UK businesses expect a hung parliament

Ben Gartside
·Reporter
Updated
Britain's Prime Minister Boris Johnson visits Metropolitan Police training college in Hendon, London, Britain October 31, 2019. Aaron Chown/Pool via REUTERS
Boris Johnson's Conservative party remains a favourite with businesses. Photo: Aaron Chown/Reuters

The UK business community expects a hung parliament after the general election on 12 December, according to a latest poll.

About 5,000 business owners of UK based limited companies said in a survey they do not expect any party to get a clear majority.

However, the Conservative party emerges as the most favoured by business, according to the poll by MarketInvoice.

Two-thirds of those surveyed though said they believe the elections would result in a hung parliament.

Britain’s three main national political parties – Conservative, Labour and Liberal Democrats – polled 25%, 22% and 19% support respectively. The Brexit party was supported by 12%.

The three key issues influencing business owners’ intentions to vote are economic stability, what can be done to promote investment and a strong climate for businesses.

But despite hung parliament expectations, 68% of businesses are confident that Brexit will be done by 31 January 2020, with only 23% fearing more uncertainty over leaving the EU or no party gaining a majority in the House of Commons.

They are, however, less optimistic for business prospects in 2020, with 50% expecting a decrease in revenue over the first six months, and 46% expecting a slower start to the new year.

The majority (53%) of businesses also anticipate finance options such as overdrafts, business loans and credit cards becoming more scarce in 2020 and credit terms tightening.

Business rates and corporation taxes are two factors that could most improve business climate, according to the survey.

In terms of global reputation, 56% business owners believe that the UK’s reputation as a good place to do business is being damaged by political instability, although 67% said they would still set up in the UK if they were to restart their business today.

Commenting on the findings, MarketInvoice’s external relations director Bilal Mahmood said: “Business owners are as spilt as the general public over the outcome of the forthcoming general election. It’s safe to say the largest party will be Labour or the Conservatives but it’s clear that neither will win an overall majority.

“Immediately, two things that businesses need to consider are longer leads times on sales and potentially waiting longer to get paid. Both will impact their cash flow.”