year. But rising employment costs are making those ambitions increasingly difficult to realise.

“Ahead of the Budget, Government should focus on creating the conditions that give businesses the confidence to recruit. That means reducing the burden of Employer National Insurance Contributions and carefully managing future increases in the National Minimum and National Living Wage.”

Business groups unite behind FBUK call to reverse BPR changes

Posted on by Vanessa Barrett

Family Business UK has brought together leading business organisations representing more than 200,000 businesses to call on the Chancellor to reverse the changes to Business Property Relief at the Autumn Budget.

In an open letter to the Chancellor, organisations representing businesses across hospitality, retail, construction, agriculture, logistics, manufacturing and the rural economy have united behind our call to restore 100% BPR for qualifying family businesses.

The intervention comes as attention increasingly turns towards the Autumn Budget and the decisions the new Chancellor will take to support investment and growth.

Despite the Government’s decision to increase the 100% relief allowance to £2.5 million per estate, the fundamental problems with the policy remain. Family businesses continue to tell us that the changes are affecting investment, recruitment and long-term succession planning.

Our message to the Chancellor is clear: the Budget provides an opportunity to think again.

A united voice from across British business

The open letter brings together organisations including UKHospitality, the Country Land and Business Association, Build UK, the British Independent Retailers Association, Builders Merchants Federation, Historic Houses, the Holiday and Residential Parks Association, British Home Enhancement Trade Association, Agricultural Industries Confederation, Retail NI, Craft Bakers Association, Trade Association Forum and the Road Haulage Association.

Together, the signatories represent more than 200,000 businesses across the UK.

The breadth of organisations supporting the letter demonstrates that concern over the BPR changes extends far beyond any one sector. Businesses across the economy are warning that the reforms risk diverting money away from investment and jobs, disrupting succession and making long-established British businesses more vulnerable to sale.

As the Autumn Budget approaches, this collective voice strengthens the case we continue to make to Ministers, MPs and officials: family businesses should be encouraged to invest for the long term, not penalised for passing successful businesses from one generation to the next.

Read the open letter to the Chancellor here.

The case for change

The evidence of the economic consequences continues to grow.

Research commissioned by Family Business UK found that the originally proposed reforms could put 208,500 jobs at risk, reduce economic activity by £14.86 billion and result in a £1.87 billion net fiscal loss by the end of the current Parliament.

The case for change has been further strengthened by recent research from Make UK, highlighting the damaging impact the inheritance tax reforms are already having on family-owned manufacturers.

This reflects what we continue to hear directly from FBUK members about decisions being taken now as a consequence of the changes – from investment being delayed or cancelled to recruitment plans being reconsidered and succession strategies being revisited.

Neil Davy, Chief Executive of Family Business UK, said:

“The Chancellor has a choice in his first Budget: make it harder for British family businesses to invest, employ and pass their businesses on to the next generation by sticking with his predecessor’s reforms, or give them the confidence to get on with building the economy.

“The next Budget is an opportunity to reset the relationship between Government and family businesses. Reversing these changes would send a powerful message that Britain wants businesses to stay here, invest here and grow here – not become forced-sale opportunities for overseas buyers.”

Keeping up the pressure ahead of the Budget

Restoring 100% Business Property Relief remains a central priority for Family Business UK and is at the heart of our submission to the Chancellor ahead of the Autumn Budget.

Over the coming weeks, we will continue making that case across Government and Parliament, alongside our members and the wider coalition of business organisations supporting this campaign.

The Government has already demonstrated that it is prepared to reconsider elements of the policy. Our message now is that it should go further.

The Chancellor’s first Budget is an opportunity to provide family businesses with the certainty and confidence they need to invest, employ and grow for generations to come.