Will the Con-Lib Coalition Have a Positive Impact on UK Businesses?

63% of Business Owners say Yes!

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May 18, 2010, 09:16 ET

POOLE, England, May 18 /PRNewswire/ -- British Business has suffered over the recent years. Writing as someone who has worked in the creative industry, many agencies have witnessed a cut back in client budgets. Some blame this is on the public sector over spending which has had a negative effect on private sector consumption and investment.

Research indicates that business owners are optimistic about the con-lib coalition and hope that Cameron and Clegg can recover British economy by bringing back financial stability. We asked six business managers and directors to share their views with Zeta about the results of the 2010 General Election. There was a consensus of hope particularly amongst small business owners and entrepreneurs.

An Overview of the Creative Industry

The economic growth of any country comes from the government and the private sector. But let's take a look at the state of the UK creative industries in particular:

Many of us in creative industries have seen a drastic cut back in Private Sector spending; signified by huge cutbacks in client budgets since 2008. This being attributed to huge government spending which has had a negative impact in private sector consumption and investment. When those in management decision making level do not understand the true importance of marketing these divisions are usually the first to see a slash in budget.

Lucky for those of us working in a digital agency, we haven't suffered nearly as much at the hands of the public sector over spend. Rather we have seen an increase in online marketing spend with more companies starting to embrace and understand the value of marketing their business and products online. In fact, 66% of companies are planning on increasing their digital marketing budgets during 2010 (econsultancy, 2010).

Creative SME's have competed for public sector contracts

In attempts to further conserve profits many SME's have turned to the public sector to sustain their business. This has been a difficult strategy for some creative SME's due to the rigid procurement processes which prevent smaller private sector providers from competing for public sector contracts. Read more about public sector organisations using private design companies on the Zeta blog.

A Con-Lib Coalition and hopes for economic recovery

The long awaited outcome of the 2010 UK General Election was finally concluded last week after a long weekend of political confusion, discussion and debate. After thirteen years of under New Labour ruling, signified by Spin, Conspiracies and of course the hated Recession – the British public hopes that an alliance between Tory leader Cameron as PM and Lib Dem's Clegg as deputy will see Britain move into a realm of stability and economic prosperity, with Cameron leading the way to an economic recovery.

The Conservative-Liberal Democrats coalition has left many UK businesses and business owners feeling a lot more optimistic about trade and the future stability of the economy. The proposed cuts to the public sector spend may finally give private sector organisations the fuel to prosper again.

A study of business owners and executives by employment law firm Citation, found that 63% of business owners believe their company would perform better under the new Con-Lib ruling.

But what is the feeling of business owners and directors in creative industries and other private sector organisations? I sought to do a bit of my own research to see if this figure is representative by asking business executives and directors whether they agreed that UK business would perform better under the new ruling.

The general views reflect the 63% figure, and despite the differing political opinions, there is a general consensus of optimism and hope.

Ruth Lopardo, Entrepreneur/Founder of www.loveitloveitloveit.co.uk Online Children's Clothing Store

"My thoughts on the coalition as a business owner are that I'm concerned that the government will be stable enough in the medium term to see the fledgling economic recovery through without tipping the country back in to recession, especially with a Chancellor as inexperienced as George Osborne. The Conservatives are often seen as the party of business, and whilst the Lib Dems are an unknown quantity in Government they may bring a fresh approach. However, the current economic situation will give both the Government and businesses a very rocky ride. The scale of spending cuts proposed by the coalition to cut the budget deficit is also of concern; if lots of customers are losing their jobs or cutting back spending in case they lose their jobs that can only be bad for business. On a personal note, as a children's clothing retailer, I would be very much against the application of normal rate VAT to kids clothes, that would be a disaster for my customers and for my business."

Liz Jackson – MD of Great Guns Marketing www.greatgunsmarketing.co.uk

"I'm very pleased that after much deliberation the Conservatives and Liberal Democrats have finally struck a deal. If they can put their differences aside and work for the common good then I see no reason why it shouldn't be a success. Undoubtedly what we need right now is a government that acts quickly in cutting the deficit, removes the ludicrous 'jobs tax' and believes in public sector growth. Also, I think it is good to see wise political minds such as Vince Cable being drafted into the cabinet as he clearly has a vast array of political and financial knowledge that will help lead the British economy from the brink of bankruptcy towards growth."

Roger Allen, MD of Zeta

"Britain desperately needs a stable government that addresses the issues at hand clearly without the 'spin' and double speak which was synonymous of New Labour. The new Con-Lib coalition will combine Tory realism with liberal policies. Political stability and sound financial management are the foundations that businesses need to prosper."

Hessia Fernandes, Entrepreneur/Founder of www.cooltribe.com - UK Online Green Social network

"The coalition was born more out of need than idealism so I am slightly suspicious of its agenda and its ability to last. But having said that, there is a real opportunity for both parties to make it work. I am at the moment reserving judgment as we haven't yet passed the PR/spin phase. I am genuinely interested to see what happens in the next few weeks. As a small business, my main point of concern is George Osbourne's inexperience at managing projects of this scale, after all the economy is in dire straits and it feels like we've given the little schoolboy the titanic to captain in a sea full of icebergs. For my business to grow I need a growing economy where businesses will invest in online marketing so I just hope that the budget deficit cuts don't put too many people out of work and don't push businesses to be more cautious with their marketing spend."

Commenting on the 13th May 2010, Clive Sexton – Director of leading Global Interim Management Provider – Impact Executives

"49 days to the emergency budget, 4 days to parliament assembling, 11 days to the Queens speech. It is inevitable that there will be significant and major cuts across the public sector, inevitable union strife, in addition there are concerns that there will also be civil unrest also across the UK, this has been building for sometime. Unavoidable higher taxes, VAT going up to 20%. So the private sector just needs to draw a line under it all, look at new markets beyond the UK and Eurozone, where there is growth opportunity and come up with totally new propositions for the UK market and adapt those on a country by country basis and lift itself out very positively of the demise we have been in this past year plus and GO FOR POSITIVE CHANGE AND GROWTH STRATEGIES, which will be driven by INNOVATION."

Jamie Gavin – Founder of Jay –G Media http://www.jaygmedia.com

"I believe the Conservatives are trying to appeal to small businesses by offering normal incentives like waving N.I contributions for the first registered employee etc - which is all well and good, but I worry that if they are unable to live up to expectations and effectively recover the state of the economy there will be no economy left to operate in under con-lib."

What is the future for British Industries?

The facts suggest that business leaders remain hopeful that the new alliance will help British businesses perform better. Clive Sexton's comments highlight that whilst the government is essentially leading the country and dictating budget and spend within the UK economy, the sustainability of individual businesses and organisations will always be determined by the drive and innovation of their individual leaders and employees.

This article was written by Aimee Carmichael. To read the full article visit: http://www.zeta.net/zeta-news/con-lib-coalition-and-uk-business.html

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