Business reacts to May’s election announcement

By Bondegezou (Own work) [CC BY-SA 4.0 (http://creativecommons.org/licenses/by-sa/4.0)], via Wikimedia Commons

MPs in the House of Commons will be asked today to vote in favour of a snap General Election on 8th June. Under the Fixed Term Parliament Act, it will take a two-thirds majority to make the election possible.

Theresa May has said that her U-turn form her previous position that she wouldn’t call an early General Election was intended to prevent the uncertainty of an election in 2020 interfering with crucial stages of Brexit negotiations.

Scott Knowles, chief executive at East Midlands Chamber, said: “As a general rule, business doesn’t like elections because they create instability, and this one appears to be creating uncertainty in already uncertain times.

“It could be damaging to the UK economy at a time when business had appeared to have conquered the initial fears over Brexit and coped with the fall in the value of Sterling resulting from the ‘Leave’ vote. Our latest Quarterly Economic Survey has shown that business has been doing better since the EU Referendum than anyone predicted.

“What is really important now is that all Parties clearly articulate what they stand for, without any of the bombast or rhetoric of recent ballots, and to show they are considering much more than just Brexit. There are a multitude of domestic issues that need to be managed and we would call on all candidates to make clear to business what their plans are for strengthening the economy now, during Brexit negotiations and post-Brexit”.

Despite the Chamber’s misgivings, several businesses have reacted positively to the announcement. Duncan Green, managing partner at property consultancy Pick Everard, said: “The election in June needs to give the government the authority and mandate to deal with Brexit effectively, delivering an outcome that gives clarity and certainty to all those investing in a new independent UK economy, including the property and construction industries.

“Securing four years to manage the process – with an elected leader chosen by the British public – puts us in the best position. I believe that an early election is a good decision, giving us the right timescales to get what the country needs out of a Brexit deal. This longer period of time will enable confidence in the property and construction industries in terms of investment – both from within the UK and internationally – which can only be a good thing”.

Chris Frostwick, partner and practice leader of Grant Thornton’s Leicester office, meanwhile, believes that a long-term plan for the UK economy will be the key to electoral success.

He said: “The call for a general election comes at a critical juncture as the UK starts to redefine and renegotiate its place in the world post the EU referendum and triggering of Article 50.

“Manifestos are no doubt being drafted, and we expect to see these soon. We would hope that each party will address some fundamental outcomes that government must deliver on to help build a vibrant and sustainable UK economy”.

He added: “We need a vision for Britain that is clear on the contribution we can make to the global economy, not just what we can take from it. We have world leading industry expertise in a host of areas, not least fintech, services and creative industries. A long-term plan setting out government support for UK and international growth is key to securing future success for the UK.

“Additionally, businesses and public services see addressing the huge talent deficit they are facing as needing priority attention. The development of a focused programme to help UK business develop and access the talent it needs for current delivery and future growth is critical”.