Prime Minister Rishi Sunak’s Conservatives and the opposition Labour Party are battling over the economy as they ramp up their campaigning for a 4th July national election.
Following the disastrous Truss government, 2023 proved anything but easy for the Conservative Party. In the first full year under Rishi Sunak, it lost six by-elections, with the opposition gaining power in constituencies previously known as Conservative strongholds.
In short, the 2024 election is Labour’s to lose and threatens a Tory wipeout, according to the first polling projection by YouGov since the election was called. Sir Keir Starmer may take power with the biggest Labour majority for 100 years, back when Stanley Baldwin took office by storm.
However, the national vote is less clear when it comes to small businesses.
Who is the Party of Business?
In a brand new study, we asked thousands of small business owners across the UK: which of the two main political parties in the UK would be better for your business?
With over 500 votes counted, preliminary data from our Rapid Formations 2024 UK Small Business Survey reveals a very close call, with 52% of respondents voting Conservative and 48% Labour.
While the Tories come out on top, the results reflect a warming to Labour and, more specifically, a shift in perception around the party’s economic credentials. In this arena, Starmer is fighting a Conservative Party that has historically, and successfully, presented itself as the Party of Business. At the same time, just five years ago, under a potential Corbyn government, the Labour Party managed to alienate large swathes of the UK business community.
In short, it would have been unimaginable for Labour to poll 48% of the small business vote in November 2019, a month before the general election. “Business fears a Corbyn government almost as much as Brexit”, read one now famous headline from the Financial Times.
In light of this backdrop, Labour has made significant ground. However, they are still suffering from Corbyn’s reputational damage, much as the Tories reel from the divisions and legacy of Brexit.
It is no surprise, therefore, that Starmer is on a concerted drive to steal business’ support. Shadow Chancellor Rachel Reeves even suggested that, under her watch, Labour will be more pro-business than under Blair.
“If I become chancellor, the next Labour government is going to be the most pro-business government this country has ever seen,” Reeves told The Times. “More pro-business than Blair’s administration, because I genuinely believe the way to improve living standards and to achieve our potential is by unlocking private business investment.”
Whether that means unlocking investment for small business remains to be seen. Both parties must be cognizant that, as revealed by our 2024 UK Small Business Survey, a whopping 65% of respondents think that the UK government puts the interests of big business over small-to-medium-sized enterprises (SMEs).
The small business vote is very big
Politicians often understate or overlook small businesses in the UK, despite the existence of 5.5 million companies of that size (with 0 to 49 employees).
In fact, the latest figures from the Federation of Small Business show that small businesses account for nearly three-fifths of employment, and over a third of national turnover in the UK private sector, or 13.1 million people and an estimated turnover of £1.6 trillion.
“While all businesses are important contributors to the UK economy, it is important that we start focusing [more] on entrepreneurs and SMEs, who are traditionally more adaptable to new technologies and innovations, and [therefore more to likely to drive] substantial [growth] to the UK economy,” says Dr Sultan Salem, an economist at Birmingham Business School.
A very surprising result from the survey. I would have expected it would swing slightly the other way to reflect the ever growing swing to Labour (as shown in multiple consecutive YouGov polls). Just shows you everything is still to play for with certain demographics.