POLITICS
The unwinding of heightened levels of
stockpiling, growing anxiety over the prospect of a no-deal Brexit and moderating global growth are now starting to manifest as a marked slowdown in economic activity. The contraction in manufacturing production,
while disappointing, was perhaps unsurprising given the current downward pressure on activity in the sector from the running down of excess inventories, weakening automotive production and tougher global trading conditions. The slowdown in services output in the
‘The need for the new Prime Minister to get down to business has never been greater. We need immediate, tangible steps to tackle some of the issues holding businesses back’
quarter, however, is a deeper worry given the sector’s significant share of the UK’s total UK economic output. Although the figures made for a grim first
reading, it’s important to keep in mind that this initial analysis may change as further data comes in. In most quarters, the first GDP estimate is often revised several times before a definitive figure is set in stone, which may well be the case here. Just last month, the ONS revised its
methodology for collecting data to calculate the official measure of the pace of GDP. It found that between 2007 and 2016, the economy grew by £26bn more than first thought. The new methodology will be used in headline GDP estimates from this month, meaning the Q2 2019 may well change. The figures, however, should serve as a stark
warning that there are still uncertain times ahead for the economy in the run-up to – and aftermath of – Brexit, so there can be no room for complacency. Against this backdrop, it’s vital that Mr Johnson and his new Government take all steps necessary to avoid a no-deal Brexit and urgently tackle some of the longstanding domestic issues which have hamstrung business for too long. The Government’s recent shift in position on
immigration control represented a major U-turn in a Brexit process where certainty – so important to allow businesses to plan – has been at a premium. Under Theresa May’s premiership, businesses
were given a clear message that freedom of movement wouldn’t end, certainly not in the short-term, and have been planning on that basis. That appears now to not be the case,
following Boris Johnson’s announcement that EU free movement rules will end immediately in the event of a no-deal Brexit. This is exactly the sort of scenario which
causes jitters among businesses at a time of great uncertainty. Yes, businesses want clarity, but we also need consistency. It can’t be right that those people that are creating the wealth,
jobs and opportunities that will ultimately determine the success of this country are left second guessing at what policy announcements may come next and then whether they’re official policy or just a tough soundbite to make a political point and win some airtime. If a business was run along these lines it would risk losing both customers and staff, hand over fist. From the critical need to avoid a messy and
disorderly Brexit to fast and decisive action to fix roads and stop endless increases in business costs, there are some basic but fundamental issues that have seemingly been put on a back burner as Brexit has played out. The need for the new Prime Minister to get
down to business has never been greater. We need immediate, tangible steps to tackle some of the issues holding businesses back, to boost the confidence of businesses, investors and consumers. Many of the things businesses have been
calling out for can be implemented at speed, and would send the strongest possible signals to companies and investors grappling with ongoing uncertainty and change. These include avoiding a messy and
disorderly Brexit – no mean feat, granted, but achievable nonetheless. Government planning should also be stepped up to enable businesses to plan for all scenarios. There should be an automatic registration for key trade simplifications, as well as ensuring continuity of trading conditions with third countries. We also need a reaffirmed commitment to
major projects including all phases of HS2, the electrification of the Midland Main Line, the expansion of Heathrow and investment in strategic air freight hubs such as East Midlands Airport, which would continue to unlock further jobs, opportunities and economic benefits for our region. Other urgent fixes needed to make the UK an
attractive place to invest include bridging the gap between what education has to offer and what employers need, making sure there are no high-speed internet or mobile telephony black spots, cutting congestion on our roads and ensuring Britain is recognised as a world-leader in advanced and green technologies. Whatever happens with Brexit, it may shape
but it won’t define our future – we will define our future. Through the products we make, the goods we move and the people we serve, it is businesses that will ultimately determine the success or otherwise of the UK. It’s therefore absolutely crucial that the Prime Minister and his Government, through their words and policies, demonstrate to us – and to the rest of the world – that Britain remains the best place to succeed in business.
business network September 2019 45
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