The economy and cost of living continue to be the main issues facing the UK, with job scarcity, economic insecurity and rising prices all major concerns.
Above median income and University educated members of the public regard the economy as the main issue. Poorer and non-University educated people say it’s the cost of living.
Concerns about international affairs & conflict rose significantly this month, almost certainly as a response to the start of the Trump Presidency and the policies being discussed regarding Ukraine and tariffs.
People are worried about an increase in global conflict, worsening economy, and whether the US can be trusted as an ally.
While the public are very negative about the economy, the UK’s Business Decision Makers are far more positive that the government has policies in place that will improve the economic situation for their business, sector and country overall.
Business Decision Makers share a lot in common with the above median income/University educated, including their support for Labour.
Looking across the issues that the public think are the most important facing the UK, the most startling finding is that (at an overall level) there is very little confidence that the government is able to deal with them. While some people (notable the above median income and the University educated) are more positive, the amount of confidence that things can change is low.
Given the top-of-mind associations for the main political parties and their leaders are overwhelmingly negative, this should not be a surprise.
While our polling puts Labour and Reform in a statistical dead-heat, it was clear on May 1st that Reform had momentum and was able to turn that into local electoral gains.
Significant societal divisions exist – Labour is supported by the wealthier and better educated. Reform by the poorer and less well-educated – the traditional labour heartland (rather than the traditional Tory one). The parallels to US voter patterns are harder and harder to ignore.
Public Pulse monitors UK opinion on the critical topics that affect market conditions and consumer behaviour:
This isn’t just your typical quick poll about consumer confidence. It is rich and robust intelligence on factors that affect every business and individual in the UK.
Reports are sent to subscribers monthly.
Now that we’re tracking the issues facing the country through Public Pulse, it’s only a short step to tracking voting intention.
Public Pulse monitors UK opinion about politics, the economy and the major issues facing the country. We’ll be making the data available to end clients and brands every month.
Our Public Pulse polling, based on those who plan to vote and have voted (or were too young to vote) in the last election, over the last four months has Reform rising from 18% in November to 25% in February, a rise that mirrors Labour’s fall from 30% to 25% over the same time. The other parties have changed little over the past four months, which says a lot about the impact that Kemi Badenoch has had on Tory fortunes since she became leader in November.
There are two axes of analysis that are interesting to look at here. The first is voting intent by gender: among men Reform is in the top spot, having edged ahead of Labour back in January (26% vs 23% in Feb 2024). Among women, the story is very different indeed, Labour, while down from 34% to 28% over the last four months, is still the top choice for women voters and its only in Feb that Reform has begun to be in a position to threaten that.
Of course, Labour can still firmly rely on the university-educated – fully a third of them (34%) are still committed Labour voters. This is in comparison to just 19% of the non-university educated, who are as firmly Reform (32%) as the university-educated are Labour.
A key focus here, as we do a lot of work in the banking, finance and luxury goods sectors is looking at the population split by above/below average (median) personal income (c. £37,000). Support for Labour is falling among those who are above average income, from 39% in Dec to 25% now. And over the last month support for Reform has jumped from 14% to 23%. Those below average income favour Reform (26%) over Labour (21%). The Tories are stuck at the 1/5 mark for both groups, just as they are overall.
These falls in support for Labour will be no surprise to anyone who pays attention to the news or has opened a newspaper in the last six months, but the scale of the unpopularity is quite interesting. We asked the general public to tell us, in two or three words, how they would describe the government and nearly half of the respondents gave us fairly general and non-specific comments (e.g., “I just don’t like them” type answers), 32% said the government was incompetent and/or inefficient and 21% said they were corrupt and/or dishonest. Only 14% (rising to 40% of Labour voters) gave positive feedback on the government, with 9% saying that the government displayed good leadership and trustworthiness. While it is usual for people to grumble about the government, the scale of antipathy, given they had won a landslide election less than a year ago, says a lot about British attitudes towards the government and politics these days.
We asked a similar question about the Labour Party and Sir Keir Starmer – among the public overall the five top response themes for “words to describe the Labour Party” were negative – a litany of concepts like “bad reputation”, “dishonest”, “incompetent” etc.
The Prime Minister himself fared a bit better – while the top three response themes are negative (incompetent, dishonest and bad character traits – in descending order) around one in ten still thought him to be competent and of good character (12% and 8%). Both of those scores more than doubled among Labour voters (25% and 22% respectively) which indicates that he retains his core support.
