Business leaders in the UK are looking to a new Government to bring stability and positivity to the role that companies play in growing the economy and creating jobs and wealth
Business leaders in the UK are looking to a new Government to bring stability and positivity to the role that companies play in growing the economy and creating jobs and wealth.
In a survey of 600 UK companies, together employing more than one million people and with a combined turnover in excess of £200 billion, respondents say that they expect a Conservative-led coalition to win (43% compared to 26% for a Labour-led coalition).
The business leaders are worried about instability and uncertainty, and fear Government intervention in different sectors of the economy. They are much more optimistic about the prospects of growth (both in turnover and jobs) under a Conservative regime than under Labour.
But uncertainty over the EU counts against the Conservatives, as those surveyed would prefer to avoid a referendum.
Simon Collins, UK Chairman of KPMG, says: “Our survey finds that businesses expect, and would prefer, a Conservative-led Government. But managers are worried about uncertainty and the potential for intervention and even demonisation from politicians.
“What they are calling for are balanced measures focused on careful management of the deficit, fair and stable taxation, and an immigration policy that allows companies to retain UK university educated skilled migrants.
“What they do not want is uncertainty; 64% say any delay in forming a new Government would harm their business, 57% that the prospect of an EU referendum is harming their industry and 74% agree that talk of state intervention in some industries is undermining business confidence. This cannot be good news for the economy."
Based on a Conservative win, the survey finds that business confidence will be double (52%) than with a Labour victory (28%). In addition 61% say the prospects for turnover growth are positive compared to 38% for a Labour victory. In addition, 24% expect corporate tax to be more positive under the Conservatives (14% for Labour) but only 21% agree that the numbers of skilled individuals will improve (19% for Labour).
Business is strongly supportive of responsible immigration; 76% of those surveyed say it is important to retain skilled migrants who have been educated in the UK.
One of the most concerning issues uncovered by the research was the prospect for exports, however, where 43% of respondents said they did not currently export and were not planning to.
Mr Collins adds: “The UK's strength on the world stage relies in no small part on our companies being able to export. This figure is therefore particularly alarming. Companies need encouragement, support and certainty at home to enable them to make this important step. This has to be a top priority for business leaders, and for the next Government.”
Lucinda Kemeny, FTI Consulting
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Notes to Editors:
About the survey
This research was conducted by FTI Consulting online from 24th to 27th April 2015 of 598 senior managers where 340 were from SME (10-249 employees) and the remaining 258 were from large companies (over 250 employees). Respondents were from a mix of private (74%) or publicly listed company (26%). All of the organisation were based in the UK (35% in London).
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.