Can politicians make a difference for family businesses? Some think so

Politicians and family businesses don’t often see eye to eye. Most family businesses see politicians as promoting policies that don’t best serve their interest and politicians often believe family businesses aren’t paying enough taxes.

In the extreme, family businesses can be destroyed by the tax and nationalisation policies of interventionist governments. Just ask David de Rothschild, chairman of Rothschild Bank in London, and Ernest-Antoine Seillière, the former head of the French investment group Wendel, what they think of politicians when it comes their family businesses. Both saw their businesses in France wiped out by nationalizing governments. Of course, both men went on to rebuild businesses in France, but when it comes to politicians both are sceptical at best. And many others in the sector share their scepticism.

But a group of European parliament politicians reckon they can make a positive difference to family businesses and are speaking up for them at a European-wide level. Most noticeably is the a European parliamentary group led by the German politician Angelika Niebler. Niebler says there needs to be more recognition of the importance of family businesses among European Union members, and she’s appears to be pushing family businesses up the political agenda in Brussels.

Among her views on the sector is that mid-sized family businesses, typically those employing between 500 and 1,000 employees, are hampered by existing legislation.  “Unlike small and medium-sized enterprises, these mid-cap family companies don’t benefit from exemptions or specific funding,” she told the Parliament magazine. “As a result, many family businesses desperately try to remain below the threshold set by the commission’s criteria for SMEs, with predictable consequences – they stop recruiting, so as to prevent an increase in income or turnover, automatically putting a halt to further growth.”

A detailed report has been produced by European parliament on the importance of family businesses, the challenges they face and what should be done to improve their operation conditions. Niebler says the work is raising awareness of the importance of the family business sector to the European economy, but more needs to be done to improve policy responses to them.

“We urgently need more data, facts and figures in order to better understand the issues and challenges family businesses face and to promote the exchange of best practice,” she says. “The key point is to draw policymakers’ attention to this important group of entrepreneurs and to provide assistance where it is needed.”