New survey reveals main support is for proportional representation – not represented in forthcoming May referendum

A majority of the British electorate want to get rid of the current First-past-the-Post parliamentary voting system, and replace it either with the Alternative Vote or with Proportional Representation, according to new research from analysts Lindsell Marketing.

In a poll of over 2,000 British adults, just 29% wanted to keep the current voting system, with 20% in favour of the Alternative Vote system (the subject of a national referendum on May 5^th 2011) and 45% wanting some form of proportional representation.

The results of this Lindsell survey call into question the validity of the May 2011 referendum, in that it does not reflect a true choice of voting systems.  The Alternative Vote is regarded by many as fairer than First-past-the-Post, but does not ensure that the national party balance of MPs is proportionate to the total volume of votes cast for each party.  To be truly representative of available voting system options, the May referendum should also present citizens with proportional systems such as Additional Member, Alternative Vote Plus, Single Transferable Vote or Party List.

Support for First-past-the-Post is skewed towards men (34%), whereas a higher percentage of women (69%) want AV or PR, compared with men (61%).

Regional preferences show the electorate the South East and the Midlands have the strongest desire to keep First-past-the-Post, with Wales (71%) and Yorkshire & Humberside (74%) most strongly in favour of a change to AV or PR.

Paul Lindsell, Managing Director of Lindsell Marketing, comments, “We felt it high time that a preliminary barometer reading of voting system preferences should be taken, at a sensible distance from last May’s elections, but also early enough to inform the structure of the proposed May 5^th Referendum on electoral reform.

“It is startlingly obvious from these survey findings that to conduct a referendum where the only options are First-past-the-Post or the Alternative Vote is utterly nonsensical.  The strongest demand amongst the electorate is clearly for some form of proportional representation, where the balance of the national vote is reflected in the balance of parties represented in the House of Commons.  It is even more evident that a clear (proportionate) minority of voters want to hold onto the old voting system.

“Debates within and between the parties about whether they would be electorally better off with the old system or a proportional alternative have become increasingly sterile and nakedly self-interested in recent years.  Now, even within the old system, the country is being run by a coalition, seriously undermining the supposed link between proportional representation and weak government.  The British people have spoken.  Surely is now time for politicians of all colours to face to the inevitability of electoral change, if they are not to further lose the public’s confidence.”

Methodology

2,003 British adults were interviewed between 25^th October and 5^th November 2010.  The interview sample was representative by age, gender, region and social grade.  Respondents were asked about their preferred parliamentary voting system, first-past-the-post, the alternative vote, or some form of proportional representation.  Respondents were able to view a clear and simple explanation of how each system works, in order that their responses were fully informed.

© Lindsell Marketing, November 2010

Measures to reduce the current public sector deficit will have to be of a scale and significance to make an appreciable dent in this figure, in a bid to put Britain back in the black.  In order to obtain an expert view on the issue, business analysts Lindsell Marketing canvassed the views of the private sector professionals who have to make such hard financial decisions every day of the week.  Over 1,000 UK company finance managers were surveyed during May and June 2010.  The sample of respondents provided representation of the national business community in terms of region, size and sector.

While 48% of respondents focused the need to make spending cuts on central government departments and quangos, only 9% thought that NHS spending should be cut, and just 4% thought policing budgets should be reduced.  Even local government was largely designated a ‘no go’ area by company finance managers, with just 13% of respondents pinpointed this sector for cuts.  Education was also earmarked as a relatively low priority, with just 15% of respondents wanting priority cuts in this area.  In contrast, however, Defence was highlighted by 33% of UK company finance managers for spending cuts.

Paul Lindsell, Managing Director of Lindsell Marketing, notes, “In terms of spending cuts, finance professionals are advising the government to leave the Police, NHS, Local Government and education largely alone, and instead focus on cutting waste in Central Government departments and Quangos, and the Defence budget. This key finding may suggest that finance managers believe health, law & order and local government to be ‘leaner’ than central government departments and quasi-autonomous non-governmental organisations, and that therefore these two categories hold the highest potential for cost savings.    An alternative interpretation may be that law & order, health service and local government spending should be retained for reasons of social responsibility, stability and cohesion.

