John Longworth, chairman of the Independent Business Network, says Labour’s “anti-growth” policies threaten family firms. Mr Burnham has not committed the UK to rejoining the EU.
Britain faces “economic disaster” and the demise of family businesses if Labour keeps pursuing “anti-growth” policies, the chairman of the Independent Business Network (IBN) has warned. John Longworth made the claim in a Budget submission to the Treasury. He said rejoining the European Union, a long-term possibility floated by Prime Minister Andy Burnham, would be “insanity”. The IBN, which champions family-owned businesses, urges a radical change of course.
What the IBN says
Mr Longworth wrote: “There appears to be a blind attachment in the corridors of power to tax and spend, and to ideological policies such as net zero, the direct attack on property ownership and inheritance, and welfare profligacy. A continuation of this approach risks economic disaster and the demise of family businesses.”
He continued: “Rather than address the real issues of government policy and the economy, the Prime Minister has chosen instead to pursue rejoining the European Union, raising false hope that this would solve Britain’s problems. It would introduce years of uncertainty and conflict. Quite apart from the enormous cost of such a policy, tying the UK to a failing economic model would be most unlikely to boost our fortunes.”
He added: “It is such insanity that the only rational explanation is that it is a ‘weapon of distraction’, designed to divert attention from the absence of both leadership and economic growth that besets our government.”
The IBN calls for a reversal of the rise in employers’ National Insurance introduced by then-Chancellor Rachel Reeves, and for zero-hours contracts to be kept. Its submission says: “For family businesses, flexible hiring can create an entry point into employment. A restaurant owner who needs help on busy weekends may be willing to train an inexperienced local applicant for a small number of shifts. If trade grows, that person may gain more hours and eventually move into a regular role.”
Alongside VAT reforms, it wants loans for young entrepreneurs. “Britain should give young people a fair chance to turn skill and initiative into a business, whether or not their families can write the first cheque,” it says.
Chief executive Brendan Chilton said: “We believe that family-owned and family-run businesses must have a greater voice in public policy and can thrive outside the EU. One of the primary reasons for leaving the European Union was to ensure that we had the ability to create the most dynamic and competitive environment for businesses and start-ups. We also left the European Union so that we could embark on our own trade deals, securing advantages for British businesses, access to new markets and flexibility to help with the cost of living. We must not reverse that decision, and the Independent Business Network will fight for our sovereignty and for maintaining our independence outside the EU.”
What Mr Burnham has said
The research notes say that on 30 September, Mr Burnham set out four broad options: keeping current arrangements, joining a customs union, rejoining the single market or seeking full membership. He said the Government would examine the pros and cons of each. In an ITV interview, he said a referendum was not imminent and that the question should form part of a ten-year national plan. French President Emmanuel Macron welcomed the prospect of a return but warned against selective membership. The Guardian reports that Mr Burnham is expected to outline more options around the UK-EU summit in November.
The Office for Budget Responsibility continues to estimate that Brexit will leave productivity 4% lower in the long run, and that imports and exports will each be about 15% lower, as modelled counterfactuals. Parliament’s Business and Trade Committee estimated in June that post-Brexit trade deals could add around £15bn a year to GDP, though that is an expected gain and not one already realised.
The figures behind the warning
According to the notes, which draw on ONS data analysed by the Institute of Chartered Accountants in England and Wales (ICAEW), the UK recorded 285,245 business closures in 2025 and 313,715 new businesses, a net rise of 28,470. Agriculture, forestry and fishing lost a net 3,090 businesses, while accommodation and food services gained 4,270 and construction 3,000. Separate government figures given to Parliament on 16 June show closures falling from 312,940 in 2023-24 to 285,075 in 2025-26. The Government said the data do not identify business size, so they cannot show how family firms have fared.
The employer National Insurance rate rose from 13.8% to 15% in April 2025, with the threshold cut from £9,100 to £5,000. For one employee on £30,000, the gross annual bill rises from £2,884.20 to £3,750, a difference of £865.80, or £8,658 for ten such staff. The Employment Allowance, now worth up to £10,500 a year, can offset some or all of that for smaller employers.
Family Business UK estimates there are 5.1 million family businesses employing 15.8 million people and contributing £985bn in gross value added. New research in September estimated 408,000 workplaces with five or more staff are family-owned and managed, about 93% of them employing fewer than 50 people. That does not show they face imminent closure.
Other indicators are mixed. The ICAEW’s business confidence index rose from -14.6 to -0.5 in the third quarter, though it stayed negative for a seventh straight quarter. The ONS says the economy grew 0.7% in the three months to August, the eighth consecutive period of growth, while construction output fell 1%.