As ever, it will be interesting to see how these polls play out over the coming months, and we plan to do deep dives into attitudes towards Kemi Badenoch, Sir Ed Davey and Nigel Farage (and their respective parties) over the coming months.
These findings offer a small preview of the Public Pulse report, available monthly from late April. It will also include insights such as top issues facing the UK, confidence in the Government’s ability to deal with them and a comparison between business leaders and the general public.
In the world of insight context is everything. Without context, market research is just data disconnected from reality. Context determines if a KPI is good, bad or indifferent. Context tells us that if consumers are worried about the economy and cost of living then it makes sense that they are spending less. Context explains why certain brand positioning works better than others when looked at alongside what is going on more widely.
The BDRC Group (BVA BDRC and its sister companies Alligator, Perspective, Viewpoint and ESA) collects a wealth of contextual data from a wide range of different sources, many of which are directly tied to the sectors in which we specialise. We know all there is to know about retail and corporate banking. We know how senior financial decision-makers at SMEs think. We know what the UK public thinks about travel, tourism, and transport. We know which hotel brands are viewed most positively. We know how grocery prices vary across channels and retailer brands, including promotional deals. We know about advertising and media content.
We have access to a huge amount of data and can put most problems our clients face into the right context. And now we’re adding to this with Public Pulse.
Public Pulse monitors UK opinion about politics, the economy and the major issues facing the country – and we’ll be making the data available to end clients and brands.
For the last four months, starting November 2024, we have been conducting 250 interviews a week representative by age, gender, region, working status and ethnicity. We are reporting the data monthly (and therefore n=1000) but this approach gives us the ability, to see the weekly fluctuations in the data as the opinions of the British public shift in response to events and media coverage.
We will be releasing plenty of data over the coming weeks and months, but to kickstart things it is always instructive to look at what the British public thinks are the two or three most important issues facing the country right now.
Unsurprisingly, and as we know from other polling, the economy and cost of living are the top issues and are still increasingly at the forefront of people’s minds. More interestingly perhaps is the increase in the frequency of healthcare and immigration & border security over the last two months – the former is up 7 points from November and the latter up 8. This accurately reflects the change in focus of the media over that period, as both the government and journalists have pivoted to focusing on the NHS and immigration policy.
The overall figures, as always, mask some fascinating differences of priority between groups. For example, people with above average (median in this case) personal income (c. £37,000) and those with a university education are far more worried about the economy (52% and 46%) than the public overall (39%). Both groups have the economy as the top issue, while those with below average personal income or without a university education put the cost of living as the top issue. Men are far more bothered about immigration than women (39% vs 30%), while ( depressingly given what it might indicate about household roles) women are far more worried about the cost of living than men are (46% vs 35%).
What this reminds us is that the level of prioritisation given to these issues varies considerably within the British public, even if everyone is in (more or less) agreement that the same five issues are the most important ones facing the country. Now that we know the issues though, does anyone have any faith that the government can do anything useful about them? As might be expected the answer is… a resounding no.
Four-fifths, or greater, of the British general public, are not confident in the ability of the government to deal with any of the important issues facing the country. While we cannot say whether this is because they have no faith in this government specifically, or in the ability of any British government to deal with increasingly global issues, the total lack of any form of faith that our elected officials can deal with these issues makes pretty grim reading.
Some have more confidence than others – mainly those who have above-average (again, median) personal income or university education, but even they are a minority. To take two examples, 20% overall have confidence that the government can deal with the economy. This rises to 29% of those with above average personal income, and 35% of those with a university education. Similarly, 12% overall have confidence that the government can deal with immigration and border control, rising to 29% and 29% of those same two groups. While it’s great to have some optimists around, basic maths indicates that if those two groups are more optimistic then their opposites (the below average personal income and those without a university degree) are <much> more negative.
This must be a depressing thing to face up to as a government, to have the vast majority of people in the country lack any confidence in their ability to deal with the issues affecting everyday life and yet very willing to criticise them about those issues. It certainly indicates that the problem is not a party-political one, but one that affects the very relationship between the government and the people of the UK. Of all the problems Sir Keir Starmer inherited from the previous government, this is the biggest one to solve.
These findings offer a small preview of the Public Pulse report, available monthly from late April. It will also include insights such as perceptions of different political figures and a comparison between business leaders and the general public.