“This clear indication to steer clear of law & order, healthcare and local administration when implementing budget cuts only partly endorses Government policy.  NHS spending has been ring-fenced, although the shadow health secretary is now saying this policy will drive reductions in local and community services.  Policing budgets, in contrast, are facing cuts, with Scotland Yard’s head of counter-terrorism warning of adverse affects on his part of the service and the president of the Association of Chief Police Officers (ACPO) stating that reductions in police numbers would be inevitable.   Local government has been told to find £1.165bn in savings in the Chancellor’s emergency budget, representing the largest single contributor to the Government’s cuts programme.  Yesterday’s survey from the Local Government Association gives corroborative support from voters for cuts to steer clear of front-line local services.

“This study gives the clearest possible indication that private sector professionals consider cuts in socially important areas such as health, policing and local services as a very dangerous game indeed.  Moreover, the emergency budget largely ignored the need, pointed out in previous recent studies from Lindsell Marketing, to substantially raise income tax for earners below the newly introduced upper rate threshold of £150,000 per year.  The coalition government has a honeymoon period in which to really address the public sector deficit, but it may well turn out that fudging the politically sensitive area of income tax is a critical mistake.”

Methodology

1,021 finance managers at British firms were interviewed between June 5^th and July 3^rd 2010.  The sample of respondents provided representation of the UK business community, by company size, sector and region.  Respondents were asked which areas of public spending should be the main focus for cuts during the term of the current government.

Measures to reduce the current public sector deficit will have to be of a scale and significance to make an appreciable dent in this figure, in a bid to put Britain back in the black.  In order to obtain an expert view on the issue, business analysts Lindsell Marketing canvassed the views of the private sector professionals who have to make such hard financial decisions every day of the week.  Over 1,000 UK company finance managers were surveyed between May 4^th and May 14^th 2010.  The sample of respondents provided representation of the national business community in terms of region, size and sector.

Overall, income tax must rise, according to British finance managers, as around two thirds firmly point government towards this unpalatable, but necessary priority.

In contrast, only a quarter of respondents thought that rises in VAT or the establishment of a £1m+ property owners tax would be moves worthy of priority government attention.  Making changes to National Insurance, or putting Inheritance Tax rates up were seen as a priority by even fewer finance managers, possibly respondents feel such initiatives to be essentially ‘unfair’, hitting the pockets of the least well-off in society in an indiscriminate approach.

In terms of the threshold for higher rate income tax, UK private sector finance professionals think that the current £150,000 threshold may be too high to have any meaningful effect.  A quarter of respondents recommended prioritising tax rises for £150k+ earners, but a further fifth thought this should be reduced to £100k+, and a further fifth felt the threshold should be just £50k.  Working from HMRC figures[1], the authors of this report have shown that an increase of 10% in income tax revenues from £150k+ earners would raise just a few hundred million pounds, whereas a 10% increase in income tax revenues from £100k+ earners would deliver several billion pounds into the exchequer.

In terms of spending cuts, finance professionals are advising the government to leave the Police, NHS and local government largely alone, and instead focus on cutting waste in central government departments and Quangos.  This key finding may suggest that finance managers believe health, law & order and local government to be ‘leaner’ than central government departments and quasi-autonomous non-governmental organisations, and that therefore these two categories hold the highest potential for cost savings.    An alternative interpretation may be that law & order, health service and local government spending should be retained for reasons of social responsibility, stability and cohesion.

Paul Lindsell, Managing Director of Lindsell Marketing, notes, “The new administration really needs to pay attention to the outcomes of this research.  Experienced finance professionals, who have to make hard decisions week in, week out, are telling the new boys on the block not to tinker around the edges, but to get straight down to the hard tack.  With the inter-party negotiations out of the way, the first hundred days of this government will be judged on one key issue – tackling the public sector deficit.  Dogma has to be thrown to the four winds, and the door opened to level-headed practicality.

