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London business reacts to election result

London’s business groups were quick to react to the news that Boris Johnson’s Conservative Party had secured an 80-seat majority following the general election on 12 December, calling for an EU deal and backing for vital infrastructure in the capital.

January 2020

Jasmine Whitbread, chief executive of business lobby group London First, said: “London’s businesses know first-hand from his time as Mayor of London that the PM has a strong track record in backing vital infrastructure schemes and championing a vision of an open forward-looking Britain. We hope to see this positive approach translated into the new government. First and foremost, business will be looking for reassurance that, once the withdrawal agreement goes through, we do not run the risk of crashing out of the EU without a deal at the end of 2020.

The government must move quickly to agree our future relationship with our biggest trading partner and, with many sectors of the economy already experiencing skills shortages, give urgent clarity on the shape of the future points-based immigration system.

The Conservative manifesto recognised the role for vital infrastructure in supporting the economy, from Northern Powerhouse Rail to gigabit broadband. The government now should go further and give clear backing to HS2 and Crossrail 2, as well as reaffirming support for airport expansion at London’s airports, putting in place the key building blocks needed to enable our regions to grow together.

ICAEW commented: “We hope that the new government will ease the strain on businesses and bring some much-needed stability to the economy.

While the UK is likely to leave the EU at the end of January, the terms of our future relationship with Europe are still to be decided. Securing good trading terms will help businesses and investors regain confidence and boost growth in the UK.

Peter Bishop, chief executive of London Chamber of Commerce and Industry, said: “Individual political viewpoints aside, businesses will be grateful that the election has delivered a clear result. The uncertainty caused by previous parliamentary deadlock had significant economic and business confidence impacts.

The majority of London businesses now want the avoidance of a no-deal Brexit. And they want the government to agree a realistic transition period in order to negotiate a future trading arrangement with Europe that is as straightforward as possible, and provides access to balanced immigration of all skill levels.

Brendan Sharkey, head of construction and real estate at MHA MacIntyre Hudson in London, said confidence would return to the construction sector but warned it could prove fleeting. He said: “Worryingly the larger infrastructure projects such as Heathrow airport and HS2 have no political head wind, but investment in schools and hospitals should now see funding move through the pipeline and this will provide a much-needed stimulus to the sector. The industry is crying out for commitment, the larger the better.

The great unknown will be whether the next stage of the Brexit negotiations will suck up political energy and sap confidence, just as the ratification of the Withdrawal Bill has. If so, the economy will get closer to a recession and business confidence will suffer, and the situation in one or two years’ time might look very similar to the malaise and drift we are experiencing now.

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