Who gets the business vote?
With the election less than a week away and the future of the UK economy unclear, what outcome do some of the nation’s top business chiefs want?
The election is an ideal opportunity for the parties to outline a clear vision for the UK’s economic future says Sir Martin Sorrell
Sir Martin Sorrell, chief executive of WPP Group
Now that we are nearing polling day, it is probably a good time to ask why so many large companies have become so disenchanted with the UK.
First, there's clearly the macro point. If you're running a global company, whether public, private or private equity-owned, one of the key factors - if not the key factor - in determining long term share owner value, is topline sales growth.
Why wrestle with a slow growth rate, government-controlled economies and regulatory burdens, when you can push a relatively open door in Brazil, Russia, India and China (the BRICs) or the Next -10 markets (with apologies to Goldman Sachs) - Vietnam, Philippines, Bangladesh, Nigeria, Turkey, Egypt, Indonesia, Mexico, Pakistan, South Korea (excluding Iran, at least for the moment). The energy and urgency and growth potential of these markets is far more attractive, and simply easier, than Western Europe (which includes the UK) for certain - though maybe not the US, given its size and relative homogeneity. Shareowners and employees of global companies are right to expect their managements not to be unduly influenced by their national origins.
The second point is a micro one. Over the last 20 or so years, the UK seems to have lost some of its hard-won competitive advantages. The growth of government regulation and bureaucracy - not only at a UK level, but an EU level too - threatens to stifle corporate flexibility, responsiveness and entrepreneurial vigour. To finance increased government spending and intervention, direct personal taxes have risen (it's not just the case of increased NIC) and will rise more and effective corporation tax rates will rise, or at least become less competitive relatively. Capital and labour are far more mobile today than they were 20 years ago and slower growth nations are competing heavily to be the focal point for big business, as well as small business and a home for technological development.
Britain has a phenomenal geographic and timezone advantage as well as language and cross-cultural competitive positives, not only for financial services but in other sectors too, such as the creative industry.
The election is an ideal opportunity for either of the two main parties to outline a clear vision for Britain in a future where Asia, Latin America, Africa, the Middle East and Central and Eastern Europe will become more and more powerful, and the US and Western Europe less so.
This vision has to be based on infrastructure, technology, education and a stimulus for enterprise - not drowning companies and individuals in bureaucracy and red tape and increased taxation.
Danny Seal, chief executive British-Israel Chamber of Commerce
The strong business relationship between the UK and Israel continues to grow. I am confident in the commitment of both major parties to increasing bilateral trade.
Israel and the UK are actively encouraging bilateral business partnerships, especially regarding technology ventures.
The next government must be committed to encouraging entrepreneurship, the free market and it should be against excessive regulation.
It is businesses and entrepreneurs, as opposed to state dependency, that will improve our economy.
Public sector spending must be reformed without cutting front line services, for example increasing efficiency through cutting back office expenditure.
Ros Altmann, former Government pensions adviser
The election campaign has hardly touched on one of the biggest challenges for the next government - the pensions crisis. The UK pension system used to be the envy of the rest of the world. People believed in saving for their future.
But excessive borrowing, draconian regulation and various scandals have undermined confidence in long-term savings.
Savers, pensioners and pension schemes have all been hit hard by the record low interest rates which baled out banks and borrowers. Private pensions are paying far less than expected and a pathetically low state pension leaves millions in poverty, needing means-tested benefits which penalise private pensions.
Deficits in both private and public sector pension schemes are a potential time-bomb that could derail economic recovery, as millions of baby-boomers head for retirement. Voters want to know what the next government would do to help.
All three main parties will improve the basic state pension, increase state pension age and force employers to automatically enrol their workers into pension schemes, with compulsory employer contributions if the employee pays in as well. The Tories propose restoring tax benefits for pension fund dividends (removed in 1997, resulting in a loss of over £100billion to pension schemes) and the LibDems would end higher rate pension tax relief. I don't think these policies will solve the pensions crisis. Much more is required.
Pensions policy lasts way beyond the life of any government, which may be why politicians have made such a mess of it. We should take the politics out of pensions. I think we need an independent, non-political body in charge of retirement policy provision, providing better ways to encourage long-term savings, assessing public and private sector pension arrangements and securing more investment to finance the massive debts in our economy. We need a fair, decent basic pension, without means-testing, which people can then safely top-up with private savings over their lifetime, and a more flexible pension approach.
Will we get this? There have been a few hopeful signs, but let's see after the election!
Ian Livingston, chief executive of BT Group
1. Policies that help make the UK a great place for companies to invest
2. Recognition that good public services are dependent on efficiency improvements not vastly more expenditure. This is what the private sector has had to do year after year.
3. A focussed programme to reduce public sector borrowing
4. Try to keep things simple for business - there are too many rules, initiatives and interventions. Simplicity and some longer term consistency will help all companies plan.
Nick Leslau, Chairman and Chief Executive of Prestbury, Investment Holdings Limited and co-founder of Max Property
Many perceive that property, in conjunction with banking, brought the country to its knees. This is a myth conveniently perpetrated by a government which negligently failed to regulate our own financial system.
Independent regulators were evidently doing little whilst this government was lapping up the benefits of all these tax receipts never stopping to wonder when the gravy train might end. We all binged on the credit boom but the government has brilliantly side stepped responsibility.
Property will revive itself as it always does but it has always been easy pickings for taxation. Forget that there would be no regeneration, shopping centres, leisure parks, office buildings without developers and investors; the sad truth is we're not a popular bunch.
There is a clear lack of appreciation that without encouraging and incentivizing entrepreneurial spirit we are lost and none of our potential leaders give more than just lip service to wealth creation. Investment will get us back on our feet but only if government recognise the value of promoting it as virtue. Sixty per cent of employment in this country is accounted for by SMEs yet they are barely mentioned.
The Conservatives didn't introduce taper relief for qualifying businesses but a socialist government and it was inspired but they dropped it. It recognised the value of risk capital, time, investment and wealth creation.
If you want to challenge short-termism, tax less the longer an investment is held. Through longer term investment you have the chance create prosperity for everyone.
Politicians have missed a trick. Put people to work, take them out of the permanent unemployment and incentivise investors to go out there and risk more capital and create wealth which makes society more prosperous and able to support those that need it.
We can't afford to run UK PLC because we have too many housekeepers and too few able to pay them and to keep the lights on.