“Income tax undoubtedly has to rise, with Britain’s finance managers saying that spending cuts – while necessary – are not enough.  Tinkering round the edges with insignificant tax revenue streams such as inheritance tax, capital gains or property taxes, is largely a waste of time.  Most important is to establish an income threshold for upper rate tax that brings in significant sums – and the findings of this report strongly suggest that this level should be around the £100,000+ mark.  This could raise several billion, while keeping that additional burden focused on the c.700,000 wealthiest taxpayers.”

For further press information, please contact:-

Lindsell Marketing on 0207 402 0510

Methodology

1,008 finance managers at British firms were interviewed between May 4^th and May 14^th 2010.  The sample of respondents provided representation of the UK business community, by company size, sector and region.  Respondents were asked, “At the time you answer this question, we will either be in the last run-up to the general election in the UK, on the day itself, or in the week following.  Whoever gets into power, they will have to deal urgently with the huge public deficit – currently around £160bn.  With this in mind, and regardless of the way you vote, which fiscal actions do you believe the incoming government should prioritise?”

Lindsell Marketing, April 2010

Management Summary

• Confidence in the economic management competence of the three main UK political parties is a key issue in the current election campaign
• Very few recent opinion polls have canvassed the opinion of British business, despite the fact that business people best qualified to judge the likely economic competence of each party
• Business analysts, Lindsell Marketing, have attempted to fill this gap by surveying over 1,000 UK firms about this crucial issue
• The ‘Clegg Effect’ is clearly reflected in the survey’s findings (LibDems, 27%), reflecting the Liberal Democratic boost resulting from recent exposure through the televised leaders’ debates
• Conservative support from business on the economic competence issue (Con, 30%), which was clearly in the lead last December, is now neck and neck with the Liberal Democrats
• In the eyes of the business community, Labour languishes in third place, an also-ran at just 17%
• This survey provides an evidence basis for debate around the issue of economic competence, and may encourage analysts to spend more time evaluating how the Conservatives and Liberal Democrats might work together to find common ground for economic regeneration policies and initiatives

Introduction

Recent weeks have seen the emergence of an apparent three horse race in the current UK general election campaign.  The Liberal Democrats have been the clear beneficiaries of prominence and visibility conferred by televised debates amongst the party leaders, although Labour supporters also claim that the Prime Minister’s image has also been assisted by his television performances[1].  The Conservatives, formerly a good distance ahead of both other parties in the opinion polls, now find themselves having to combat two apparently stronger rivals in the bid for a win on May 6^th.

As usual, a flurry of opinion polling has been taking place[2], with an extraordinary hike being seen in the polled voter opinion between 16^th and 18^th April[3] in support of the Liberal Democrats, following the first leaders debate.  Yet throughout these debates, and indeed across the whole general election campaign, no party has offered the electorate a detailed plan of how to eliminate the public deficit and put Britain back in the black.

In the calendar year 2009 the UK recorded a general government deficit of £159.2 billion, which was equivalent to 11.4 per cent of gross domestic product (GDP)[4].  At the end of December 2009 general government debt was £950.4 billion, equivalent to 68.1 per cent of GDP.  The Maastricht Treaty’s Excessive Deficit Procedure sets deficit and debt targets of 3 per cent and 60 per cent respectively for all EU countries.  Clearly, detailed and convincing planning is needed to reverse this situation over the term of the next government.

Economic competence is recognised as a critical issue in general elections, or rather the electorate’s perception of economic competence, perhaps most famously typified in Bill Clinton’s campaign headquarters sign which read, “It’s the economy, stupid.[5]”  However, while much energy in the UK general election campaign to date has (naturally) been devoted to overall polls of the electorate, few have been conducted amongst a similarly representative sample of British business (with the exception of outputs from the British Chambers of Commerce[6]).  The Conservative party has managed to attract qualified approval for some of its policies from the leaders of a number of large businesses[7], but this hardly forms a representation of the views of the two million UK trading companies.

The UK business community consists mainly of firms employing fewer than 50 staff, who (numerically) make up some 97% of British business employers.  Small and medium-sized businesses (up to 250 employees) also generate 50% of the country’s business turnover.

Understanding the views of British business, especially their appraisal of the economic competence of the three main political parties, is an important but neglected area of research and polling.  Business revenues create the larger part of a country’s gross domestic product, and UK firms may therefore be taken as highly expert judges of the economic competence of any current or future government.

