Businesses want next government to increase spending – but only slightly

The majority of businesses want to see the next government increase public spending, but most remain concerned over Labour proposals for nationalising several industries, a new survey has found.

Asked by the Institute of Directors (IoD) what they consider the highest priority in the next parliament, members said help to prepare for Brexit, support on skills, and investment incentives.

The poll of 1,000 members also found that, on infrastructure, business leaders want broadband investment prioritised, followed by road improvements, and expansion of renewable energy generation.

Edwin Morgan, director of policy at the IoD, said: “By and large, directors agree that the economy needs a shot in the arm, particularly with many firms facing the prospect of Brexit upheaval.

“Companies have been calling out for infrastructure improvements across the country for a long time, and they will be pleased that this is one area where all the parties appear to agree on the need to raise our game.”

But he added that, although businesses want to see an increase in spending, they would prefer to see only slight rises.

Just 28% of businesses said spending should increase “significantly”, with 49% saying it should increase “slightly”. Only 8% of respondents said it should fall.

Mr Morgan said: “Of the three-quarters of directors who want to see a spending increase, most want this to be slight rather than significant, so the next government will still have to focus on value for money.

“The next government must work with the private sector to protect and boost the economy. Business leaders are as frustrated as anyone by slow broadband and cancelled trains, but taking whole sectors under state control would consume huge amounts of government time and effort while offering no guarantee of improvements.”

The Conservatives and Labour have both promised to increase spending if they win the General Election.

But Labour has vowed to spend far more, including nationalising Openreach, water utilities, electricity network operators and the railways.