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Institute of Directors wants “decisive” action from David Cameron on the deficit

4 min read

18 May 2015

A survey from the Institute of Directors (IoD) following the May general election has uncovered a desire for swift action on cutting the deficit and improving infrastructure.

A total of 1,211 IoD members took part in the study, and 47 per cent ranked infrastructure as the top priority for the Conservative government.

Members also agreed that bringing down the deficit should be high on the government’s to-do list. Respondents felt the reduction should be achieved mainly through spending cuts rather than tax rises.

After infrastructure, education was considered the second priority – mentioned by 40 per cent of respondents. This was followed by health at 36 per cent.

The IoD’s director general, Simon Walker, said: “Britain needs broadband cables, runways, railways and power, and we are looking to the government to deliver them.”

Prior to the Conservatives’ win, the prime minister had pledged to invest in infrastructure like fast broadband as well as promising to cut red tape. David Cameron picked out particular concerns of small businesses as areas he would address, in a speech to SME leaders in April. He also claimed the Conservatives would increase the number of new businesses from 350,000 in 2013 to 600,000 a year by 2020.

“We are the party of the grafters and the roofers and the retailers and the plumbers. We get them, we understand them, we back them,” Cameron said at the time. 

Last year, Cameron was ribbed by German chancellor over British broadband, as Angela Merkel asked when the roll-out of high-speed broadband to every house would be completed. While Merkel said Germany’s network would be finished by 2018, Cameron said “hundreds of millions of pounds” were currently being invested into the project.

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“Building a modern infrastructure network will help businesses move goods, people, products and services around the world, giving small and medium-sized companies the best chance to succeed, scale up and compete on the global stage,” Walker added.

A recent survey from the Federation of Small Businesses also found that broadband was a concern for SMEs following the election. It was the fifth-most commonly cited key issue to be addressed after regulation, the tax system, business rates and young people’s skills – 39 per cent wanted action implemented.

The majority of business leaders surveyed by the IoD were in support of the government’s fiscal plans – 85 per cent backed the Conservatives’ aim to run a budget a surplus by the end of the parliament.

“Returning the budget to surplus must be the overriding goal in this parliament, but businesses want the emphasis to be on finding further reductions in spending, not significantly raising taxes,” Walker explained.

Elsewhere, nearly nine in ten of the leaders backed the government’s plans to curb tax avoidance, but 15 per cent said they thought the Treasury would actually hit its target of bringing in £5bn from the stricter suppression of tax avoidance.

“The election result was more decisive than most expected, and now is the time for the new government to take decisive action,” Walker said.

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