Lib Dems ride high with small business

According to the latest Office World quarterly small business survey, Britain's army of small business voters are defecting to the Lib Dems in the wake of dissatisfaction with the Labour government and the turmoil of another Tory leadership crisis.

Other results of the survey show that small business performance is down across the board and while optimism continues for their own firms, gloom persists about the overall economy. On the IT front, computer viruses are hitting many businesses and additionally fears are growing about new plans to charge road users.

Lib Dems

More than one in five small business owners (22 per cent) now say they would vote Lib Dem in a general election tomorrow - the first time the survey has recorded Lib Dem support breaking the 20 per cent figure. This is up nearly 10 per cent from just 14 per cent in the last survey. Support for the Government dropped from 16 per cent last quarter to just 12 per cent this time as fall out continued from the Iraq war, the Hutton enquiry, dissatisfaction with public services and tax increases.

Michael Howard

According to the survey, the new Tory leader, Michael Howard, will need to improve dramatically on the one third (35 per cent) of this traditional Tory electorate currently supporting his party.

This is down a further one per cent on last time among more than 1000 small business owners who took part in the nationwide survey, commissioned by superstore retailer and carried out by the Small Business Research Centre at Kingston University.

Performance down across the board

Profits increased for only 28 per cent of firms in the survey, down from 34 per cent in the previous quarter. Turnover was also down with only 36 per cent reporting an increase against 42 per cent last time while the number of firms taking on more staff fell from a quarter to just 18 per cent in this survey.

Optimism slows

Some optimism continues with a third of small businesses expecting profits to rise in the next three months. Forty per cent predict their turnover will rise but only 16 per cent expect to add new jobs, down from 23 per cent from the summer. Pessimism persists on the economy as a whole with only five per cent of the sample seeing UK plc to be anything better than stable and 10 per cent believing it to be in recession.

Andy Etherington, chief executive officer (CEO) at Office World said: "Support for the Liberal Democrats may be up by a third but this is probably a very understandable protest vote. Small business owners appear to be fed up with Tory infighting and are also reflecting the national lack of trust that now plagues the Government on so many fronts.

"But the real concern has to be about performance. Statistically, small businesses are 'surviving'. They have a degree of confidence but it's fragile and does not include great faith in the economy.

"The likelihood is that continued consumer spending is driving sales. But we know that much of this is debt based and could rapidly disappear if, as predicted, interest rates start to rise.

"This should be the focus for politicians and policy makers in all parties right now. Small businesses, which account for 90 per cent of UK plc and a third of national output, are depending on them to concentrate on maintaining a secure and stable trading environment."

Computer virus hits small firms

Forty-four per cent of all small firms including one person businesses had a website and half of these were actually selling on line. Nearly all bigger firms - 97 per cent - had a web presence.

However, when asked about their experiences with IT, nearly 40 per cent of small businesses said they had been infected by a computer virus. This increased to over 60 per cent amongst the larger companies employing 50-250 staff.

Road charging unpopular

Small business opinion is generally against the idea of road charging. However, there were some interesting results on some of the options being considered such as tolls on trunk roads and inner city congestion charging - already under way in Central London and some other cities.

Mileage charges attracted most resistance with over 80 per cent of the sample against mileage charges for private cars and 71 per cent against the idea, even for commercial traffic.

Two thirds of the sample were against charging to use specific roads for private cars and over 50 per cent against road toll charges for commercial traffic. However, nearly a third would accept a charge up to £5 for cars though this would drop to only four per cent if the cost rose above £6. Conversely, around 20 per cent would support charging commercial users up to £10 with 13 per cent ready to accept an even higher rate.

On congestion charging while nearly half the sample expected no impact, 37 per cent claimed a congestion charge would harm their business. A mere three per cent of small businesses expect to benefit from congestion charging.

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Is the growing attraction to vote Lib Dem as reported in this survey typical of the freelancer community?