NORTH EAST: Leaders must work together
Ross Smith, Director of Policy, NECC said: “It was generally expected that the next few days would bring uncertainty for UK businesses and with uncertainty brings a decrease in business confidence and economic growth.
“With that in mind, we are pleased there has been a decisive victory and offer our congratulations to the new Government.
“Nevertheless, the Prime Minister must deliver on some potentially contentious decisions with a small majority.
“Although we welcome the Conservative Party’s pro-business measures and their commitment to investment in infrastructure, concerns remain around their approach to housing, energy and most notably the EU.
“Devolution to the North East also remains a significant issue. The result in Scotland will absolutely raise questions over the constitution and it is vital that the North East does not lose its voice.
“In the interest of regional economy the Conservative government and Labour leaders in local areas must work together.”
WEST MIDLANDS: Businesses urge region to create powerhouse
Business leaders in Birmingham urged the new Conservative government to work urgently to promote growth and confidence in the West Midlands.
Greater Birmingham Chambers of Commerce (GBC) also pressed the region to push ahead to create a combined authority after clear signals from the now-defunct Coalition that they regarded this as the way forward.
President Greg Lowson (pictured) said: “As the largest party, the Conservative Party has an opportunity to form the next Government. As it makes the case to do so, the Conservatives must demonstrate how it will support British business and help us to deliver wider prosperity.
“Support for investment, infrastructure, apprenticeships and exports would promote business confidence and growth, whereas more regulation, tax increases, and uncertainty over the nation’s finances would hit jobs, wages and prosperity.
"In particular, we need to see the Conservative Party set out clearly how it will eliminate the budget deficit, improve Britain's infrastructure, including an unequivocal commitment to support airport expansion, and understand how it will deliver a new settlement for Britain in Europe.
“It is also imperative that business contributes to winning the heart and minds of the wide region to create a combined authority that will spearhead the creation of a West Midlands Powerhouse.”
Mazars partner Ian Holder said that, setting aside political preferences, a clear result was good news for business.
“Business confidence has been on a shaky footing because while we knew from 2010 that there would be a General Election in May 2015 what nobody could predict was the result.
“This led to a lack of confidence to commit to investment, to new spending and to new markets in many cases in the Midlands,” he said.
“Midlands businesses can now plan their growth strategy with a clear focus, uncluttered by the uncertainty and affect on confidence that the run up to the election has unsurprisingly caused.
“Planning for growth is critical and businesses should ensure they are absolutely clear on what they want to achieve and, more importantly, how it is to be funded,” he said.
SCOTLAND: We must use this result to drive jobs and growth
The CBI commented on the Scottish National Party’s performance in the General Election. John Cridland, CBI Director-General, said: “The general election result in Scotland has been decisive. Firms will be looking forward to working with the SNP to drive the jobs and growth we all want to see across the nation.
“Nicola Sturgeon has made clear that this election was not about independence or another referendum, which business will be heartened to hear. Firms will now be looking for the devolution proposals, which were agreed by all parties in the draft Scotland Bill, to be in the Queen’s Speech.”
Hugh Aitken, CBI Scotland Director, said: “Businesses will want to see the SNP keep its focus on policies that help make Scotland more competitive, like building more new homes, keeping the UK in a reformed EU and extending the Annual Investment Allowance. Getting the deficit down must be a priority, to maintain the UK's credibility in international markets which will keep the cost of borrowing down for growing Scottish businesses.”
FINANCE: Alan Wilde, Head of Fixed Income at Baring Asset Management: “There is only one poll that matters and that is the election itself. The result is something of a surprise given the pre-election polls had predicted a hung-Parliament. No single party was forecast to emerge with a majority but as the last votes are tallied the Conservative Party will have the chance to govern with what looks like a slim overall majority. As this was not priced in by markets, sterling has rallied sharply overnight up more than 1.5% versus the US dollar and just over 2% from the 5pm close versus the €uro. Gilts will open stronger but in the context of global bond markets rallying after several days in free-fall.
“Longer term, the next worry for investors will be an In-Out Referendum on continued membership of the European Union which PM Cameron has vowed to hold in 2017. It will be interesting to see if the poor showing of UKIP changes the PM’s determination to hold this ballot. If it goes ahead, the business community will bring strong support to both sides during what could be a long and damaging debate but quoted companies would almost certainly want to avoid a divisive Referendum with all the attached risks it would bring to investment and expenditure plans until resolved.”
