UK business preparing for possible Labour government
23 August 2018
Uncertainty becoming the new normal with most business leaders expecting an early General Election
Nearly one in three expect a Labour-led government in the next five years
And two-thirds feel UK business needs to do more to prepare
Companies are stepping up preparations for Jeremy Corbyn to take office, with nearly one in three business leaders thinking a Labour-led government is the most likely outcome at the next General Election.
The research, from London First and BritainThinks, spoke to over 100 chief executives, MDs, CFOs and Board members at companies employing 50 people or more, including a number of in-depth interviews.
Most business leaders are expecting an early election, with 69% thinking it will come before May 2022. A Labour-led government is seen as a distinct possibility, with nearly one in three (31%) thinking it’s the most likely outcome, compared with half (55%) believing the Conservative party will head up the next government – albeit with many (38%) thinking it will be a minority government.
The prospect of a Labour government is second only to Brexit as the greatest challenge keeping business leaders awake at night. Brexit was named by over half (51%) of respondents, compared with 38% naming a Labour government, followed by high levels of taxation (25%) and increasing productivity (24%).
Companies say they are stepping up preparations for Jeremy Corbyn to take office, with three quarters (76%) saying they are doing something. But it tends to be small or informal steps, such as internal discussions, and there’s a long way to go for business to be ready for a change in government, with one in five (22%) admitting to being unfamiliar with Labour’s policies and only one in three (32%) thinking UK business as a whole is prepared for Labour to take charge.
Jasmine Whitbread, chief executive of London First, said: “Business has been focused on contingency planning for Brexit but a future Labour government is being added to the agenda. Labour’s intention to invest in housing and infrastructure is seen as a good thing by many but there’s real concern that the party could scare away much needed private-sector investment. It’s clear that business and the Labour party need to build much stronger links, ensuring a clear understanding of the plan for the UK’s future economic growth.”
Most business leaders are keeping faith with the Conservative Party, and Theresa May, with eight out of ten saying the Prime Minster understands the concerns of British business.
But a notable one in three (32%) said the Labour party best understands the concerns of British business, compared with two thirds (68%) who backed the Conservative party.
There was a strong feeling that the government needs to do more to support UK businesses as Brexit approaches, with eight out of ten (79%) saying government wasn’t doing enough. Nearly two thirds (60%) believe UK businesses will be less profitable after Brexit and over half of respondents (53%) thought UK businesses are struggling at the moment.
In response to the findings, Deborah Mattinson, Founding Partner at BritainThinks, said “Business leaders, like the wider pubic, feel this is a time of great uncertainty — and one where it is increasingly hard to plan for the future. Although these leaders still support the Conservatives over Labour, they are disappointed in their support for Business and their response to the key issues of the day — especially Brexit.
“With this, and the public mood in mind, most believe that planning for the possibility of a Labour government needs to be a top priority in the coming months.”
The data from BritainThinks’ research is available here
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