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Businesses show discord over hung parliament

Businesses show discord over hung parliament

Category: Business

Updated: 11/05/2010
First Published: 11/05/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
The confidence of small UK businesses has taken a hit because of the hung parliament, and almost half would like another election within six months.

More than half (54%) of firms said they would not move forward with plans to expand their operations because of uncertainty that has been caused by the current situation.

Furthermore, 49% of firms said they wanted to see another general election take place within the next six months, according to the Federation of Small Businesses (FSB).

The outcome of last week's vote has left 52% of firms saying they lack confidence in the economy.

In addition, seven in ten want the incoming government – whatever its complexion – to reduce the budget deficit, with 52% favouring cuts in the public sector to do so.

Under a Lib-Lab coalition, any cuts in the economy would be delayed until the next financial year, a move made possible by a 1% rise in employer National Insurance contributions.

The Conservative Party have pledged to scrap these plans, instead making cuts to the public sector immediately, while making 'efficiency' savings.

"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," said John Walker, national chairman of the FSB.

"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."

Figures also showed that 44% of firms want to see the banking system reformed, and 38% want the government to steady the financial markets.

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