Business leaders and the ballot: the impact of sector policy and outlook on voting intentions

Picture of Carl Phillips
Carl Phillips

Director

For many people, especially business owners and senior staff members, the impact a new government will have on their place of work or wider sector is just as much an
influence on how they will vote as education or health policy. It is therefore
a bit peculiar that, despite the proliferation of opinion polls exploring what
voters think, there is very little focus at election time on what business
leaders think about policies that affect different industry sectors and their
impact on how they might vote.

The BVA BDRC Business Opinion Omnibus is a monthly survey of 1,200 business
financial decision-makers from companies with a turnover exceeding £250,000 a
year. We ensure that robust sub-samples are included across four main sectors
(Manufacturing, Construction, Retail, and Services), regions across the UK, and
in terms of business size (by turnover and number of employees). This makes it
the perfect vehicle to explore the opinions of UK businesses regarding the
upcoming election and the state of the economy more widely.

Top concerns for growth

Looking at the big picture to start with – business leaders are united in agreement that the same three issues are the main barriers to growth, both for their business but also for the UK generally, as well as being the priority areas for the next
government to focus on. There should be no surprise here – energy prices,
inflation, and interest rates have dominated the news cycle for years.

Looking ahead, the ongoing impact of Brexit and EU trade, along with tax levels, are also issues that businesses want to address. Given that neither Labour nor the Conservatives have committed to re-opening the Brexit debate I suspect many business leaders across the country are going to be disappointed, even if their tax burden falls (which again seems unlikely from what Labour are saying).

Further down, there are several interlinked employment-based issues – wages, skills, and labour shortages – that, if combined, would feature in the top priorities. Labour has certainly committed time to labour reforms, but whether wages will rise (especially those of government employees) is yet to be seen. And given the link between labour shortages and the divisive issue of immigration, clarity is unlikely anytime soon.

The story here may not surprise anyone – most of us could have guessed that these would be the issues prioritised by business. But what does it mean? On one hand, these issues are familiar to everyone, so the idea of any major surprises in economic or industrial policy is small. On the other hand, all political parties have had to have had a stance on these issues for years now – this perhaps benefits Labour, who have been able to comment from a distance and penalises the Conservatives, who have had to publicly deal with (or not depending on your POV) these problems for a while now.

Key areas for economic improvement

Looking more specifically at critical areas facing UK business to understand opinions in more detail is revealing. Over three-fifths of the business leaders believe that improving the country’s economic health requires increased investment spending, lower tax burdens, an overhauled planning system and increased public spending in areas such as infrastructure. 

While many of those sentiments are in line with public opinion, there is one issue that has fallen off the public’s radar somewhat that is still an active concern for business: Brexit. A majority of businesses believe it is imperative to review and reassess the existing arrangements that govern the UK’s trade with the EU to reduce the strains that have impacted business over the last few years.

Party preferences

Bearing all that in mind, what level of trust do businesses have in each of the political parties to run the economy? Unsurprisingly to anyone who has watched the news or read a newspaper in the last three months, Labour is in front and with an 11% lead over the Conservatives. Given the latter’s long-established reputation (whether the reputation is fair or not can be debated) as the political party most trusted on economic matters, especially among business, this does nail down the scale of the problems the Conservatives are facing in this election. 

That said, despite a track record of ‘broken promises’ and the turmoil triggered by Liz Truss, the Conservatives are still (in some cases, just about) the most trusted party to manage the economy among a handful of industry sectors, namely manufacturing, transport, and financial/business services.  

It will be no surprise that the levels of trust business leaders have in each party to run the economy correlate strongly with voting intention. Comparing our data to YouGov’s Westminster voting intention tracker, which had similar fieldwork dates to our Business Opinion Omnibus, there is a clear alignment. 

At an overall level, the findings are the same – Labour is well ahead of the Conservatives. One key difference though is that far more voting intent among business leaders is more concentrated in the main two parties, 64% compared to 55%, with fewer opting for one of the smaller parties.

Reform UK and the Liberal Democrats attract the vote of about one in ten business leaders, lower than their share of voting intent among the public. There are far fewer polls of voting intent in Scotland and Wales, but among business leaders between one in six and one in five say they would vote for one of the nationalist parties if the election was tomorrow. 

The reasons for Labour’s dominance become clear when you start looking at how the policies of each party are being received. Labour has a clear lead (usually +10pts or more over the Conservatives) among business leaders when it comes to having the best economic policies. And this is on every level – personal, business, sector, regional, and national. 

Interestingly, and cementing the impact that sector policy and outlook has on attitude towards politics, business leaders from the three sectors previously highlighted (manufacturing, transport and financial/business services) think that the Conservatives have the best economic policies – both at the business and sector level as well as the personal and national. It’s worth noting that only two of three (Manufacturing and Financial/Business services) are more likely to vote Conservative than Labour.

From all the available evidence it seems that a Labour government is inevitable, and that will bring changes to the economy of the UK over the next few years that is hard to accurately predict. However, there is a degree of faith in business leaders in what Labour can do. Nearly half of those we spoke to, and far exceeding the proportion who said they would vote Labour, agree that over the next 5 years, Labour can stabilise the economy and the regulatory environment, revitalise the labour market and drive down inflation and interest rates. 

That shows that even some of those who wouldn’t vote Labour have a degree of faith in their competence (and/or the wide geopolitical situation) to stabilize the UK’s economic environment. And that is a good place for any new government to start. 

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