Survey by British Chambers of Commerce showed 65% of its members were concerned about a hung parliament and how it would affect decision-making
The majority of businesses are worried about the impact a hung parliament could have on the economy as the UK hauls itself out of recession, according to a survey from the British Chambers of Commerce.
The business body's monthly poll of members shows 65% are "concerned" or "very concerned" about a failure to secure a parliamentary majority at the election and what it may mean for decision-making.
David Frost, the group's director general, said: "Businesses are right to be wary about the prospect of a hung parliament. Instinctively, companies prefer a clear mandate to lead and govern. With our economy still fragile and the public finances in a dire state, the overwhelming concern is whether a hung parliament will provide decisive action around the UK's unsustainable deficit."
Companies' concerns about a hung parliament reflect fears that have spooked financial markets in recent weeks. The pound has weakened as opinion polls have shown rising popularity for the Liberal Democrats.
However, the initial shock – sparked by Lib Dem leader Nick Clegg's perceived victory in the first leaders' TV debate – has worn off. Last week, Goldman Sachs advised clients to buy the pound as currency markets have "become a lot more comfortable" with the possibility of a coalition government and have realised that all key parties "seem to support a degree of fiscal consolidation in the foreseeable future".
In the BCC survey, there were still a significant number of companies not worried by a hung parliament. Among the 300 surveyed, 13% said it would be "a good thing" and 22% were "not concerned".
Asked which form of taxation was most likely to rise after the election, leaving aside the planned increase in national insurance in 2011, 54% of companies said VAT would be put up, 13% excise duties and 12% income tax.
Frost added: "Most businesses expect VAT to increase after an election to help plug the hole in our public finances. Considering companies have already said that VAT would be less damaging to their operation than a hike in national insurance contributions, it seems obvious that the tax on jobs should be scrapped and replaced by a less harmful tax on consumption."
Copyright Speakers Corner 2017