FINANCE: John Wyn-Evans, Head of Investment Strategy at Investec Wealth & Investment: “The markets’ reaction to the result has been predictably positive, with the pound being the initial beneficiary. Gilt yields have also fallen on the prospect of more austerity and a lower deficit while shares are rising, unsurprisingly led by house builders, domestic retail banks and regulated utilities and outsourcing companies. To put things into perspective, though, that still leaves the index below where it was a week last Tuesday.
“However, without wishing to throw too much cold water on the celebrations, we will return to “business as usual” very shortly, and there is the small matter of a promised referendum on membership of Europe to negotiate. It has long been our opinion that, at the asset class level at least, UK markets will be more affected by global than domestic trends and influences. This has been especially evident in recent days in the bond market, with profit-taking in German Bunds sparking extraordinary moves in all developed market bonds. It is a similar story for global equities, where investors are grappling with the recent moves in currencies and inflation expectations as well as the jump up in bond yields. We don’t envisage this as being worse than a short-term correction, especially with the amount of liquidity being provided by central banks in Europe, Japan and to some extent China. We see further gains ahead for equities, but the summer promises continued volatility.”
PEOPLE: Samantha Hurley, head of External Relations & Compliance at The Association of Professional Staffing Companies (APSCo): “Having engaged extensively with the previous coalition Government, we look forward to working with this new Conservative administration to continue to call for future policy that reflects the diversity of the recruitment sector. In terms of the labour market, we hope that this government will continue to balance the needs of business and the economy in general with the protection of potentially vulnerable workers.
We will specifically be pushing for a new regulatory framework that differentiates highly paid, highly skilled professionals, putting them outside the regulation that has clearly been designed to protect vulnerable workers.
We will also welcome the continuation of the work undertaken in incentivising fair and transparent payment practices, and the removal of contractual barriers, which stop businesses from accessing affordable finance, with the aim of working towards tackling the highly-specific issues within the professional recruitment sector.
We believe that government needs to move away from thinking about traditional permanent employment as the only valid form of engaging staff and should recognise and value the many different types of engagement being utilised in today’s market.
It is also crucial that any labour market strategy acknowledges the major differences within the UK recruitment sector. Access to highly skilled, professional talent, supplied in the main through business to business arrangements requires a different legislative programme, to that required for the attainment of low-paid, potentially vulnerable workers.
We would urge the new Government to understand the desire of highly paid, knowledge based professionals to create portfolio careers and indeed protect UK plc’s capability to access the professional talent which is essential to its success.
Obviously the results in Scotland have inexorably changed the political landscape north of the border and it remains to be seen what will happen in the Scottish elections next year."
CIVIL ENGINEERING: Douglas Kell, director of the Civil Engineering Contractors’ Association in the North East: “The last five years have brought a steady push to improve the management of infrastructure through visibility of investment and workloads. This has created long term certainty, allowing for investment in skills, equipment and innovation - reducing delivery costs and saving taxpayers' money too.
“The incoming government should now recognise and fully commit to the importance, in this market, of maintaining long term certainty for the existing project pipeline. We look forward to working with the new government to build on this, and to go on delivering the infrastructure vital to UK needs in economic and social growth."
MANUFACTURING: Liz Mayes, North East Region Director at EEF, the manufacturers’ organisation: “During the campaign we called on party leaders to build on the foundations of growth, with continuity and stability in business policy. That is now what we expect the newly-elected Government to deliver. There is a real opportunity to properly rebalance the economy and ensure a strong focus across government on investing in and building on our industrial strength as a manufacturing nation.
“There are many issues to tackle for a new business and industry secretary, which is why we need a really big-hitter in that role. He or she will have an in-tray which will include the need to tackle some of the issues which will help Britain embed and build on the recovery. These include reversing the trade deficit, tackling an energy policy which remains a mess and redoubling efforts to deal with a creaking infrastructure by getting on with important projects, especially building a new airport hub.
“The biggest threat to our long-term economic well-being, however, remains the prospect of leaving the EU. Mr Cameron will be under pressure to call a referendum as soon as possible, possibly bringing it to next year. The new administration must move quickly and campaign on the back of a strong and positive case for Britain’s continued membership. Any drift or dithering will mean uncertainty for British businesses, which would be very unhelpful for the long-term prospects of the economy.”
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