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General election: what’s next for businesses?

General election: what’s next for businesses?

More than a week on from the general election and the dust is beginning to settle in Westminster. Following the outcome of a hung parliament, prime minister Theresa May faces the realistic prospect of having to dilute the Conservative Party’s key manifesto pledges if she survives as PM over the coming weeks after losing her overall majority.

Firstly, Mrs May has not secured a mandate for the ‘hard Brexit’ she was seeking. She needs to rethink her previously hardline approach but surprisingly sent Brexit secretary David Davis to Brussels for talks with the EU on 19 June 2017.

Then there’s the Queen’s Speech on 21 June 2017, when we should learn more about government policies for the new parliamentary session. But Mrs May is relying on support from the Democratic Unionist Party (DUP), which could make it harder to pass key legislation.

The DUP failed to outline any real business strategy in its manifesto. However, Conservative pledges to boost small business should, in theory at least, be unaffected; particularly after Greg Clark retained his role as business secretary following a recent cabinet reshuffle.

So what can we expect the impacts to be on businesses?

In the lead-up to the 8 June 2017 election, the Tories called on central governments to “play a role in supporting SMEs”, adding that 33% of central government purchasing will come from small businesses over the next 5 years.

Mrs May pledged to hold big contractors to account by ensuring they comply with the Prompt Payment Code. But with her political future up in the air so is the promise, which will do nothing to allay the fears of small business owners who want a crackdown on late payments.

Other Tory manifesto proposals included:       

  • guaranteed worker representation in the boardroom
  • blocking more “aggressive” foreign takeovers
  • increasing the national living wage to 60% of median earnings by 2020
  • government grants for a national retraining schemes
  • more frequent revaluations of business rates (currently assessed every 5 years)
  • commitment to cut corporation tax to 17% by 2020.

Hopefully Mrs May’s faith in Mr Clark will ensure the Tories deliver their manifesto pledges for businesses. Whether or not they both make it to Christmas, however, remains to be seen.

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