A few weeks ago, I wrote an article about Starmer’s first 100 days in power from the POV of Business Leaders. Overall, it was a positive story, certainly compared to general public opinion. However, I stressed that support within the business community was split. With Retail and Services being more pro-Labour than Manufacturing and Construction and with the Budget on the horizon, the Retail sector was nervous about tax increases.
Now that Business leaders have had time to review the budget, monitor the associated media circus and assess the impact it will have on them, has anything changed?
The key finding is that Business leaders are badly split on whether the Budget will have a positive or negative impact on… well pretty much everything. At the overall level (give-or-take 4 percentage points each way) a third of Business leaders think the budget will have a negative impact on them, their business, their sector, their region and the UK overall. Around a third disagree and say the budget will have a positive impact, and another third(ish) are neutral.
Comparing opinions to a similar question asked as part of the 100 Days of Starmer piece back in September (note: not identical wording – the comparison should be regarded as indicative at best) shows that the direction of travel is negative. The sense that government economic policy and the Budget will have a negative impact has increased, while the sense that it might have a positive impact is down.
Furthermore, the differences in opinion by sector are stark. Taking just two of the metrics measured, the impact on the business you work for and on the UK as a whole, shows that business leaders from the manufacturing and construction sectors are far more negative about the impact of the Budget than business leaders from Retail or Services. The former two sectors are net negative in their perception of impact, while the latter two sectors are, like the overall findings, fairly evenly split between negative, neutral and positive.
Looking back at September, our data shows that when it comes to impact on the business they work for, manufacturing and construction have become more negative (35% to 53% and 25% to 43% respectively) while Retail and Services are notably less positive (48% to 36% and 43% to 33% respectively) – with the same pattern being repeated in terms of impact on the UK as a whole. It certainly looks like all four sectors, and business leaders overall, have moved en masse to more negative viewpoint regarding Labour economic policy, and while Labour can still (just about) say that Retail and Services are net neutral in sentiment, they have also certainly lost the argument (for now at least) among Construction and Manufacturing.
We can assess the scale of this shift by looking at voting intent, comparing data taken straight after the Budget and comparing against data collected just before the election in June. Back then the voting intent of business leaders was broadly comparable (vs YouGov polling data) to the general public, although support for Reform was notably lower among business leaders than the public overall.
Now, using Opinium’s polling data for our comparison against the general public (their fieldwork dates lined up to ours – see 13/11/24), shows that business leader voting intent is strikingly similar to the general public’s overall, with only a few percent separating them. Notably this means that support for Reform among business leaders, formerly at 11% in June, is now at 19% and very similar to the 21% they are polling nationally.
Looking at the change in voting intent in detail and looking across the key sectors represented in the BVA BDRC Business Omnibus, is very revealing. Support for Labour has fallen at more or less the same level (a range of -7 to -11 percentage points) across all four sectors. Support for the Conservatives is mostly flat… except among Retail, who had been very Labour back in June, where support rose a startling +16 points.
Reform on the other hand have seen an increase in support from all sectors, but their overall success over the last five months is down to the +12 and +20 increase in voting intent from the Manufacturing and Construction sectors respectively.
While we cannot say with certainty that business leaders who supported Labour in June are now supporting Reform, the changes we can see are for Labour and Reform only – support for the Conservatives is flat (except for Retail).
The first is that, while business leaders are clearly not that supportive of current government economic policy or the Budget, the wider picture is actually fairly positive.As Lloyds Banking Group reported (using data from BVA BDRC) – the overall confidence in the economy metric did fall by 3 points in November, and for the third month running. But it’s still above the survey’s long-term average, which means that the UK is ultimately in a positive position from a longer-term perspective. The results also suggest that while firms have mixed views about the economy, they think their businesses are in a good place to cope with any challenges they might face.
This view is backed up when we ask business leaders about their economic prospects for 2025… and they’re overwhelmingly positive. Of course, it’s in the nature of business leaders to be optimistic about the prospects of their own business, but you’d think that, if they were truly worried about the economy under Labour’s management, they might moderate their ambitions slightly – and not even manufacturing and construction have done so.
So overall, we can have broad confidence in the economy for now.
