General Election 2017: Business community across Yorkshire reacts to hung parliament result
As the votes of the 2017 General Election were unveiled, many were left shocked to find out that Theresa May and the Conservative Party have lost their Commons majority following a short, seven-week-long campaign.
Britain now has a hung Parliament. Obviously, this result isn’t what the Prime Minister, as well as the majority of other political leaders, predicted when she announced the ‘snap’ election back in April.
With the country reeling into more political uncertainty, and as the fallout from the 2017 Election continues, Bdaily will be bringing you the immediate views and reaction from across the Yorkshire business community.
Richard Wright, executive director, Sheffield Chamber of Commerce
Yet again the vote has thrown up a massively surprising result that raises even more uncertainty in the country and particularly for business.
In effect, we can tear up the party manifestos - if we ever believed they would enact them anyway - and try to understand what a hung parliament, with potentially a new leader, could mean for us going forward.
The Conservatives are the only party who can realistically form a government and we must assume they will do so. It probably means a less tight spending strategy than they might have followed. It almost certainly means a less hard approach to the Brexit negotiations but business is faced with yet more unknown, and that is probably the worst environment to operate in.
The fundamentals are still there though. The country is operating at a loss. We need to broaden our markets much wider than Europe. This is still the Asian century. Sustainable businesses are efficient, they invest and satisfy their customers now and in the future.
Government can influence the environment we operate in but they cannot do it for us. Never has it been more important to develop new markets abroad and Chambers will always stay at the forefront of helping real businesses on the ground achieve that.
James Roberts, Chief Economist of property consultancy Knight Frank
While it is easy to assume the certainty of a clear majority government would have been the best outcome for the economy, actually this result has several positive points.
Firstly, the government will probably need the support of several other parties, not just the DUP, to get any future Brexit deal through Parliament, in order to off-set any Tory backbench rebellions.
Consequently, the pendulum has swung against Hard Brexit, as a compromise deal will have the best chance of commanding broad support in the House of Commons.
Also, on a day-to-day basis the next government will be restricted to putting consensual, not controversial, policies through Parliament.
This probably rules out any more populist taxes on property, or increases in business regulation. Finally, the swing against the SNP could mean that the idea of second Scottish independence is now quietly booted into the long grass.
In light of the current momentum in the investment market and relative attractions of the UK, plus the likelihood of weakening currency, we do not expect this result to have a negative impact on overseas investment to the United Kingdom and believe that occupational markets will remain resilient.
Lucy Gordon, a Leeds-based solicitor at esphr
If there’s anything recent election outcomes have taught us, it’s that anything can happen. The country has woken up to a hung parliament, which spells even more uncertainty for businesses as we enter into Brexit negotiations.
So, whilst the parties jostle to try to form a government, what could we expect for employment law?
Both parties are promising to guarantee existing workers’ rights throughout the Brexit process and offer enhancements, but the Tories’ are limited.
If they are able to form a coalition, they propose to better protect gig economy workers, increase employee representation on company boards and simplify the tax system for the self-employed, while Labour, if able to run a minority government, would try to effect more radical proposals that all workers would have equivalent rights to employees from day one.
Additionally, they would seek to ban zero-hours contracts and unpaid internships, remove the cap on public sector pay increases, crack down on NMW evasion and abolish Employment tribunal fees.
Along with enhanced workers’ rights, the parties have postulated that they will tackle workplace inequality. While both have proposed to improve gender pay gap reporting, the Tories are also calling for ethnic minority pay gap reporting to become mandatory.
Better deals for families are being promised by both, with Labour proposing significant increases in free and subsidised childcare on the one hand, and the Tories encouraging employers to consider more flexible working options on the other. Both are claiming these policy enhancements will get more women into senior, higher paid jobs.
The Tories have additionally planned NICs incentives for companies taking on long-term unemployed workers and those with medical conditions or previous convictions, and have made tackling our current skills shortage a priority.
They plan to do so by reforming tertiary education and increasing the number of apprenticeships, while Labour have chosen instead to focus on strengthening Trade Unions to bestow more power upon workers.
In the meantime, uncertainty prevails, and we’re playing a waiting game once more. If the Conservatives do succeed in forming a government, we’ll be interested to see how they put their plans around immigration and addressing skills shortages into action – and whether May manages to hang onto her leadership.
Rashmi Dubé, founding director of legal firm, Legatus Law
Businesses will be nervous of what lies ahead in the coming days following no overall party winning a majority.
