Small businesses’ confidence in Theresa May collapses

Britain’s small businesses are increasingly disillusioned with the Government, fearing that Theresa May’s administration has lost sight of their interests.

The appearance of incompetence or indifference is feeding into companies’ perception of the Government’s performance elsewhere, too – a growing proportion are worried about Brexit. Firms which were not worried about leaving the EU at the time of the Article 50 announcement are now increasingly concerned.

The Daily Telegraph Business Tracker has found that small businesses are voicing their concern increasingly vocally, and sentiment among the firms is deteriorating.

The Tracker, which is compiled by Impact Social, follows companies and businesspeople online to monitor their social media postings, and shows large volumes of complaints about the economic outlook.

When the Tracker first launched five months ago, companies had a positive view of the future.

In February 42 per cent of businesses appeared to feel positive while just 7 per cent were downbeat, leaving a net balance of 35 per cent.

By March – around the time of the bungled Budget with its national insurance U-turn for the self-employed – the overall view was more balanced, with almost equal proportions of businesses posting negative and positive statements online.

Since then the picture has deteriorated. Now, just 9 per cent are upbeat while 35 per cent are negative, dragging the overall sentiment indicator to minus 26 per cent.

“It wasn’t just Brexit which was driving negativity. It was compounded by a bad Spring budget, the disastrous manifesto and then a strong negative reaction from business to the snap election (all of which was analysed / reported from the Tracker). That’s more than enough red flags to warn a government that a change of direction was needed, yet they continued to ignore businesses as a bleak picture emerged,” said Phil Snape at Impact Social.

“It is clear from the Business Tracker analysis that business demands aren’t being addressed and that the business community is bereft of incentives or understanding from the political leadership.”

The negative sentiment has leaked through into perceptions of the Government’s preparations for Brexit negotiations.

In February, just 16 per cent of negative online chatter related to Brexit. Bigger perceived problems included business rates, rising inflation and red tape.

Now the proportion fearing the Brexit talks has risen to 64pc with businesses now afraid that the Prime Minister has no clear negotiating plans.

In contrast to the pre-election period, there is now “utter confusion over the forms of Brexit being discussed with no alignment from what’s left of the UK’s political leadership,” said Mr Snape, and “very little trust in May to carry out the negotiations effectively”.

Mr Snape said there are clear questions emerging from the business community which the Government needs to answer if it is to regain the support from companies which Conservatives have traditionally enjoyed.

“The writing has been on the wall for months. For a Tory Government this shows a baffling blind spot,” he said.

“Will government listen now? Is the new ‘contrite’ leadership prepared to open its ears to the business community and get the country moving again? Who in the Government has got the mandate to put business back on the top of the agenda? We are in real danger of losing sight of our priorities without it.”

On Brexit in particular it will be important to show beyond doubt that companies’ worries are being heard.

“Talk of a consensual Brexit was picked up on with a rallying cry that business must speak truth to power and demand a seat at the table in the negotiations,” said Mr Snape.