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UK Needs Higher Corporate Taxes: Business Leaders

A new UK government should make dealing with the budget deficit and cutting spending its main priority immediately after the election, a CNBC survey of 300 business leaders showed Tuesday.

Sharon Lorimer

In the survey, conducted by independent research firm Continental Research between March 24 and March 31 among senior decision makers in UK businesses, 62 percent of respondents said the government should cut spending and deal with the budget gap right after the vote.

About 38 percent said the government should first wait for the economy to be stabilized and then act.

The government should hike corporate tax rather than increase National Insurance contributions as a means to raise money, according to the results of the survey.

Asked to choose one or more options for boosting revenues to the Treasury, 38 percent of the answers went to increasing corporate tax, 36 percent to boosting the Value Added Tax, 29 percent to rising income tax, while only 8 percent opted for hiking National Insurance.

The ruling Labour party plans to increase National Insurance contributions by 1 percent from April 2011 but the opposition Conservatives have criticized the move, saying it is "a tax on jobs."

Asked who would make the best chancellor in the next government, Conservative George Osborne was supported by 31 percent of respondents, while senior Tory politician Ken Clarke was second with 25 percent of the votes.

Liberal Democrat shadow chancellor Vince Cable came in third with 20 percent of the votes, followed by Alistair Darling with 19 percent of business leaders' votes. UK Secretary of State for Schools Ed Balls got 4 percent of the votes.

Asked which leader had the best understanding of protecting and promoting businesses, 64 percent of respondents said Tories leader David Cameron, while 24 percent said Labour's current Prime Minister Gordon Brown.

Liberal Democrat Nick Clegg came in third, with 9 percent of the vote, followed by Green Party leader Caroline Lucas with 3 percent.

Full Results of the Survey:

What Policies Should a New Government Pursue?

Cutting spending, dealing with deficit immediately after election 62%
Wait until the economy is stabilized, then act 38%

How Should the Next Government Raise Money?

Increasing corporate tax 38%
Increasing VAT 36%
Increasing income tax 29%
Other 23%
Increasing national insurance 8%

Who Would Make the Best Chancellor in the Next Government?

David Osborne 31%
Ken Clarke 25%
Vince Cable 20%
Alistair Darling 19%
Ed Balls 4%

Who Is Best to Promote and Protect the Business Climate?

David Cameron 64%
Gordon Brown 24%
Nick Clegg 9%
Caroline Lucas 3%