Various commentators have noted that all three main political parties do not seem to have paid enough attention to the views of the business community.  In one recent example[8], Joy Nichols, chief executive of the CMB2 Group and a spokesman for The Enterprise Trust, a think tank for industry, criticised all three parties for their piecemeal approach to government procurement through SMEs.

In order that the views of UK Ltd may be better represented in the UK general election debate, business analysts Lindsell Marketing decided to devote one of its regular business opinion surveys to this very question of economic competence amongst the three main parties.  1,011 companies, representing a wide variety of business size brackets, sectors and geographical locations around Britain, were canvassed on a single key question: “Which of the three main political parties do you believe is best placed to give business the kind of intelligent support needed to enable reliable and rapid economic recovery?”  The research took place between 18^th and 25^th April.  Fieldwork was conducted through a combination of online and telephone surveys.

It is hoped that the results of this survey will form an objective data basis to inform the debate over economic competence during the rest of the general election campaign, particularly to policy analysts investigating the most relevant and effective business support strategies in any future government.  Such harmonised policies and co-ordinated government will be critical to creating business health, economic growth and what Digby Jones (now Lord Jones) recently described as “boring stability”[9].

Lindsell Marketing is an independent research organisation and has no political affiliations whatsoever.

Results

The results of the Lindsell Marketing business survey immediately reveal that the Clegg effect has taken as remarkable a hold on the British business community as on the electorate at large.  When the same question was asked back in December 2009, clear water was visible between the Conservatives (43%) and the other two parties, with Labour on 18% and the Liberal Democrats on 17%.  Now, however, the issue of economic competence is starkly revealed as a two horse race –between the Conservatives (30%) and the Liberal Democrats (27%), who are running neck and neck.  Labour, on the other hand, trails on a mere 17%, apparently suffering from the jaded view so often taken of any incumbent government after over a decade in power.

Interestingly, the findings of this business survey show that the residual support for Labour amongst the general electorate is not felt in commerce.  A combination of current consumer opinion polls shows the three main parties all hovering around 30%, but business opinion seems to have discounted Labour.

It may also be significant that 26% of the businesses polled took the view that none of the three main parties was competent to manage and stimulate reliable and rapid economic recovery.  This may leave the issue of economic competence as a space to be occupied with everything to play for.  Should Labour manage to take just a further ten percentage points from this floating business vote, then it would draw level with the other parties.  Either of the front runners could win over this undecided or unconvinced community to establish a clear lead over rivals.  Or, in Scotland and Wales, this business vote could be snapped up by the SNP or Plaid Cymru respectively.

Results by Size Bracket

Respondents answers were also grouped by size bracket.  Four groups were analysed – small businesses (1-49 employees), medium sized businesses (50-249 employees), smaller corporates (250-2499 employees) and larger corporates (2500+ employees).  Peaks of support were observed.  The highest opinion of Conservative economic competence was seen amongst small businesses, whereas for both Labour and the Liberal Democrats, greatest support was seen amongst smaller corporates.

Results by Region

Marked variations were also evident around the different regions of the UK.  Within England, Liberal Democrat support was high in the North East (35%), the East of England (32%) and the South West (32%), but lowest in the Midlands (21%).  The Conservatives showed a surprisingly high level of business good opinion in Wales (42%), with an even higher score in the Midlands (44%) and lowest in the North East (20%).  Labour’s peak of business support in England was in the North East (26%) and lowest in the South West (11%).  Labour’s showing amongst Scottish business was extremely high at 36%.

Conclusions

Reflecting the opinion of the overall electorate, the business community has also experienced a surge of support for the Liberal Democrats, following Nick Clegg’s performance in the recent televised leaders’ debates.

Although the balance of findings from this survey differ substantially between England, Wales and Scotland, the race for business opinion in England appears to be largely a contention between the Conservatives and Liberal Democrats.

As a result of this survey, policy analysts may now wish to spend more time evaluating how the Conservatives and Liberal Democrats might work together to find common ground for economic regeneration initiatives.