The second is that voting intent among business leaders seems to be far more in line with the general public than it was, for better or for worse. The Labour Party, with one eye on its economic policies going forward, are going to have to accept the fact that, while they still ahead in the polls overall and their support in Retail and Services is mostly intact, they have haemorrhaged support over the last few months, and that the big winners over that period are Reform.
Labour needs to take care not to lose more of the Retail sector to the Conservatives, and to try and understand the appeal, among the Construction sector in particular, for the economic arguments (or just the appeal) of Reform. While also hoping that Kemi Badenoch, who became leader of her party the week before this survey fielded, does not energise much support (or that it takes support from Reform).
That all said, we are still less than six months into Labour’s first year in office. There is a long way to go yet.
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The Autumn Budget has brought renewed focus on how the UK balances its economic recovery with ambitious sustainability targets. With rising living costs affecting many households, the government faces the challenging task of supporting people financially while also making progress toward a greener future.
So, how did some of the budget’s transport measures hold up at addressing these dual concerns?
We wanted to look further into what UK adults are thinking and surveyed a nationally representative sample of 1755 UK adults to gauge their reaction to the transport-related measures from the Autumn budget.
One of the most notable decisions in the budget was the freeze on fuel duty until 2026. This move, which extends the existing 5p cut and cancels a planned inflation-linked rise, was widely supported by 3 in 4 UK adults. With the cost of living still affecting many, stabilising fuel prices offers immediate relief to households facing stretched budgets.
However, this measure raises critical questions about sustainability. By keeping fuel prices low, there’s a risk that it may encourage continued reliance on petrol and diesel vehicles rather than incentivising a shift to greener alternatives. At a time when the government is trying to promote cleaner transport and reduce carbon emissions, some argue that freezing fuel duty sends a mixed message.
One of the more contentious changes was the increase in the single bus fare cap from £2 to £3. This hike was met with frustration, as many see public transport as the backbone of sustainable urban mobility. Respondents pointed out that raising bus fares discourages people from using greener travel options, especially in the context of a cost-of-living crisis.
“If the government wants people to use their cars less, they should keep the fares low”
While this move may generate short-term revenue, it risks undermining efforts to reduce car usage and emissions. Affordable and accessible public transport is essential for achieving sustainability goals, particularly for those who rely on it as their primary means of transport.
“The rise of the bus fares from £2 to £3 is unfair because many travel by public transport 24/7 to get to work and back, and the cost of living is hitting many people hard”
The budget also committed funds to infrastructure projects like the HS2 tunnelling work and the TransPennine rail upgrade. These initiatives, while costly, are aimed at improving long-term transport sustainability by expanding rail networks and reducing road congestion.
Support for these projects was stronger in regions set to benefit directly, such as the West Midlands and London.
One of the few budget measures that drew support was the increased rates applied to flying, as Air Passenger Duty has fallen behind inflation, and private jets have been undertaxed. Although some felt the increase on regular air passengers was too high, the increase in tax on private jets was generally welcomed. This measure makes a positive step and is relatively minor in the views of UK adults.
The latest budget highlights the challenge of balancing immediate economic relief with long-term sustainability goals. On one hand, measures like the fuel duty freeze and road maintenance funding provide much-needed support during a cost-of-living crisis. On the other, some policies appear to conflict with the government’s climate commitments, especially when it comes to encouraging greener transport options. While investment into charging infrastructure is promised to local authorities, some respondents were disappointed in the lack of support for purchasing electric vehicles.
The bottom line: To strike the right balance, the government must take a more holistic approach that addresses both the financial needs of households and the urgent need for sustainable transport solutions.
As the UK faces the twin challenges of economic pressure and climate change, finding this balance will be key to ensuring that policies are both financially fair and environmentally forward-looking.
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The “first 100 days” trope is an interesting one in government. It was born out of the startling activity Franklin D. Roosevelt managed to achieve after he became President of the USA in 1933. In the midst of the Great Depression FDR managed to pass 15 major bills and 76 new laws in an attempt to revive the economy – a remarkable level of activity. Ever since, a president’s first 100 days in office has become an important yardstick for measuring performance and proactivity, and, as ever, where US political trends lead the UK tends to follow.
That said, many say this is a poor measure of success. For instance, the historian David Greenberg, in an article that came out around the time of Obama’s first 100 days in power, asserts that far too much attention is placed on a president’s (or any political leader’s) early days – saying that nothing can prepare someone for the demands and rigours of the highest office, so making too many judgements on early performance is potentially misleading.
