A survey of IoD members has found that uncertainty following the unexpected general election result has caused confidence in business to plunge
A recent Policy Voice snap poll found that IoD members’ confidence in the UK economy has fallen after the unexpected result of last week’s general election, with 57 per cent either quite or very pessimistic about the UK economy over the next 12 months, compared with 37 per cent in May.
Furthermore, a total of 92 per cent of IoD members believe the uncertainty over the make-up of government is of slight or significant concern for the UK economy, while 76 per cent believe political uncertainty is either a significant or slight concern for their organisation.
“It is hard to overstate what a dramatic impact the current political uncertainty is having on business leaders, and the consequences could – if not addressed immediately – be disastrous for the UK economy,” said Stephen Martin, director general of the IoD. “The needs of business and discussion of the economy were largely absent from the campaign, but this crash in confidence shows how urgently that must change in the new government.
“Business leaders will be acutely aware that parliaments without majorities are more prone to politicking and point-scoring than most. If we do indeed see a minority government, both sides of the aisle must swallow their pride and work on a cross-party basis on the most important issues. The last thing business leaders need is a parliament in paralysis, and the consequences for British businesses and for the UK as an investment destination would be severe.
“Saying this, there is also little appetite for a further election this year, and indeed business leaders are keener to see the new government get to work in Brussels and on the domestic front. Ensuring negotiations start well, and delivering higher quality skills and infrastructure across the country, must be the priority.”
Andy Silvester, the IoD’s head of campaigns and deputy director of policy, told the BBC he expects to see more flexibility and pragmatism around the Brexit negotiations. “To succeed, the UK needs to build the best partnership seen anywhere in the world between its business and the new government, not just on Brexit but on other issues fundamental to the foundations of our economy,” he said.
When asked to choose three areas of Brexit negotiations that should be prioritised by the new government, more than half of IoD members chose agreement on rights entitlements for EU citizens in the UK and vice versa. In joint second, negotiating an early agreement on transitional arrangements and securing “zero for zero” tariffs were both chosen by 38 per cent of business leaders.
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