SMEs Fear Hung Parliament
Almost two-thirds of small firms are concerned about the potential impact of a hung parliament, a British Chambers of Commerce (BCC) survey has revealed.
The BCC poll of 300 small firms found that 65% are concerned about the impact of a hung parliament. Just 22% are unconcerned, and 13% thought the failure to secure a working parliamentary majority at the General Election would be a “good thing”.
A hung parliament occurs when no party has an overall majority — more than half of MPs in the House of Commons. Currently, a party would need to win 326 seats in order to have an absolute majority, which according to recent polls is unlikely.
If there is a hung parliament, the current Prime Minister will remain in power either by forming a minority Government and trying to get a majority to pass individual Bills, or by forging an alliance with another party to form a coalition Government.
According to the BCC, a hung parliament would lead to indecision at a time when the UK needs decisive action on the economy.
“The two-thirds of businesses who are concerned about a hung parliament know that the public finances are in a dire state and that something needs to be done about them,”
said BCC spokesman, Sam Turvey.
“They fear that politicians and party leaders will spend too much time horse trading over what policies they’ll each accept to form a coalition, instead of working together to address the big issues decisively. A hung parliament would result in weak leadership and slow down the economic recovery.”
“The Liberal Democrats suggested an economic cooperation stability panel to work together to bring down the debt. This would be a positive measure, but it has been rejected by the other parties.”
Commenting on why 13% of those surveyed are in favour of a hung parliament, Turvey added:
“Perhaps they prefer the policies of one of the smaller parties and so they assume the party they support would have more influence in decision-making.”
Martin Austin, director of recovery at business services firm RSM Tenon, said that a hung parliament would only be effective if the parties were willing to compromise.
“Whoever runs the country after 6 May must make it a priority to get British businesses back on target and kick-start initiatives for them,” he said.
According to National Federation of Enterprise Agencies (NFEA) chief executive, George Derbyshire, a hung parliament would lead to backdoor deals taking place.
“The concern is that the only way a hung parliament could work is by making concessions to various vested interests and smaller groups, and take longer to resolve issues,” he said.
Although the UK has not had a hung Parliament since 1974 due to the “first past the post” electoral system, most EU countries use a proportional representation system and are run by coalition Governments.