Business leaders welcomed the certainty of the result but warned clarity on future trading relationships remain vital.
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Several business leaders and economists have called for more clarity on Boris Johnson’s plans for the future trading relationship with the EU following the Conservatives’ decisive election victory.
Shares and the pound soared following the result, with many in the City welcoming the stability that comes with a comfortable majority.
But there remained a note of caution over Brexit and future policy decisions that will impact the economy and taxes.
Here are some of the key points made by commentators:
Yael Selfin, chief economist at KPMG
“Reigniting investment spending and accelerating growth will be key for the new Government but as the cloud of uncertainty around an EU deal is likely to remain throughout next year, public spending will need to do the heavy lifting.
“The new Government must also turn its attention to some of the longer standing challenges facing the UK, such as poor productivity and declining regional opportunities, to help secure a better long-term future, while addressing the challenges and opportunities presented by new technology and climate change.”
Catherine McGuinness, Policy chairman at the City of London Corporation
“The UK’s future success depends on attracting, retaining and developing high quality talent.
“A critical first step is creating an effective and efficient visa system to meet demand for talented individuals.
“But the Government also needs to look closer to home to supercharge our own skills agenda, making sure no one is left behind amidst unprecedented technological and social change.”
Miles Celic, chief executive officer, TheCityUK
“With a January Brexit now all but certain, both sides must move quickly to prepare for the next stage of the negotiations.
“The first phase has been dominated by the impact on goods. This has neglected the 80% of the UK economy made up of Britain’s world-leading services industries.
“Ministers should seek to rectify this, consult widely, and focus their efforts on how the UK’s global leadership in services industries like ours can be sustained and enhanced over the course of this parliament.”
Chris Sanger, head of Tax Policy at EY
“Many will now be starting to ask what the proposed tax changes outlined in the party’s manifesto and in comments made during the election campaign might mean in practice.
“While there is an element of ‘business as usual’ from a tax perspective, the election campaign did signal a shift in emphasis, not least with the cancellation of the scheduled cut in next years’ corporation tax rate and the references to reforming entrepreneurs’ relief and limiting arbitrary tax advantages for the wealthiest in society.
“Beyond this, progress on Brexit may also produce issues to be resolved for the new world after we leave the EU.
“The real question will be whether the Government, empowered by its significant parliamentary majority, chooses to supplement these manifesto commitments with new, bolder policies.”
Edward Park, deputy chief investment officer at Brooks Macdonald
“Brexit’s trade process will curb the market’s enthusiasm and cap the improvement in sentiment towards the UK. Some short-term Brexit clarity will be helpful for UK assets, but the shape of the future trading relationship will be pivotal and this remains a huge unknown.”
Huw Evans, director general, Association of British Insurers
“Having been given a renewed mandate to leave the European Union, the Government now needs to focus on how it ensures an orderly withdrawal and a sustainable future relationship with our European neighbours.
“Such a relationship should not involve becoming a long-term rule-taker of the Single Market we will be leaving in six weeks’ time.”
Stephen Jones, chief executive of UK Finance
“It is vital the Government now focuses energy on delivering the Withdrawal Agreement and building an environment for a strong economy that encourages investment and confidence for businesses and consumers right across the UK.”
One policy area in particular that has been jumped on by business leaders is the property sector – with shares in housebuilders Taylor Wimpey, Barratt Homes, Berkeley Group and Persimmon the four biggest risers on the FTSE 100.
Richard Donnell, research director at Zoopla
He explained that to maintain any longer-term momentum, the Conservatives must put in place plans to encourage housebuilding when Help to Buy in England ends in 2023.
He said: “This may seem a long way into the future, but our analysis suggests almost a quarter of schemes being developed today will still be under construction in 2023.
“There is the prospect of a cliff edge at this time, which could disrupt new housing supply. It is important the new Government focuses on transitioning from Help to Buy to a new scheme, modelled around the old Starter Homes scheme as outlined in the manifesto."