Dis-May for Theresa as election gamble backfires

Shropshire's business community has been reacting to the shock overnight news that the UK is facing another hung parliament.

Theresa May's gamble to try to secure a larger majority for her Brexit discussions backfired, and calls are mounting for her to step down. But Mrs May has been given permission by the Queen to form a new Government, backed up by the support of the DUP MPs in Northern Ireland.

Stuart Rea, head of the corporate team at FBC Manby Bowdler in Shropshire, said: “A hung parliament, whilst not catastrophic, will not be welcome news for many companies. 

"Those that I have spoken with recently are primarily focused on getting on with running and growing their businesses and, simply, a hung parliament brings with it a certain level of continued uncertainty that could affect this.

“Added to this, is the impact that a hung parliament could have on the Brexit negotiations. Those who last year voted to remain within the EU will view the General Election outcome as a vote of no-confidence in a hard Brexit and, therefore, undermine the Conservative plans.  This again would create uncertainty and lead to a dip in overall business confidence.”

Richard Sheehan, chief executive of Shropshire Chamber of Commerce, echoed the view of the British Chambers of Commerce.

"After two long years of elections, referenda and wider uncertainty, many businesses were doing their best to ignore the noise of politics – up until today," said director general Dr Adam Marshall

"The electorate's split decision generates further uncertainty for business communities, who are already grappling with currency fluctuations, rising costs, and the potential impacts of Brexit. 

“The formation of a workable administration that can give voters and businesses confidence around economic management must be the immediate priority.

“Whilst companies have for many months done their best to screen out political noise in order to focus on their own operations, this result will prove much harder for UK businesses to ignore. The swift formation of a functioning government is essential to business confidence and our wider economic prospects. 

"Businesses are adept at forming alliances and coalitions when important interests are at stake. We should expect the same of our politicians." 

On the timetable for Brexit negotiations, which are scheduled to begin in less than a fortnight, Dr Marshall said: “No business would walk into a negotiation without clear objectives, an agreed starting position, and a strong negotiating team. It is hard to see how Brexit negotiations could begin without answers on these important questions.”

Carolyn Fairbairn, CBI Director-General, said: “This is a serious moment for the UK economy. The priority must be for politicians to get their house in order and form a functioning government, reassure the markets and protect our resilient economy.

“Politicians must act responsibly, putting the interests of the country first and showing the world that the UK remains a safe destination for business. It’s time to put the economy back to the top of the agenda.

“For the next Government, the need and opportunity to deliver an open, competitive and fair post-Brexit economy that works for everyone across all our nations and regions has never been more important.

“This can only be achieved if the next government doesn’t put the brakes on business, remains open to the world and sets out a pro-enterprise vision.

“Firms will support the UK develop our inclusive, innovative and open economy. More than ever, the new Government must work together with business to make the most of the opportunities ahead. Firms can provide the evidence, ideas and solutions from the shop, office and factory floor to secure our future prosperity.”

And what does it all mean for Shropshire retailers? Patrick O'Brien, retail research director at GlobalData, said: "In one sense not much has changed for retail – little in the way of policy will be implemented in the short term while the current mess is somehow cleared up.

"There was precious little promised from any party for retailers to cheer anyway, just half-hearted promises to review business rates at some unnamed point in the future. The main choice was which party would increase their costs the least with their different levels of minimum wage hikes. Conservatives, Labour and the Lib Dems all signalled that increases in taxes would be on the horizon if they won power, which would have only depressed consumer spending power.

"Little wonder then that this time around, retail business leaders were conspicuous by their silence during the election campaign compared to 2015, when many offered more vocal and partisan support, mostly to the Conservative party.

"While we are none the wiser as to which policies will be implemented over the next five years, we can see that uncertainty is damaging to the economy and retail in the short term."

Brian Berry, chief executive of the Federation of Master Builders, said: “The surprise General Election result has left key business sectors nervous with no one political party securing enough seats to form a majority government. The construction sector is particularly vulnerable to dips in consumer confidence brought about by political uncertainty and therefore it’s crucial that this uncertainty is minimised.

“In the longer term, there could be a potential silver lining for the business community as the prospect of a hard Brexit now seems less likely. Theresa May stood on a hard Brexit platform and she has clearly not been given a mandate to approach the negotiations in this way. Brexit is inevitable but the election result will surely have a significant impact on the shape of the Brexit deal we end up with.”