About Lindsell Marketing

Lindsell Marketing Limited is a business analysis and marketing consultancy.  Founded in 1994, the company has been researching and investigating business issues for over 15 years in order to provide its clients with important insights into their sectors, markets and business management techniques.  Lindsell Marketing has operations in London, Oxford and Turin.   The company has no political affiliations, and delivers objective insights for its clients.

Methodology

• Online and telephone survey
• 1,011 UK companies
• Respondent profiles: general management, marketing & sales management, financial management, operations management
• Period: 18^th-25^th April 2010
• Representativeness:-
  • Size
    • 1-49 employees                      32%
    • 50-249 employees                  23%
    • 250-2,499 employees             25%
    • 2,500+ employees                   21%
  • Region
    • Scotland                                  9%
    • Wales                                      5%
    • North East                               11%
    • North West                              12%
    • Midlands                                  13%
    • East of England                       9%
    • South West                             11%
    • South East                               31%

• Industry

Representation from:

[2] See particularly, ComRes, Harris, Ipsos-Mori, ICM, Populus, YouGov

[3] Ref. BBC Poll of Polls

[4] Office of National Statistics, UK Government Debt & Deficit, 31 March 2010

[5] James Carville, Bill Clinton’s political strategist in the 1992 election, placed a sign over his desk in the Little Rock headquarters: ‘It’s the economy, Stupid!’

[6] British Chambers of Commerce, Growing business unease over prospect of a hung parliament, 26^th April 2010

[7] The Daily Telegraph, Business leaders give guarded approval to Tory manifesto, 22 April 2010

[8] Panel reception ‘Women in Public Policy’ chaired by Baroness Symons in the House of Lords, Tuesday 20^th April

[9] BBC Radio 4, The Today Programme, 24^th April 2010

(London, Tuesday 27^th April 2010) New research amongst British business about the economic competence of the three main political parties has revealed evidence of the Clegg Effect in the country’s commercial community.  The new survey, conducted by business analysts Lindsell Marketing, shows British firms believe the Conservatives and Liberal Democrats on a par for economic competence, but Labour trails far behind.

Over 1,000 firms responded to the Lindsell Marketing survey, which ended on 25^th April.  They were asked, “Which of the three main political parties do you believe is best placed to give business the kind of intelligent support needed to enable reliable and rapid economic recovery?”  The Conservatives came out on top with 30% of the business vote, closely followed by the Liberal Democrats on 27%.  However, only 17% of businesses thought Labour the most capable party to bring the country back into strong economic growth.  This marks a fundamental change in business opinion, which in December 2009 put the Conservatives firmly in the lead on the question of economic competence.

Within the UK, there were country differences.  Scots businesses put Labour in the lead, whereas Welsh businesses put the Tories top.  Peaks of business support for the LibDems were seen in the North East (35%), the South West (32%) and the East of England (32%).  Conservative strongholds were seen in the Midlands (44%) and the South East (34%).   Small businesses (1-49 employees) strongly favoured the Tories, whereas smaller corporates (250-2,499 employees) came out in favour of the Liberal Democrats.

Paul Lindsell, Managing Director of Lindsell Marketing, comments, “Pre election polling naturally concentrates on the full electorate.  Yet this time round, we face a £159bn government deficit – the size which doubled between 2006 and 2008, then doubled again in a single year into 2009.  The folk who are going to generate the economic growth which reverses this appallling situation are the country’s business people.  Not only should their collective voice therefore be heard, but the electorate will also be critically interested in their expert opinion on which party they feel most competent to get the country back in the black.

“Given the results of our business poll, which so definitively places the Tories and LibDems neck and neck in front, policy analysts and advisors in both leading parties should be working even harder to find the common policy ground which would provide the basis for a viable five year plan to balance the nation’s books.”

– Ends –

For a copy of the full report please call 020 7402 0510 or email us at feedback@lindsellmarketing.com.

Survey Methodology

• Online and telephone survey
• 1,011 UK companies
• Respondent profiles: general management, marketing & sales management, financial management, operations management

• Period: 18^th-25^th April 2010
• Representation by: business size bracket; region; sector.