New report shows importance of large family businesses to UK economy
New research by the IFB Research Foundation sheds fresh insights into UK family business. Compiled by RepGraph, the new report The Largest Family Businesses in the UK analyses the largest UK family-owned firms.
The analysis found that 1 in 5 of the largest businesses in the UK are family owned. Of the 1,551 largest companies in the UK, 19.8% are family-owned and most of those (11.7% of the total) are owned by UK families.
This report builds on existing knowledge of the central contribution family firms make to the UK economy. Existing research, conducted by Oxford Economics, shows that family firms in the UK employ more than 13 million people, generate a quarter of GDP, and pay more than £180bn annually in tax.
Whilst the majority of family firms in the UK are small and medium-sized businesses, this report demonstrates that large family businesses play an important role in the UK economy, which highlights the importance to support and grow this sector of our business community in these uncertain times.
The report also shows that family businesses prevalence amongst the largest businesses has been stable over the second half of the past decade. Around three-quarters of the large family firms identified by the researchers in 2016 were still operating family businesses with a turnover of more than £500m in 2020. This points towards the resilience of family owned firms, with many businesses growing and thriving over generations and centuries.
Elizabeth Bagger, director general of the Institute for Family Business, welcomed the new report: “People often assume that when we talk about family firms that exclusively refers to small businesses. This research is important in demonstrating the diversity in terms of business size, geographic location and sector of the UK family business community. It’s no surprise either that many of the family firms in the largest group are hundreds of years old. They have successfully built a culture of entrepreneurship amongst their family and have continued to grow their business sustainably.
“Coronavirus has had a significant impact on all parts of our economy, including on family firms. Although we don’t yet know the scale of that, I am hopeful that the findings in this report about the resilience of family firms before the crisis hit will mean that those businesses are in a strong position to be able to see through the current challenges and be part of the rebuilding of our economy as we look to our long-term recovery.”
Sir Michael Bibby, chairman of Bibby Line Group and of the IFB Research Foundation, commented on the new report: “It is fantastic that we have been able to complete this important analysis of UK family businesses with a turnover of more than £500m during the lockdown. For the first time we have reviewed the holding and subsidiary company split and thus identified nearly 1000 separate family groups who contribute so much to the way of life in this country.”
Sir Michael continued: “The data shows the number of large family businesses that employ many people and pay significant taxes to support our economy. In this time of great change and uncertainty, they also provide a bedrock of resilience. Their long-term outlook has sustained them often through many generations, covering previous wars, feasts and famine.
“My own family business, Bibby Line Group, first supported the country carrying mail to Ireland in the early 1800s and took troops to and from the Boer War. Today our businesses, such as Costcutter, have provided pop up stores in hospitals so key workers can easily get supplies. Garic, together with Bibby Distribution, are trialling the first Covid drive-through testing centres. Bibby Financial Services is distributing CBILS loans and Bibby Marine is providing accommodation barges to the Singapore government to house migrant workers who would otherwise have been at risk of catching the pandemic in overcrowded dormitories.
Like many other family businesses during the Covid pandemic we have tried to make decisions quickly, be agile and change our business activity to meet new demands.”
You can access the full report here.