The next few years will be crucial for the future of this country with discussions over our ongoing and longer-term trading relationship with Europe and the rest of the world.
These negotiations will not be easy but they do give the opportunity to assert our position on the global stage and promote everything that is good about UK plc.
That is why it is important we get the right team in place to do that job. Whoever forms the next Government will have to have that as their priority.
I also hope the new Government does more listening to the views of business, particularly SMEs to ensure they are fairly represented.
This has not always happened in the past but we will need small and medium sized businesses to be the engine of growth, particularly at a regional level, in the years ahead.
Dan Fell, CEO Doncaster Chamber
This has been an extraordinary election and the final outcome is far from clear. What is important now to businesses and the wider electorate is the formation of a stable administration.
The purpose of this election was to secure the Brexit mandate. We are now left with under two weeks until the start of Brexit negotiations with a hung parliament, no clear objectives and no strong leadership.
Clearly this will be of great concern for businesses, who are heavily invested in the outcome of Brexit, and the impact any deal will inevitably have on their business and their wider operating environment.
However, this is not just about Brexit. Despite the fantastic growth that has been achieved in places like Doncaster in recent years, businesses and communities feel held back by national government due to a lack of investment and indecision in crucial areas such as infrastructure and education.
A recent example of this, that matters greatly to the Doncaster business community, are the long delays that have beset Doncaster’s bid to open a University Technical College; indeed, the opening date for that institution has now slipped to 2019 from 2018 due to Government delays.
The further uncertainty we now face as a result of the general election will inevitably slow down these key decisions even more so, which has a real impact on the here and now for business, the economy, and people.
What will happen next is not yet clear, however the formation of a stable administration is the top priority for business confidence.
Jeff Pearey, head of JLL’s Leeds office
The UK has faced political uncertainty in very recent history and, notwithstanding the dramas that immediately followed the Brexit vote, the UK economy and property market remained very resilient.
The IPD benchmarking index has regained almost all of the losses it sustained in August over the past few months.
Investors in real estate look over the medium to long term. London sees by far the most cross-border investment of any city globally, and the UK is rated by JLL as the most transparent real estate market in the world.
This is a result of liquidity, the history of political stability over the long term and respect for the law, as well as factors such as the strong economic fundamentals, long lease terms and the comprehensive professional and legal framework.
The result suggests that the hard Brexit that many were assuming would now definitely occur looks somewhat less likely. That could be a longer term positive for the UK market.
Sectors with long-term structural support, such as Logistics and Alternatives, will remain strong. If the pound remains weak, Retail and Hotels will benefit – alongside UK manufacturing.
But as before, JLL continues to believe the UK offers significant opportunities for medium and long term investors.
Dan Gill, founder of Leeds-based hospitality and event planner Dine
The uncertainty of the last few weeks continues with no clear mandate given by the electorate to whoever forms the new Government.
The cynical ‘landgrab election’ called by the Conservative Party based on their own self-interest has failed to achieve their claimed objective of ‘stability’, resulting rather in an even more uncertain position for both companies and individuals.
The Government that is formed will have an opportunity to adopt a more honest and constructive agenda in support of our vibrant, economy-boosting sector by providing more transparency over the direction it plans to pursue in relation to Brexit.
The hospitality sector is one of the most dynamic and innovative industries in the UK. It creates more than one in seven new jobs and has grown by more than 7% since 2010 (source: Association of Licensed Multiple Retailers ALMR).
However, the current climate is challenging. The impact of Brexit is already being felt - with an increase in food prices because of the falling pound and uncertainty as to the employment status of employees from EU member states post Brexit.
Despite the sector’s ongoing commitment to upskilling local talent, there is still a massive need for a fluid labour market, including overseas staff, who comprise 11% of the hospitality sector workforce in the UK.
Put simply, without overseas workers the skills gap will simply widen. The government must rapidly commit to the continued right to work for existing employees to end the uncertainty.
As it is, and even in advance of the anticipated constriction of the labour market, we are currently experiencing an increase in wage costs.
This, combined with significant food inflation and following a period of price stagnation over the course of the recession, will mean that businesses are no longer able to absorb these central cost pressures Consumers will experience a significant increase in prices when using hospitality services.
The hospitality sector has the potential to play a major role in driving the country’s economy forward but to do that we need government support and a willingness from our political leaders to be honest about the likely and achievable outcomes of Brexit negotiations.
More to follow…..