A huge majority of business owners are pessimistic about the UK economy in 2026 – with many firms believing they are currently facing tougher times than the 1970s.
Research commissioned by the Jobs Foundation found widespread gloominess among family businesses at the beginning of the year.
A survey of more than 1,000 family businesses and family farms found nearly eight in 10 (78 per cent) were pessimistic about the state of the economy.
Family business owners were also more likely to rate the tax and regulatory environment of the 1970s as better for business than the 2020s.
The research, conducted by Whitestone Insight, revealed ‘a profound disconnect’ between the views of the Labour Government and firms.
Two-thirds (68 per cent) said they didn’t believe Rachel Reeves that economic growth is the number one mission of the Government.
This compared to less than one in five (18 per cent) who said they believed the Chancellor’s oft-stated claim.
Twenty times as many family businesses said they will be harmed rather than benefit from Ms Reeves’ two tax-hiking Budgets.
Two-thirds (68 per cent) said they didn’t believe Rachel Reevesthat economic growth is the number one mission of the Government
Family business owners were more likely to rate the tax and regulatory environment of the 1970s as better for business than the 2020s
More than half (52 per cent) agreed the Government had severed the connection between reward and effort, while fewer than a third (31 per cent) disagreed
More than half (52 per cent) agreed the Government had severed the connection between reward and effort, while fewer than a third (31 per cent) disagreed.
Matthew Elliott, the president of the Jobs Foundation, said the research had found a ‘dire’ mood among family businesses.
‘Eighty per cent feel like the Government doesn’t understand what it is like to run a business,’ he added.
‘And more than three-quarters think successive governments have lacked the ambition to make the UK a really great place to do business.
‘In fact, family businesses are far more likely to think that the 1970s were a better decade for their tax and regulatory environment compared with the 2020s.
‘Without properly incentivising businesses to set up and remain in the UK, the country’s long-term economic prosperity is at risk.’
Andrew Hawkins, CEO of Whitestone Insight, said: ‘Running a family enterprise in Britain has become steadily more difficult.
‘Economic pressures have intensified, margins have tightened, and the political and regulatory environment has grown markedly less hospitable.
‘Family businesses today navigate a landscape shaped by rising employment costs, increasingly complex regulation, and a tax system that often feels more punitive than supportive of long-term investment, savings, and entrepreneurship.
‘Yet such businesses are truly the lifeblood of our economy and sustainers of our communities.
‘This survey shows that most hard working business owners are driven not by the desire to get rich but by the desire to create something which improves other people’s lives and to put food on their family’s table.’
Whitestone Insight surveyed 1150 family businesses and family farmers online between 28 November and 5 December.