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General election result leaves smaller firms uneasy

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A substantial number of small businesses would like to see another general election six months from now in the hope it will produce a clearer mandate for one party to govern, a new poll has suggested.

The snapshot survey, carried out by the Federation of Small Businesses (FSB), revealed that 49 per cent of respondents want another general election this year.

More than half (54 per cent) claimed they would not be moving forward with plans to introduce new services or products or to take on new staff as a consequence of the inconclusive outcome to the election.

Almost the same proportion (52 per cent) expressed a lack of confidence in the economy.

Seven out of 10 small firms want the incoming government – of whatever complexion – to reduce the budget deficit, and 52 per cent want this done through cuts in public spending, sooner rather than later.

Another 44 per cent want to see the banking system reformed and 38 per cent want the government to steady the financial markets. 

John Walker, the FSB’s national chairman, commented: “These figures worryingly show that small firms have lost confidence in the economy following the outcome of the election just as the business community was beginning to recover from the downturn.

“At a time of economic uncertainty small businesses really need a government – of whatever make-up – to get on with the job and set out a plan for dealing with the deficit and returning the UK economy to growth. 

Mr Walker went on to argue that confidence is vital for small businesses: “We know that they want to take on new staff and grow their business, but are still cautious about whether the economy is strong enough to do so.”

The FSB is calling for a renewed economic stimulus to help small businesses create jobs and innovate.