Unfortunately, such judgments are always going to be made. As an article in the Harvard Business Review points out; “it’s not that a new President’s hundred days will either doom him to failure or guarantee his success. It’s that transitions are times when momentum builds or it doesn’t, when opinion about the new leader begin to crystallize. It’s a time when feedback loops – virtuous cycles or vicious ones – get established.”
With all that in mind, and with October 11th marking the 100th day since Sir Keir Starmer became Prime Minister and ended 14 years of Conservative power, now would be a good time to see what the UK business community thinks of the government’s performance so far.
Using our Business Opinion Omnibus, a monthly survey of 1200 financial decision-makers in a nationally representative sample of UK businesses, we can assess the views of business leaders about the government’s economic priorities and the level of leadership shown so far.
To set the scene– the priority issues that British businesses want the government to address are broadly the same as they were back in June, with energy prices still top of mind. Inflation and interest rates are still mentioned by a third of business leaders, but both are down 3 points since June. The manufacturing sector is the main champion of inflation being an issue with 38% saying it should be a priority for the government.
One interesting shift in the priority list is on tax levels; 30% think it should be one of the top priorities in September, up by 5 percentage points since June. With Chancellor Rachel Reeves publishing the Budget at the end of this month, and her previous comment “I think we will have to increase taxes in the Budget”, it’s safe to think that this issue will be top of mind for the rest of the year. It’s smaller businesses who think tax levels are a priority issue – 36% of those with 1-9 employees and 33% of those with 10-49.
In light of this, business leaders are still net positive about the impact Labour’s economic policies will have. While they are close to being split on whether the government’s policies will benefit them personally, over two-fifths agree that Labour’s policies will benefit their businesses, their sector and the region of the UK they live in. Beyond that, nearly half agree that Labour’s policies will benefit the UK as a whole.
Policies are one thing – good ideas alone don’t change the world – but do business leaders have faith that Labour has the leadership and the ability? Again, yes. Over two-fifths of business leaders in the UK agree that Labour has the ideas, the leadership and the ability to improve the economy. The manufacturing sector, who were the sector most likely to vote Conservative when we asked them back in June, are far more negative about Labour on all of these metrics.
Manufacturing aside, so far so good for Sir Keir Starmer and the Labour Party. But what do business leaders think about the Prime Minister and the Chancellor at an individual level? Taking the Prime Minister first – nearly two-fifths (37%) of business leaders are satisfied with the way he is doing the job, but on the other hand, a similar proportion (36%) are dissatisfied. Around a quarter have no strong opinion, so there are plenty of people whose opinion could change things either way depending on how Sir Keir Starmer plays the next few months (and years). The picture for Rachel Reeves as Chancellor is more or less the same with 35% satisfied and 34% dissatisfied.
It is worth noting (again) that dissatisfaction with both Starmer and Reeves is highest among business leaders from manufacturing (44% and 46%) and construction (51% and 44%). The retail sector on the other hand is very satisfied with both – 47% for Starmer and 43% for Reeves.
This is one place where we can compare and contrast against public opinion. To take data from another polling agency, in this case, Ipsos, we can see that in data released on 23rd Sept, public opinion was far more negative about both the Prime Minister and Chancellor – no doubt driven by the deluge of negative media coverage that has emerged over the last few weeks. For Starmer, Ipsos report that over half(54%) are dissatisfied compared to 33% satisfied, with the stats for Rachel Reeves similar (46% dissatisfied vs 24% satisfied). For now, at least, it appears that Business leaders are more willing to wait and see what progress the new government can make on the issues that are important to them and have not been swayed by recent negative media coverage.
Looking ahead to the end of the month we can expect a new budget, and tax rises have all but confirmed. The form these take, and the arguments made in their favour, will likely shape the next few months of the Labour government, so we thought it might be a good idea to explore the attitudes business leaders have to tax rises.
Perhaps unexpectedly, it’s evident that business leaders are capable of the same level of cognitive dissonance on complex issues like tax as the wider general public. At the highest level, there is clear support for Labour to act to reduce public borrowing (63% agree). Furthermore, the same majority (63%) agree that Labour was right to specifically promise to not raise income tax, National Insurance, VAT or Corporation tax. Notably, there is cross-sector agreement here. But the picture then becomes a bit confused.
