Business and a hung parliament

Author
James Durie
Director - Bristol Chamber & Initiative | Business West
9th June 2017

With a hung Parliament today - no overall majority for the Conservatives - business will be very concerned about more and more uncertainty and delays in the Brexit process.

When you think that Theresa May had committed us to start the initial Brexit talks in just over a week’s time, the political earthquake that has now erupted must put a big question mark over the whole Brexit negotiation.

Will the opening Brexit talks actually go ahead on Theresa May’s timetable?

Will she even be Prime Minister by the end of today? Or even in a few days? There are already calls this morning for her to resign.

Our Business West Chamber of Commerce & Initiative members have told us in our recent survey how frustrated they are with the lack of information on the ongoing Brexit process.

They will be even more annoyed that our government’s standing will be at rock bottom with the EU now that Theresa May’s credibility has been shattered by the general election result which she totally focussed on Brexit.

Calling a snap election with just eight weeks to give herself a stronger hand in the EU talks was a big gamble which the British people have clearly rejected.

Never underestimate the electorate is an old adage used by experienced politicians and today they have confounded expectations.

For many months now, companies we have talked to in Bristol & the West of England have been doing their best to ignore the “noise” generated by politics in order to focus on their own operations and ensure they retain good relationships with their export customers.

So, what will happen now?

More frustration for these businesses who now face the prospect of those initial Brexit talks being further delayed, because we could well have a Tory Party leadership election on our hands.

If Theresa May does resign, that delay in the talks could be as much as three months, and on top of that she, and in fact no one, will be in charge of the Brexit process.

How can she retain any credibility with the EU, having had her wish for a stronger mandate for Brexit well and truly torpedoed?

For a lot companies in Bristol & the West of England, where the strength of the pound is a big issue to make them more competitive, the lack of urgency created by a hung parliament could well impact on their profitability for quite a period.

The key word here for companies is: confidence.

From day one when David Cameron committed us to an ‘in or out’ referendum, confidence has been the key issue raised with us by business.

In our experience in Bristol & the West of England, few companies have had much confidence in the government’s secretive Brexit process and during the Prime Minister’s election campaign it certainly became no clearer.

And at the heart of the government’s poor showing in the general election was that the British public rejected the Prime Minister’s hard-line focus on getting the best deal for Britain.

It failed with a lacklustre election campaign and most voters did not understand her Brexit argument. They were more interested in domestic matters like the so-called ‘dementia tax’ and the NHS.

By contrast, Jeremy Corbyn and the Labour party ran an old-fashioned people-focused election campaign meeting everyone they could possibly meet.

Despite his unconventional politics and with part of the press against him, his anti-austerity ticket has clearly resonated with the public - particularly young people.

Business has been largely ignored in this election campaign.

That has to change and quickly and whoever now leads the country has to understand that the whole Brexit process will not be successful unless companies are regarded as important passengers on the journey - they must not be left standing on the platform.

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