A snap poll of 700 members of the Institute of Directors found a “dramatic drop” in confidence following the hung parliament. The Institute of Directors conducted the survey….reports Asian Lite News
Members saw no clear way to resolve the political impasse quickly, the IoD said. However, it found there was “no desire” for another election this year.
Going to the polls again before Christmas would have a negative impact on the UK economy, which was already facing global headwinds, the IoD said.
The loss of the Conservatives’ majority in the Commons has led Theresa May to seek the support of MPs from Northern Ireland’s Democratic Unionist Party to govern. The resulting political uncertainty could have disastrous consequences for the UK economy, said Stephen Martin, IoD director-general.
The main priority for the new government should be striking a new trade deal with the European Union, according to the IoD.
The 700 members who responded to its survey wanted a rapid agreement with the European Union on transitional arrangements for Brexit, along with clarity on the status of EU workers in the UK.
“Businesses have shown in the last year that they are resilient to surprise results, but they have now been thrown into political limbo. With crucial Brexit negotiations coming up fast, in addition to the significant domestic challenges we face, the lack of a government with a majority undeniably creates uncertainty,” Martin added.
“The pound has predictably fallen on the news of a hung parliament, but the majority of British business will be waiting to see whether a stable government can be formed in short order.
“If the Conservatives govern as a minority, they must recognise that they have not earned a mandate to implement their manifesto in full. Now is the time to move on from the rhetoric of the election campaign and focus on preparing for Brexit talks. The issues of access to EU markets and the need for skilled workers are still paramount, and Brussels will be keen to get negotiations underway soon.
“But Ministers also cannot take their eye off the ball on important long term issues such as renewing the UK’s infrastructure, making sure our education system keeps up with developing technologies and business models, and our tax system is competitive and reflective of today’s economy. To do this, it will be vital that the voice of business is listened to, in a way that was not always the case in this election.”
“Business leaders will be acutely aware that Parliaments without majorities are more prone to politicking and point-scoring than most. If we do indeed see a minority Government, both sides of the aisle must swallow their pride and work on a cross-party basis on the most important issues. The last thing business leaders need is a Parliament in paralysis, and the consequences for British businesses and for the UK as an investment destination would be severe.”
Meanwhile, companies have been urged to better prepare for a fall in migrant labour following Brexit.
A survey of 500 business leaders by the Resolution Foundation found that almost one in five expected no change to freedom of movement for EU nationals to the UK, while nearly a third believed that the system would be maintained for those with a job offer.
The foundation warned that lower migration, along with a higher minimum wage and a tightening jobs market, could mean the end of cheap labour for many UK firms.
In Theresa May’s cabinet reshuffle, Greg Clarke remains Business Secretary and Philip Hammond stays as Chancellor, while Michael Gove was brought back into the cabinet as Environment Secretary.