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UK Politics

Business turns against Labour on economy

Businessmen are warming to the idea of a Conservative government and think that Gordon Brown's measures to revive the economy are failing.

A ComRes survey of business leaders found 62 per cent of them think the temporary cut in VAT to 15 per cent is "plain foolish", and only 14 per cent believe it will benefit the economy. More than half (52 per cent) believe the reduction in interest rates to 1.5 per cent will make no difference, a third (32 per cent) think it will be positive and 13 per cent say it will have a negative effect.

The findings came on another black day of economic news. Unemployment rose by 131,000 to 1.92 million between September and November. Some 225,000 workers were made redundant, the highest number in a three-month period since records began in 1995. Net government borrowing soared to a higher-than-expected £14.9bn in December. The total for April to December stood at £71.2bn, and economists warn the Government will struggle to meet its £78bn forecast for the present financial year.

Vince Cable, the Liberal Democrat Treasury spokesman, who predicted that the housing and personal debt bubble would burst, enjoys more trust in the business world than Mr Brown, David Cameron, the Chancellor Alistair Darling and his Tory counterpart George Osborne. Some 58 per cent of the 220 businessmen polled are confident in Mr Cable's ability, 56 per cent say the same about Mr Cameron, 34 per cent Mr Osborne, 30 per cent Mr Brown and only 15 per cent Mr Darling. Mr Cable also outshines Nick Clegg, his party's leader, who enjoys the confidence of 21 per cent.

Business appears to be warming to the idea of a Tory government; 59 per cent of those questioned believe the Tories offer constructive and realistic policies, and 56 per cent think the party is ready for government. Only 18 per cent back Labour's claim that the Tories are a "do nothing party" on the economy.

ComRes shows that business leaders rate Kenneth Clarke, the new shadow Business Secretary, more highly than Lord Mandelson, his opposite number in the Government. Asked to choose who from a list of people they would most want to serve on their board of directors, 38 per cent opt for Mr Clarke, 18 per cent Mr Cameron, 15 per cent Lord Mandelson, 17 per cent the TV presenter Simon Cowell, 8 per cent Mr Brown, 2 per cent both Mr Darling and Mr Osborne.

By a 2-1 margin, businessmen do not believe the Government should bail out the Jaguar/Land Rover company.

Tony McNulty, the Employment minister, admitted the unemployment figures were "very disappointing," but caused a row by claiming there was "light at the end of the tunnel". He told BBC TV: "It is some time off. This is not now life as we know it but we will get through it and people need to understand that and cling to that hope." The Tories seized on his remarks as evidence that Labour was "out of touch". Last week, the Business minister Baroness Vadera claimed there were "green shoots" of economic recovery.

Economists believe the number of jobless will rise steadily this year, possibly 2.5 million by May and three million by year-end. Mr Brown told MPs: "Every job loss, every redundancy, is a matter of regret and sadness for us all. We may not be able to help people keep their existing job, but we will help people get into a new job."

Mr Cameron said: "It is clear that the British economy faces dark days indeed." He added that there was "no real confidence that government policies are working", urging the Prime Minister to admit his rescue plan for the banks had failed because banking shares had fallen. But Mr Brown told the Tory leader he was "out of step with the rest of the world and out of your depth".

Mr Clegg said the British economy was "standing at the edge of a cliff". He said the Government's "announcements and half-measures" had created confusion and uncertainty.