Ahead of the Spring Budget, 37% of UK SMEs believe the Labour Party best serves the interests of businesses, according to new data from SME funder, Bibby Financial Services (BFS).

This compares to over a fifth (22%) that believe the Conservatives are the party for business, down from 26% in the autumn.

BFS’s SME Confidence Tracker data suggest a gradual creep to the left of the political spectrum, compared to Autumn 2023, when 33% of SMEs said Labour most closely represented them.

Findings are released as green shoots emerge for the UK economy with a marked increase in SME confidence compared with a year ago. 61% predict an increase in sales over the coming months, compared to 54% that expected growth in Q1 2023.

The survey of 1,000 UK SMEs uncovered an overall dissatisfaction with all UK political parties, with one in five (20%) unable to identify a favoured political party.

When asked about measures and reforms they’d like to see from the next government, 61% of SMEs called for further tax incentives (e.g. reduced corporation tax, business rates).

Jonathan Andrew (pictured), CEO of Bibby Financial Services, said: “There’s little doubt small businesses are more optimistic today than they were at the start of 2023. News that the UK avoided a deep recession is a further shot in the arm for business owners who we know are keen to kick-start growth after what has been a turbulent few years.

“But it’s clear policies announced in the autumn, such as freezing business rates and late payment reforms, haven’t done enough for the Conservative Party to win over the SME population just yet.

“Our SMEs are ambitious and resourceful, so with a general election on the horizon, the Government should use the Spring Budget to inspire the UK’s SME community and present a convincing vision for growth.”