Businessmen want immediate cuts in public spending and believe the Conservatives have better economic policies than Labour, according to an eve-of-Budget survey for The Independent.
The ComRes poll of 185 business leaders will increase the pressure on Alistair Darling to announce detailed cuts in next week’s Budget. Only 28 per cent support the Chancellor’s view that immediate cuts would jeopardise economic recovery, while 72 per cent endorse the Tory Opposition’s call for cuts to start this year to reduce Britain’s £178bn public deficit.
However, when asked whether they would support eight specific cuts or tax rises, businessmen backed only one idea – cutting the social security budget. They opposed a rise in income tax and VAT, putting VAT on food, and reduced spending on the NHS, education and defence.
That finding will give Labour a crumb of comfort. The Tories plan to spell out some proposed cuts after the Budget and before the general election, despite previous announcements of cuts having harmed the party’s ratings in the polls.
By a big margin, business leaders believe the Tories have both the clearest and the best economic programme. 58 per cent say David Cameron’s party has the best policies, with only 13 per cent saying Labour, and 45 per cent think the Tories have the clearest policies, with just 15 per cent saying Labour.
A majority (69 per cent) of business leaders believe a hung parliament with no party enjoying an overall majority would be bad for the economy generally; only 7 per cent say it would be good and 24 per cent neither good nor bad. However, they are less worried about the impact on their own company.
There is little sign of “green shoots” taking hold. The proportion of businessmen who detect signs of economic recovery has risen only slightly in the past month, from 47 to 49 per cent.
According to ComRes, businessmen have little confidence in Mr Darling as he prepares to present his Budget. Only 21 per cent say they are confident in his ability, only half as many (42 per cent) who have confidence in George Osborne, the shadow Chancellor. He also outscores Mr Darling on understanding business (by 64 to 27 per cent).
However, the poll also reflects doubts in the business world about Mr Osborne’s credentials.Seventy-eight per cent of those polled believe he lacks experience and 46 per cent say he is out of his depth.
Mr Cameron (55 per cent) enjoys a higher “confidence rating” among business leaders than Mr Osborne. So do Kenneth Clarke, the shadow Business Secretary and former Chancellor (66 per cent) and Vince Cable, the Liberal Democrats’ Treasury spokesman (57 per cent). Only 19 per cent of them have confidence in Mr Brown, 25 per cent in the Business Secretary Lord Mandelson, and 20 per cent in the Liberal Democrat leader Nick Clegg.
Mr Darling, who has shelved a government-wide spending review until the autumn, came under further pressure yesterday to outline specific cuts in the Budget. The European Commission said in a report that “the absence of detailed departmental spending limits is a source of uncertainty”. It also suggested that the Treasury’s forecasts of economic growth may prove optimistic.
Mr Darling received conflicting advice in last-minute submissions from trade unions and business groups. The TUC warned the economy was “far too fragile” to withstand spending cuts and said there was still a “huge risk” of a double dip recession. But the British Chambers of Commerce called for a clear deficit reduction plan, and urged him to scrap a planned 1 per cent rise in employer national insurance contributions due to take effect in a year’s time, branding it a “tax on jobs”.