Home News How will the General Election affect Cumbrian businesses?

How will the General Election affect Cumbrian businesses?

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The early General Election will give all parties an opportunity to set out policies for a Brexit that works for business.

That’s the view of Cumbria Chamber of Commerce Chief Executive Rob Johnston, who welcomed the Prime Minister’s announcement that she plans to hold a General Election on June 8.

Theresa May had said previously there would be no poll before 2020.

Rob said: “The Brexit negotiations won’t start in earnest until after the elections in France and Germany, so it makes sense to get our elections out of the way now too.

“If the opinion polls are to be believed, the Conservatives are likely to be re-elected. But that will give Theresa May’s administration the authority to go into Brexit talks with an electoral mandate – and end the criticism levelled at her that ‘no-one elected you’.

“More importantly, a June poll gives all the parties a chance to set out their approach to Brexit in their manifestos.

“Our view is clear. We want a Brexit that works for business.

“Our view is clear. We want a Brexit that works for business.”

“That means certainty for businesses on the residence rights of their existing EU workers, and clarity on hiring from EU countries during the negotiations and after we leave.

“On trade, it is crucial that we minimise tariffs, avoid costly non-tariff barriers, and keep existing EU free trade agreements with other countries.

“And we’re calling on politicians to ensure stability by incorporating existing EU regulations into UK law for a minimum period following Brexit, and to ensure there is no funding ‘cliff-edge’ for areas receiving EU funding.”

But what impact will the election have on business?

General Elections generally have a negative impact on the economy in the short term as consumers adopt a ‘wait and see’ approach to big ticket purchases, including moving house.

General Elections generally have a negative impact on the economy in the short term as consumers adopt a ‘wait and see’ approach to big ticket purchases, including moving house.

That was certainly the effect in the run up to the last election in 2015.

It may not happen this time because – unlike 2015 – the result is deemed to be a foregone conclusion.

Shortly after Theresa May’s announcement on Tuesday, William Hill was offering odds as short as 1/6 on a Conservative victory, compared with 16/1 for a Labour win and 25/1 on the Liberal Democrats having a majority.

The pound rose strongly against the dollar, euro and other major currencies as currency dealers decided that an increased majority for Theresa May would allow her to resist pressures from backbenchers for a ‘hard Brexit’.

Conversely, the FTSE 100 fell because a stronger pound reduces the value of earnings in overseas currencies, and many FTSE 100 companies derive a great deal of their income from overseas.

Pharmaceuticals company GSK, for example, saw its share price dip from 1645p to 1582p immediately after the election was announced.

© Cumbria Chamber of Commerce

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