Post-election survey of IoD members sets out businesses’ priorities for the next five years:
- Britain’s SMEs overwhelmingly back deficit reduction, to be balanced towards spending cuts, rather than tax rises
- Infrastructure and education ranked as the top priorities for business
- 9 in 10 IoD members back clamp down on tax avoidance
Members of the Institute of Directors are calling on the Government to bring down the deficit, make infrastructure and education their top priorities, and where possible, cut taxes for businesses and individuals over the next Parliament.
In a survey of 1,211 IoD members conducted immediately after the general election, an overwhelming majority (85%) supported plans to run a budget surplus by the end of the parliament. Business leaders think deficit reduction should be achieved primarily through spending cuts rather than tax rises. Over half of IoD members strongly oppose increases in National Insurance, Income Tax, VAT and business rates.
Infrastructure and education are ranked as the top issues for businesses who want the government to make them an “immediate priority”, with over half strongly opposed to spending cuts in these areas.
Improving the UK’s broadband capability is the most urgent infrastructure project, with 56% prioritising government investment in high-speed internet. More than half of IoD members (55%) also want the government to invest in energy generation and there was strong support for spending on railways (50%), roads (44%) and airports (34%) over the next five years.
Businesses also back plans to clamp down on tax avoidance, with 89% of IoD members – the majority of whom are small and medium-sized companies – saying they supported the Government’s plans to address aggressive tax avoidance. However, there was a large degree of scepticism as to how much money would be raised through the measures, with less than one in six (15%) confident that the government would raise the £5bn it has outlined.
Simon Walker, Director General of the Institute of Directors said:
“The election result was more decisive than most expected, and now is the time for the new Government to take decisive action. Returning the budget to surplus must be the overriding goal in this parliament, but businesses want the emphasis to be on finding further reductions in spending, not significantly raising taxes.
“While cuts are always difficult to make, the simple truth is that every year we run a deficit is another year that the stock of debt increases, and interest payments with it. Interest rates on government debt may be low now, but they will not stay low forever. If we do not even begin to deal with the pile of debt, the situation will only be more dangerous if we encounter another economic shock.
“Britain needs broadband cables, runways, railways and power, and we are looking to the Government to deliver them. Building a modern infrastructure network will help businesses move goods, people, products and services around the world, giving small and medium-sized companies the best chance to succeed, scale up and compete on the global stage.
“A hugely complex tax code also remains a barrier to growth for many businesses. We welcome the Conservatives’ manifesto pledges to raise the personal allowance and the 40p threshold over this Parliament, but much more fundamental reforms are needed. Businesses want national insurance brought down, business rates reformed and a tax code which encourages investment and entrepreneurialism. This will not be achieved by tinkering at the edges.”