It’s all too easy for politicians and commentators to take a pop at businesses, casting them in the role of greedy capitalists bent on exploiting their workers to make a quick buck.
Fortunately, the British public don’t seem to share that rather dismal view of the private sector. Indeed, new polling commissioned by the Centre for Enterprise, Markets and Ethics reveals some striking statistics on the British public’s attitude towards business, the role of government, solutions to poverty, and climate change.
Savanta ComRes polled six audiences: the general public, regular churchgoers, Muslims, Jews, Church leaders and business leaders. They also conducted in-depth interviews with ten Anglican and Catholic bishops.
The results reveal widespread trust in business amongst the general public, especially when it comes to small local and family businesses.
Such high levels of trust in business are a cause for optimism. Perhaps they reflect a post-lockdown realisation that business is a force for good, be it in job creation, wealth creation, innovation, or environmental and climate issues. Covid restrictions, and the difficulties faced by so many companies, may have also reminded the public of just how vulnerable some businesses can be – hence the high levels of support for small and medium-sized enterprises (SMEs).
Our findings bring out the central role of SMEs, local and family business to the Government’s levelling-up agenda. It is an opportunity to drive the idea that SMEs are the powerhouse of the economy and should be supported and incentivised to grow.
Nor are voters necessarily convinced that the Government’s high-tax, high-spending approach is the way out of our economic problems. The polling reveals that 49% of Brits prefer lower taxes as a way of achieving a fairer society, compared to just 33% who favour higher tax and government redistribution.
It’s worth remembering just how historically high current levels of spending and taxation are. Taking into account the recent Budget measures, government spending is on course reach 41.6% of GDP within the next five years – the highest level since the 1970s. The tax burden is also set to surpass 36% of GDP, a level last seen in Clement Attlee’s post-war Labour government.
And things haven’t been made any easier by the recent Health and Social Care Levy, which increases the tax burden on those in work. This represents a tax on the very source of economic growth, effectively placing the breaks on private sector activity that is so desperately needed in our still fragile economy. Add to that the possibility of persistent inflation – and possibly stagflation – hitting family budgets and damaging the post-Covid recovery.
The Herald‘s Iain Macwhirter summed up the pitfalls of Boris Johnson’s approach to the economy rather well:
“Perhaps the greatest risk of all was his giving the finger, metaphorically speaking, to his own party. Many Conservatives, not just those who revered Margaret Thatcher, are appalled by his adoption of tax-and-spend economics. […] This is a huge risk when inflation is rising, trade falling and the UK economy suffering an energy crisis on top of a labour shortage. The PM’s ‘age of optimism’ may soon look more like an age of delusion.”
For all of our sakes let’s hope Iain is wrong, though it’s hard to escape the nagging feeling that he may be spot on. One of the big issues is that inflation will gradually eat away at people’s spending power. The change may not be immediately palpable, but over time taxpayers will slowly realise how much worse off they have become.
What effect that has at the ballot box is a different question. Some of those on the right feel understandably despondent at the Tories’ apparent rejection of free market economics, and chary of any claims from the PM to be a fiscal conservative. Then again, the Conservative Party’s electoral coalition has changed dramatically in recent years, and many of its new voters may be more relaxed about Johnson’s state-heavy approach to economic management. Our polling suggests, however, that voters across the board recognise that business has to be central to sustained economic success.
The problem is that that approach seldom leads to the kind of economic growth we so badly need. We can only hope that Boris sees the light before it’s too late, reins in the spending and reduces the tax burden – something Rishi Sunak has repeatedly stressed he is committed to. Ultimately, the aim should be to create an environment where government protects, liberates, and encourages a growing private sector – and as our polling shows, that’s something we can all get behind.
This article was first published in CapX.
Andrei E. Rogobete is the Associate Director of the Centre for Enterprise, Markets & Ethics. For more information about Andrei please click here.