If the private sector is the backbone of the British economy, then family businesses are what make it strong.
These “Mom & Pop” businesses, as they are known in America, are quietly going about their business generating revenues of £1.1trn a year that’s ?81.7bn in tax receipts for the Treasury.
Family businesses can range from kitchen table or man-in-a-van operations to large-scale enterprises generating considerable income and creating substantial employment opportunities. And there is a common denominator that binds them all. Quite simply, they will fight tooth and nail to keep their businesses going.
Back in the recession of the ’90s, I came close to losing my business. But in my mind that was never going to happen. I fought my way back, building the business into what it is today providing employment for a couple of hundred people including my wife, kids and some of my wider family. Compare that ethos to that of multi-million pound City executives that are flown into PLCs before making an absolute dog’s dinner of things and driving the company, and, in the case of the bankers, the economy, into the mire. Do they loose their homes or end up on the breadline No, of course not. They go to ground for a few months before reappearing like a bad penny as the head of another City firm.
It’s this carousel attitude in the big firms that putting the economy at risk, not the blood, sweat and tears of family businesses. More needs to be done to back existing family businesses and encourage the creation of new ones. This could be the scrapping of the 50p tax rate for the higher-earning family business owners, but it could also be a change to the tax system to create more investment.
The Enterprise Investment Scheme restricts family members investing in new family businesses. They would receive only half of the return on that investment compared to a non-family run startup that qualified for the relief. It seems crazy that a collection of businesses that have such a positive impact on the economy won’t be able to grow as they should because of these types of restrictions.
We should be supporting and thanking the “Moms & Pops” out there. Their commitment to their families and their businesses could just be the saviour the economy is looking for.
Charlie Mullins launched Pimlico Plumbers in 1979 with just a bag of tools and an old van bought at auction. The company now has more than 133 professional plumbers, 35 support staff and a £15m turnover.