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Spring budget 2024:

how did UK businesses react?

With a general election fast approaching, the spring budget was one of the final opportunities for the Conservatives to regain momentum. Did it have the desired effect? Data from Savanta’s UK Business Tracker suggests the Chancellor’s announcements fell short of expectations.

Emma Beashel Executive 16/04/2024
Businesses greet the spring budget with a collective shrug of the shoulders

The Government hoped the spring budget would be transformative, yet the reaction from the business community was broadly apathy.

Half (50%) of businesses think the spring budget will make no difference to their outlook and their opinion is split on how the budget will affect the wider UK economy.

Three in ten (28%) said it would improve the UK’s economic outlook, while 32% said it would worsen and 34% believed it would make no difference.

Ultimately, businesses simply do not feel that the budget goes far enough in supporting them, with six in ten (57%) saying it didn’t contain enough measures to support their business.

Small businesses feel left behind

Where does this sense of apathy stem from? It is possible that the spring budget delivers too little, too late, especially in the case of small businesses.

Just one in five (20%) of small businesses (fewer than 250 employees) supported the measures in the spring budget, compared to 35% of medium and large businesses. This is surprising given prominent measures sought to appeal to small businesses.

Jeremy Hunt presented the VAT threshold increase as a transformative measure for small businesses. Yet only 28% felt that this would help them, as opposed to 52% of medium/large businesses. It is possible that the £5,000 increase is too small an amount to be seen to make a significant difference to their business operation – a gesture in the right direction, perhaps, but nothing more. Indeed, more than half (55%) of small businesses – and 57% of businesses overall – would advocate further cuts to VAT.

The party of business no more?

Savanta’s polls with business decision-makers before and after the spring budget show that UK businesses now see Labour as the party of business, with Labour holding a 14-point lead over the Conservatives (46% vs 32%).

Keir Starmer (41%) also enjoys a commanding 9-point lead over Rishi Sunak (32%) for who is seen as best for businesses in the UK. However, Rachel Reeves (32%) holds a much smaller lead over Jeremy Hunt (29%).

In a remarkable turnaround from a few years ago, Labour has consolidated its position as the party of business.

The spring budget – a missed opportunity?

These insights from Savanta’s UK Business Tracker show that, as far as businesses are concerned, the spring budget did not take their needs into account. The spring budget aimed high, attempting to regain favour among businesses. Yet the response was lukewarm, at best.

Interested in reading more about our research within the political space? We will help you navigate the noise of an unpredictable election year. Understand the real drivers behind political opinions that are shaping societal change ahead of a turbulent year.

About the Savanta Business tracker

Our monthly (UK) and quarterly trackers (Europe) monitor the recovery, resilience and adaption of businesses. Whether you want to understand the latest pressures and challenges impacting businesses on a regular basis or just ask a couple of questions to support your decision-making, our monthly tracker provides a timely and cost-effective approach!

To find out more contact our dedicated team of B2B experts. 

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