In recent months businesses in the UK have been expressing concern over the effect on the economy after leaving the European Union and have felt that it has not been getting priority. But the government’s new conciliatory tone towards business, which was first felt in the Queen’s Speech last month, has been praised by leading business groups. The government has now said that it intends to consult more intensively with businesses and others to “test and validate” its strategy to leave the European Union and build support among companies.
In addition, the corporation tax cuts in the Conservative manifesto are still expected to happen by 2020. Confederation of Business Industries, Director-General Carolyn Fairbairn said: “This welcome change in tone needs to be backed by clarity and action now.” She added: “Fast action on industrial strategy, skills and infrastructure will show that the UK is a great place to do business.
“The bills that have been outlined will go some way to providing the framework for what happens when the UK leaves the EU. What matters now is meaningful progress in the negotiations. A top priority must be to maintain the full economic benefits of the single market and the customs union and until a final settlement is agreed and implemented is key.”
The Institute of Directors praised the tight focus on pressing issues as well as the willingness to work with enterprise. Its Director-General Stephen Martin said: “Business leaders will actually be pleased to see the tighter focus on the most immediate challenges.”
He went on to say: “There was also a welcome change of tone, clearly acknowledging the value of enterprise to the country and the importance of including businesses in discussions about what our future looks like. It is, of course, unlikely that the process of getting Brexit legislation through Parliament will be as smooth as it’s been presented, but in the circumstances we are not expecting to get much more detail than we have received.”
Head of financial services lobbying group TheCityUK, said: “The government has outlined an ambitious legislative programme, much of which is critical if we are to achieve the orderly Brexit on which rests the future success of the UK and European economies, as well as wider global financial stability.”
Furthermore, businesses have been pleased that Brexit Minister David Davis has promised top company executives he will give UK businesses a bigger say in Brexit process. Davis has said he was going to “intensify” his dialogue with businesses over Brexit negotiations. He also indicated the UK will seek a transitional trade agreement with the EU and that this should be ironed out early in negotiation.
Business groups such as the British Retail Consortium have highlighted the importance of securing a transitional deal to avoid economic shocks on the day the UK formally leaves the EU. The London Chamber of Commerce and Industry has found potential trade barriers are the top Brexit concern for the capital’s companies.
Chancellor Philip Hammond has also pushed for a transitional deal. Despite agreeing on the need for such a deal, Davis appears to be at odds with Hammond, saying the chancellor had made various statements that were “not quite consistent with each other”. He said the chancellor accepted the period will not stretch beyond the end of the current parliament.
Bearing in mind that in the past Prime Minister Theresa May rarely made a great deal of room for business chiefs and head of industries, her change in tone is particularly welcome businesses feel. Although it must be said that her predecessor David Cameron, called on business leaders every month and regularly denounced the opposition leader (at the time) Ed Miliband’s economic policies, and he convened a business advisory council to keep in with the bosses in the financial district.
May, on the other hand, disbanded this group as soon as she took office and ever since then there were grumblings from certain quarters of the business community that the new PM simply didn’t show enough interest in business. The change in tone now is smoothing things over and groups such as the British Chamber of Commerce and the Institute of Directors have been working closely not just with the PM’s office but also with the Business Minister, Greg Clark, to whom May has outsourced day-to-day business relations.