While around half (53%) of business leaders agree that cuts to public sector spending should be prioritised over tax rises, a large minority (43%) think the opposite – that tax rises should be prioritised ahead of cuts to public spending and a similar number (45%) think that it is right to impose tax increases to improve public services.
Looking at differences of opinion across the sectors is fascinating. Retail, the most pro-Labour of the sectors so far, is far more likely to agree that cuts to public spending should happen before tax rises (61% vs 53% overall). Manufacturing (unsurprising given their stance on other issues) is the most likely to disagree (34% vs 26% overall) that tax rises should be prioritised over cuts to public spending, and to disagree (33% vs 23% overall) that it is right to impose some tax increases on business to improve public services.
What is true though, whether business leaders think business should be taxed to fund public services or not, is that a clear majority say they are worried about potential tax rises affecting the organisation they work for, and them personally. If the expected tax rises in the coming budget are regarded as excessive or badly implemented, then the remaining goodwill towards the government that exists among business leaders may well evaporate. This is especially a risk for Labour support among the retail sector – a group generally in support of Labour but strongly against tax increases.
Well, far better than among the general public for a start, which is nothing to be dismissed. Less flippantly, it is clear that business leaders have welcomed a degree of political stability and many still have some level of optimism about what the new government plans to do, and faith that Labour has the ability and drive to get it done. I would judge that business leaders are still waiting to see what the new government can do, resisting the swift change of opinion seen among the public. If so, and if Labour can deliver tax rises and other economic reforms (for example the Workers’ Rights Bill is seen as controversial by many) without angering the majority, while also stabilising the economy and addressing inflation and energy prices then it will be well placed to build momentum and a solid standing for the next few years. Especially as it’s likely that Starmer is getting the unpopular stuff out of the way ASAP to focus on the good stuff closer to the next election.
Starmer may not have changed the country in his first 100 days, but he has certainly not undermined his leadership or reputation among business leaders. But the first 100 days are merely the first 100 days – there is plenty of time to go yet.
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Following the much-anticipated King’s Speech in July, we were keen to know if any of the promises were cutting through and moving the confidence dial of UK businesses. Our Business Opinion Omnibus programme, which surveys 1,200 financial decision-makers in a nationally representative sample of UK businesses, was the ideal way to check the pulse of the business community.
So, what are the issues businesses expect the new Government to tackle in the next (checks calendar) 10 months? The to-do list is lengthy but some items are more pressing than others.
Tackling energy prices (34%) and keeping inflation under control (33%) were the top concerns for businesses. Unprotected by price caps businesses have felt the full force of the UK energy crisis. Energy prices remain significantly higher than a few years ago and have a clear and negative impact on UK businesses bottom line. At 2.2% in July 2024 UK inflation (CPI) may have fallen from its 2022 peak but businesses certainly don’t want a labour government to preside over it rising again.
Tackling interest rates (26%) was also top of mind for businesses, while wage levels (20%), tax levels (20%) and Brexit and EU trade (18%) come across as second-tier priorities.
Although these issues are deemed pressing by businesses across all sectors and sizes, there are some differences in priority order depending on the size of the business and the sector it operates in.
Larger businesses (1000+ employees) place significantly more importance on workplace productivity (15% v 7% for all businesses), whilst the smallest businesses (1-9 employees) are considerably more concerned about the national debt (26% versus 16% for all), Brexit and EU trade (23% v 18% for all) and falling consumer spending (19% v 11% all businesses).
Looking across sectors, manufacturing businesses are the most apprehensive about energy prices (43%), while service-based businesses are worried more than others about inflation (38%).
Did the announced policies have a positive impact on how financial decision-makers view their business, sector, region, and even the whole of the UK? Looking at those who agree that the government has policies that will benefit their respective areas there is a sense of optimism, although the devil is in the detail – while overall positivity is strong, only a small minority claim they ‘strongly agree’.
We also tested the reactions to three key Bills mentioned in the King’s Speech in terms of awareness, their impact on respondents’ own business, and their potential positive impact on the UK economy in the next five years. Whilst all three Bills showed relatively equal scores, the Employment Rights Bill performed slightly better than others; 38%of financial decision-makers are aware of it, 39% think it will have a positive impact on their own business and 49% a positive impact in the UK in the next 5 years. Larger businesses with 1000+ employees are more likely to agree that the Bill will affect the UK economy positively (53%), compared to smaller businesses with 1 to 9 employees (34%). Understandably, businesses in labour-intensive sectors are more likely to think the Employment Rights Bill will harm their business – overall 16% believe the Bill would affect their business negatively, whereas the figure is 18% for businesses in the manufacturing sector, and 21% in hospitality.
