General Election - the business reaction

The avoidance of another hung parliament in the general election has received a broadly warm welcome from the business community.

The pound surged to its sharpest growth in a decade as soon as the official exit poll predicted the Conservatives had secured a commanding majority in the general election.

Sterling bounced from $1.3162 to beyond $1.34 - a gain of more than 2% - after the Ipsos Mori survey for Sky News, the BBC and ITV News was published.

The result also prompted a wave of relief in Brussels, as senior EU politicians and officials welcomed the prospect of an end to the indecision and delay in the UK’s approach to the Brexit talks.

Business leaders in Greater Birmingham today congratulated Boris Johnson on his overwhelming General Election victory but warned  that the hard work starts now.

 And Greater Birmingham Chambers of Commerce (GBCC) urged the new government to urgently give a clear understanding on what the country’s trading relationship with Europe will be beyond 2020.

Paul Faulkner, chief executive of the GBCC, called for an end to the “years of uncertainty” caused by the Brexit process.

“We congratulate the Conservatives on securing the largest majority recorded in a General Election for almost twenty years; the people have spoken and the Prime Minister has secured the mandate he so badly desired. But instead of resting on their laurels, the Government will hopefully recognise that the hard work begins now.

“Since the referendum result, feedback from our Quarterly Business Report has regularly highlighted that firms across the region have been hampered by years of uncertainty caused by the Brexit process. With such a decisive majority, we hope that we will see the modicum of stability that businesses need in order to press ahead with informed decision making – particularly when it comes to investing in their people and products.

“The result will give the PM the mandate to push on with implementing his Withdrawal Agreement and initiating Britain’s exit from the European Union. We’ve already seen the response from the city – the value of the pound shot up against the dollar, reaching its highest level in almost 18 months as the markets now expect Mr Johnson to proceed with his plans without opposition.

“However, while the Conservative election strategy rested on the generic slogan of ‘getting Brexit done’, the process is only just beginning and if anything, businesses will still be desperate for a clear understanding on what our long-term trading relationship with our European counterparts will entail beyond 2020.

“In particular, for those firms that are still unsure on how to navigate this tortuous process, I would encourage all businesses to make use of the Chamber’s Brexit Health Check – this free online tool will help businesses understand the areas of their output that are likely to be impacted by Brexit and the steps that can be taken to overcome these potential issues.

“Beyond Brexit, the Conservatives also made a number of bold claims around upskilling the workforce, investing in infrastructure and reducing the stifling cost pressures that firms across the country face on a daily basis.

“In light of the result, we would urge the Prime Minister to release the recommendations made by Douglas Oakervee and back HS2 in full – no other project comes close in its ability to rebalance the economy and bring prosperity to all corners of the UK.

“We will partner with the British Chambers of Commerce to hold the Government to account and press this administration to genuinely create a platform that will strengthen the foundations of the domestic economy.

“From a local perspective, we will be contacting all of the MPs in our region to share our General Election manifesto and work closely with them to formulate a plan around how we can make Greater Birmingham the best possible place to do business and continue to attract investment and talent from all over the globe.

“Having lived through such a turbulent period in history, we can only hope the incoming Government plots a course which will repair the deep divisions in our society and exercises its mandate in an adroit and inclusive fashion – if anything, the future health and prosperity of this great nation depends upon it.”

Michael Stone, founder and CEO of new homes specialist Stone Real Estate, said the Conservative majority would bring political certainty, at last - something the market has been crying out for pretty much since the referendum itself.

“We’ve seen home sellers, developers and home buyers sit tight for quite some time now and while many have continued to transact, this overarching ‘wait and see approach’ has created a huge coiled spring of anticipation.

“A Conservative majority sees these shackles removed and we can expect a market bounce from the get-go in 2020, not only where housing supply is concerned, but with a notable increase in buyer demand levels as well.

“Opening the flood gates of buyer demand will spur an almost instant uplift in the rate of house price growth, returning to ‘normal territory’ of around a 5% increase per annum.

“Given the recent performance of the government in new house building terms, with some 241,000 delivered so far in 2019, we can expect that supply will also remain buoyant should also have a positive impact on social housing given that it is linked by way of S106 agreements.”

Nick Woodward, founder and CEO of ETZ Payments, said: "Flexible working has been a major topic of conversation surrounding this election because of the increased popularity of freelancing. With the predicted Conservative win, the first thing the new government must do is look at the implications of IR35 on the self-employed population to give them greater security in seeking more freedom in their profession. At ETZ, we will be ready to provide that support for those seeking to take advantage of their productivity through freelance work.

Rob Stross, CMO of P2P travel money provider, commented: “The consensus from the FX community is that the pound will gain in value, meaning holidaymakers will get more foreign currency per pound than yesterday. However, Brexit is still looming and has caused huge fluctuations in value, so holidaymakers should look at planning ahead to get the best deal rather than wait until the day before they travel.”

Dr Roger Gewolb, Executive Chairman and Founder of fair loan comparison website FairMoney.com, said: “This election  - held at one of the most costly time for consumers - has been a real disruption to the 10.5 million Brits who are worse off now than when the Brexit referendum was held. The next government needs to act swiftly and efficiently to ensure the personal finance profile of Britain is not hit any further so we can begin to focus on helping the 14 million people living in poverty.”

Jenny Tooth CEO of the UK Business Angels Association said: "We can only hope that the next government will continue to support the angel and early-stage investment across the UK and will recognise the important role that our community plays in backing innovation and growth. The SME economy is a significant driver of growth and job creation in the UK; supporting them will be a key factor in overall economic growth that the government needs to address.”

And Luke Davis – CEO of IW Capital, an investment house that funds small businesses added: “Investors and entrepreneurs will be pleased to see this result – not least because of Labour pledges to raise both income and corporation taxes. What SMEs will want to see now is certainty around leaving the EU so that they can grow and scale with confidence. There is a tremendous amount of ambition in the small business community and especially in innovative entrepreneurs – we hope to see the Tory government support this community."

Carolyn Fairbairn, CBI Director-General, said: “Congratulations to Boris Johnson and the Conservative party. After three years of gridlock, the Prime Minister has a clear mandate to govern. Businesses across the UK urge him to use it to rebuild confidence in our economy and break the cycle of uncertainty.

“Employers share the Prime Minister’s optimism for the UK and are ready to play a leading role. They can bring the innovation, investment and jobs for a new era of inclusive growth. The biggest issues of our times – from tackling climate change to reskilling the workforce for new technologies – can only be delivered through real partnership between government and business.

“The starting point must be rebuilding business confidence, and early reassurance on Brexit will be vital. Firms will continue to do all they can to prepare for Brexit, but will want to know they won’t face another no deal cliff-edge next year. Pro-enterprise policies on immigration, infrastructure, innovation and skills, will help relaunch the UK on the world stage.

“Despite recent challenges, the UK remains a great place to start and build a business. A new contract between enterprise and government can make the UK a global magnet for investment, powering higher productivity and living standards across the UK.”