1st Formations sent out a survey to tens of thousands of small businesses across its customer base in early June.
Of the 800 people who responded, the majority worked in industries such as technology, e-commerce, finance, education, construction, hospitality, real estate and retail.
Of the 800 people who responded to a new First Formations poll, 51% said they thought the Conservative Party was better for business (than Labour).
“Given that the Conservatives have historically been seen as the party of business, it's actually quite surprising that they only managed 51% support,” said Graham Donnelly, CEO and founder of First Formations, the UK's largest company formation agency. “The fact that Labour has increased its support to 49% shows how much it has grown since the days of Jeremy Corbyn.”
There are 5.5 million small businesses in the UK, yet they are often neglected or overlooked by politicians.[3] Companies of a similar size (0-49 employees) earn:[4] It shows that SMEs account for around three-fifths of UK private sector employment and more than a third of the country's total turnover – 13.1 million employees and an estimated turnover of £1.6 trillion.
Graham continued: “The clear statement from small business owners that they feel they are being treated less favourably than larger businesses by the UK Government should be a wake-up call for both Labour and the Conservative parties. The Government's unwillingness to cut business rates and VAT rates, combined with the disproportionate impact of Brexit on SMEs' ability to recruit the talent they need to function effectively, is likely to stifle the economic growth the UK desperately needs.”
To gain a deeper understanding of the political priorities and needs of small businesses across the UK, the first Formations 2024 election survey asked business owners a broad series of questions, including: Do you think the UK Government prioritises the interests of large businesses over SMEs? Of 800 respondents, 66% said 'yes' and 10% said 'no'. The remainder said 'don't know'.
The survey also asked owners: “Has your business been positively or negatively affected by Brexit?” 42% of respondents said “negatively” and 9% said “positively”. The rest answered “neutral”.
Meanwhile, when asked, “Is your industry suffering from a labour or skills shortage?” 62% answered “no” and 38% answered “yes.” Those who answered “yes” were then asked, “Is your business suffering from a shortage of skilled labour from the EU?” 58% answered “yes” and 42% answered “no.”
Dr Sultan Salem, an economist at the University of Birmingham, particularly highlighted the importance of small and medium-sized enterprises to the UK economy, saying: “All businesses make an important contribution to the UK economy, but it is important that we start to focus on small and medium-sized enterprises.” [more] Entrepreneurs and small businesses, who have traditionally been more adaptable to new technologies and innovations; [therefore more to likely to drive] Substantial [growth] For the UK economy.”
“Given the above, Labor appears to be the better choice for sustainable long-term economic growth. Labor proposes targeted support for small businesses, including access to finance and local economic development. Labor policies often include grants, subsidies and support programs to help small businesses thrive,” Salem said, adding that his analysis remains neutral and data-driven and does not endorse any particular political party.
The Conservative government's long-standing policies of lower taxes, deregulation and free markets have helped establish large businesses (as well as small businesses), but the benefits generated by these policies have not been shared equally by all businesses, especially entrepreneurs, Salem said.
“Given the myriad challenges facing small businesses, a Conservative re-election is likely to mean only a continuation or slight expansion of existing policies, namely a continued focus on tax cuts and deregulation. There may be benefits for some large internationalised sectors that favour deregulation, but overall the benefits are likely to be unevenly distributed. If Conservative policies have not worked well over the past few years, continuing them is unlikely to make any difference,” Salem concluded.