The Government needs to support family firms to successfully transition to the next generation - Thomas Martin

The UK’s family business sector is a true British success story and an integral part of the economy here in Yorkshire. As a sector, family firms really are the engine room of the Yorkshire economy with around 400,000 family firms providing around one million jobs.

At the heart of this success story is a focus on the long-term, planning from one generation to the next, making decisions that serve the business, its employees, and their communities across Yorkshire.

My own family firm, Arco, a fifth-generation, family-run business with over 135 years of experience, bucks the trend despite the challenges across the UK.

Hide Ad
Hide Ad

The current uncertain environment for family businesses is holding the entire sector back in helping to create multi-generational businesses that can grow from their Yorkshire roots into global companies promoting the region across the world.

Prime Minister Rishi Sunak during a meeting of the Cabinet. PIC: Kin Cheung/PA WirePrime Minister Rishi Sunak during a meeting of the Cabinet. PIC: Kin Cheung/PA Wire
Prime Minister Rishi Sunak during a meeting of the Cabinet. PIC: Kin Cheung/PA Wire

Family businesses are still constrained by UK policy makers' lack of appreciation or understanding of the sector’s value, potential or needs.

Currently, we are home to the world’s highest ratio of family businesses that hold one generation of wealth, 44 per cent. This must be addressed if the Government wants to boost our economy, encourage the next generation of entrepreneurialism and create more long-term jobs in Yorkshire.

Yorkshire is the prime example of how, as an economy, we are adept at starting more family businesses than anywhere else in the world but lack the framework, policymakers understanding and guidance to help these companies pass down to the next generation.

Hide Ad
Hide Ad

Addressing these issues is something we’ve been working on with our colleagues across the industry, with the new Family Business UK manifesto. It sets out a programme for change which tackles existing issues around succession head on. This makes up the theme for Family Business Week, which is all about shining a spotlight on family business leaders of the future and beginning a conversation around how we can support succession planning throughout areas like Yorkshire.

If we’re going to help first-generation family firms to successfully transition to the next generation, the government must ensure that business support programmes, like Help to Grow, offer guidance and support to those wanting to pass their business on to the next generation. Currently, support for entrepreneurs is focused on setting yourself up for sale, not long-term family ownership.

Similarly, we need to put in place the correct policy frameworks that facilitate the unique long-term investment timelines for family firms that enable our smaller and medium-sized members to grow from one generational regional player to a fifth-generation household name competing on the international stage, like Arco.

The demand is there with the majority of our medium-sized family business members looking to increase their investments over the next five years – vital to the growth of the Yorkshire economy - but don’t believe there is enough to help support businesses with long-term investment planning.

Hide Ad
Hide Ad

And family firms will only have the confidence to invest for the long term if they have certainty over the tax regime in relation to transitioning to the next generation.

Thomas Martin is chairman of Arco and chairman of the Hull and East Yorkshire Business Engagement Board.