In regards to the other two Bills, businesses in construction in particular are pessimistic about their impact on the UK economy; 19% of construction-related businesses disagree that the Planning and Infrastructure Bill would have a positive impact, with 30% expressing reservations about the impact of the Budget Responsibility Bill, compared to overall levels of disagreement of 14% and 19% respectively.
Where does that leave us? At an overall level, businesses are cautiously optimistic about the new Government’s ability to positively impact the economy and the country as a whole. More specifically, Labour’s three headline economic bills are receiving a positive, albeit somewhat guarded, response, although some do concede their level of knowledge of the detail of the bills is limited. In summary, while there is a long way to go between delivering the King’s Speech and the policy implementation, Labour should take heart from the reactions we have seen so far.
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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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The Labour Party has pledged to enact an Employment Bill within its first 100 days in office that will bring significant changes to employment laws and employee rights. Named the ‘New Deal for Working People’, it promises employees their rights from day one and aims to tackle longstanding issues of worker rights and employment insecurity. The bill proposes banning zero-hours contracts, abolishing fire and rehire practices, and eliminating qualifying periods for basic rights.
While these measures aim to enhance worker protections, their potential impact on businesses requires careful consideration. The proposal has been the subject of much debate, with the party facing lobbying pressure, criticism about loopholes and concerns about power imbalances, but how do businesses feel? To gauge business sentiment, we surveyed 1,200 business decision makers via the Business Opinion Omnibus.
What do businesses make of the ‘New Deal for Working People’?
Overall, the findings reveal low levels of awareness with 36% of businesses entirely unfamiliar with the bill’s contents. Even among those with some knowledge, understanding of the specifics is limited.
Beyond this, the survey indicates that a substantial portion (79%) of businesses anticipate being directly affected by the changes. This includes businesses currently using zero-hours contracts (21%), those with unionised workforces (17%), and those that may need to introduce more flexible working arrangements, allowing staff to ‘disconnect from work’ (34%).
Concerns voiced by employers centre around potential risks associated with outcomes such as stricter dismissal procedures and expanded sick pay entitlements. In response, 70% of businesses indicate they will implement changes to manage this exposure. These adjustments could include:
Sentiment and scale appear to be intertwined, with larger businesses (250+ employees) more likely to foresee potential upsides, such as a more content and productive workforce, while concerns are most pronounced among the smaller businesses (under 50 employees) which often lack the resources to readily adapt. Perceived downsides include higher labour costs (59%), higher recruitment costs (45%), hesitancy over expanding the business by taking on more staff (40%), more litigation (18%), and more industrial action (10%).
The inherent advantages enjoyed by larger businesses are particularly relevant here. These entities possess the resources to navigate potential delays in recruitment, handle disputes, restructure to manage increasing costs or even relocate operations overseas.
We can also see hot spots of discontent by sector, suggesting industry specific concerns. Businesses operating within the retail, wholesale, and construction sectors appear particularly apprehensive.
How might this play out?
The ‘New Deal for Workers’ has potential to significantly reshape the UK employment landscape, creating a business and employment environment closer to that of Europe. Those in work will enjoy more protections and may be happier, but there may also be unintended consequences such as higher unemployment among younger people yet to find their first role, with neither the experience nor the track record to demonstrate that they do not pose a risk to employers.
With loop-holes and work arounds featuring in mainstream news commentary, a broader concern has to be around the creation of a two-tier labour market, especially given that 17% of businesses may attempt to circumvent the new regulations by misclassifying employees as freelancers. This practice would deny these workers the legal protections and benefits they are entitled to.
There are already concerns about how AI and automation could replace some in the workforce, and these changes could accelerate the adoption of new technology to replace employees, as shown by the 15% of businesses who would look to technology to replace employees. This could be a particular pain-point for SMEs as they will not have the same resources or capital to manage these changes.
Ultimately while some businesses perceive potential benefits, a significant number express understandable concerns, but the impact will likely be most keenly felt by smaller businesses. We will continue to monitor the situation closely to assess the evolving impact of these proposals on both businesses and workers.
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