With all new governments, particularly a change of political party there are winners and losers. Truth be told our personal thoughts on a new budget are always dependent upon how well or not so well off we will be. It is, after all, only natural.
Experience tells me that it is always good practice to take stock and reflect on a budget and come to a sensible conclusion after a few days of thought.
So having done just that and having listened to many people’s views my conclusion is very simple.
Chancellor, you have a very demanding job, and it has great responsibility. So much so most people wouldn’t want it, and, in that regard, you have my admiration for stepping up to sort what you and your party have suggested is a forty-million-pound black hole.
I also understand the need to shaw up the nations finances and to get to grips with our ailing health service and public sector, after all it would seem they can’t do things without an increased budget right?
However, it seems to me you have not the slightest understanding of how small business and specifically family businesses work.
We do not operate the way large corporations work, nor do we operate in the way public sector organisations do.
A family business starts on a kitchen table, parents looking to put food in the mouths of their children and to hopefully be able to fill the fridge on a weekly basis. The business is all consuming on a 24/7 three hundred- and sixty-five-day basis. Holidays are a pipe dream; expense accounts don’t exist. If there is any money left over, its reinvested into the business and perhaps with luck it might just buy the kids some new shoes. Or support a local charity, even though we could do with charitable help ourselves.
When we employ staff, it is they who get paid first, have their pension contributions topped up, paid holiday entitlement given, NI contributions settled regularly, and expenses covered. Only after everything else is taken care of does the family pay themselves, which on many occasions means they pay themselves nothing as the finances simply don’t cover it.
If we are lucky our businesses flourish (I am sure you know the start-ups failure rates etc) and we take on more staff and become, in our terms, successful. This means we can sleep at night, having made the right decisions for our people, our family and of course our clients.
We try hard to take on apprentices to help them grow (not, as many believe, cheap labour). Frankly an apprentice in the early days understands little about the world let alone the business world. We help to train them, develop them and then in many cases they move onto pastures new, for someone else to benefit.
But we do so knowing we are doing the right thing.
Chancellor I am sure you are aware that the last set of published figures in 2022 showed that family businesses (excluding sole traders and partnerships) attribute something in the region of 30% to your tax take on a yearly basis.
We are the lifeblood of this country and always have been.
All of us work for a brighter future for our families and expanded business families with a combination of strong values and work ethic at the forefront of all we do.
If we are very lucky, we become a multi-generational business passing our hard-earned efforts onto the next generation to continue the good work of those who went before them.
At sixty-eight years of age, I have seen many budgets, politicians and political parties from one extreme to the other. Some have understood business more than others. Most times politicians think that talking to major corporates will teach them what they need to know and completely miss the point.
Corporates are there for shareholders and investors. Family businesses are here to feed our children.
The backbone of this country is in the corner shops, the micro-service companies, the farmers and many others. We understand that family businesses are the true measurement of the prosperity of the country, not the large conglomerates and public sector, because without us there will be nothing.
Since Covid our businesses have been on a knife edge, finances stretched, relationships strained and so many businesses are simply very tired. Right now, we need a Chancellor that can see a positive way forward that doesn’t penalise us and find ways to positively impact our marketplace.
I hope he is wrong.
I hope that it is simply a lack of knowledge Chancellor.
I hope you will see the real implications in this budget to family businesses.
Not to be able to pass our business on to the next generation without huge penalty implies the end of the business. No one will buy it unless at a hugely undervalued price and so the business will simply stop.
The good will from those entrusted with a family business will disappear.
Apprentices will not be taken on, especially when the new aspirational one rate for everyone (regardless of ability) comes into play – why would you pay the same to unskilled apprentices as to a skilled worker?
Apprentices won’t get the chance to learn how to move forward in the business world, vacancies will disappear, and they will become disillusioned and perhaps even go on the dole...
Our farmers will simply say it is the very last straw and stop, ending centuries of knowledge, experience and ability. Their land to be sold at a fraction of its true worth.
We will all increase our intake of imported food at increased cost.
Chancellor you still have time to do the right thing and talk to us, really listen and realise what your actions will do.
Usually, I am a glass half full person.
I hope you will listen.
I hope you will revise at least some of your actions.
But I fear not…
And I fear for family businesses across the country.
Peter
