Member Article

General Election 2017: North East business reaction

With voting over and much discussion ensuing around the shaping of Britain’s future, we turn to the region’s business community to gather thoughts on a number of pressing issues.

On uncertainty

Ross Smith, director of policy, North East England Chamber of Commerce

“Businesses need certainty and stability. This election has produced neither of these. It is now of the utmost importance that the big decisions crucial to our economic success are not ducked or disregarded in political horse trading

Businesses have barely been considered in the election campaign and issues such as job creation and economic growth are of the utmost importance to people across our region. Any incoming government needs to put this squarely in the centre of its agenda.“

Paul Goldfinch, Founder of Polar Krush

“I expect that the markets will be volatile for the near future as the government is formed and with the pound currently extending losses against both the dollar and euro, hopefully the newly formed government will regroup quickly in order to resume robust Brexit talks in the coming weeks.

I will also be watching closely to see the impact this has on plans to benefit and stabilise UK trade, especially in the North East over the next five years. There have been many positive commitments to supporting the Northern Powerhouse which I hope will still come to fruition, my main priority is a positive outcome for our customers and clients across the UK as well as our business.

It was a close run, closer than I think anyone thought and I think the new government should take into consideration the overwhelming swell in support for Mr. Corbyn and his party, and what that means in terms of public opinion, as they are developing their policies moving forward.“

On the North and the North East

Nigel Mills, Chairman of the Entrepreneurs’ Forum

“It’s essential that the result and fall-out from the election is not at the detriment of jobs, business and the economy. The new government must not take any risks and must avoid tax rises that put unnecessary pressure on businesses.

Instead, it should implement targeted spending in areas such as the North to support growing companies while backing devolution and the drive of those in the regions to deliver sustainable employment and economic success.

It should also result in the implementation of a deal for devolved powers for the councils North of the Tyne and follow the lead of Tees Valley to have greater control of our own regional destiny.“

Sean Bullick, Chief Executive of Newcastle NE1, the city’s Business Improvement District (BID)

“The politicians elected must form a functioning government, which should prioritise policies that support business and growth in Newcastle and similar cities.

Before the election the Local Government Finance Bill contained powers that would have significantly boosted the economies of England’s regional cities, by allowing Property Owner BIDs.

By ensuring Property Owner BIDs form an early part of its legislative agenda the new administration can unlock millions of pounds to fund improvements across the country, which in turn can add hundreds of millions of pounds to the nation’s economy, like our Alive After Five programme.“

North East entrepreneur and philanthropist Jeremy Middleton

“This result puts economic growth in the North East at risk, unless a stable, pro-business government can be formed soon. In future the North East could be protected by having its own devolved powers over matters that affect the economy, such as taxation, business support and skills.

“Whatever the make-up of the new government it should consider boosting our economy with an increase in regional aid, and the creation of a billion pound North East investment fund to jump-start economic growth.”

On health

NHSA CEO Dr Hakim Yadi OBE

“We need a united government to support and implement industrial strategy and to act swiftly to reassure industry of its commitment to supporting life sciences through an economic strategy for growth.

As a priority to guide the sector the new government should reinstate the post of life sciences minister. The life sciences sector has been hampered on delivering important projects because of a year of uncertainty, post-EU referendum, which has seen a series of policy implementations pushed back with a resultant stifling effect on the economy.

“An impending Brexit, the election of a new prime minister, and a General Election has led to inaction on key policies such as the Caldicott review, impacting our Health North: Connected Health Cities programme, delaying of Industrial Strategy implementation and delayed Science Innovation Audit announcements, which has held back our understanding of the North’s economic potential in life sciences.

Brexit in particular has led to a great deal of uncertainty. Access to European grant funding and the flow of talented students, academics and skilled workers from the EU into UK universities, laboratories and companies are a major concern.

The departure of the European Medicine Authority from the UK post-Brexit will not only lead to job losses ‎but may result in delays in new medicines reaching UK patients.

Political delays are starting to have economic impacts. The UK is at the bottom of the G7 countries in terms of economic growth rate and now we need to deliver on Industrial Strategy.

Swift, decisive action in moving forward Life Sciences policy is needed to make sure life sciences grows as a fundamental asset of the UK’s economy.“

On property

James Roberts, Chief Economist, Knight Frank

“While the knee-jerk reaction to the news of a hung Parliament is likely to be a concern, the direct property investment market will in our view see pricing remain stable. The slower transaction timescale for property, compared to equities or currencies, will allow time for the advantages of a hung Parliament to spread, and shape the market’s thinking.

Currently, the IPD all property capital value index for commercial property has been rising for the last seven months, and is just 1.6% below pre-referendum levels. This shows that the impact of the referendum amounted to a short and shallow correction for property prices.

The General Election is far less of an issue for commercial property than Brexit. Therefore not only do we expect little or no impact on pricing, there should be upside further down the line via the realisation that Hard Brexit is receding as a likelihood and that the weaker pound has made the UK more attractive to overseas investors.

Industrial property has been the best performing commercial real estate sector of late. We continue to see this as a strong prospect, but that recent outperformance will limit the potential upside in the medium to long term.

Office property has perhaps been unfairly tainted by the Brexit issue in the eyes of investors – occupier market statistics have in fact been remarkably steady since the referendum. Therefore we see offices as a good opportunity, particularly Central London offices, where there is a strong tech story in the occupier market.

Retail remains a sector where careful asset selection is necessary, but with pockets of opportunity, while alternative investments like healthcare property and hotels have the advantage of offering stability of income in uncertain times.“

As ever, we want to hear your opinion. Why not share your thoughts in the comments section below?