Hung parliament – worrying for UK industry?

12 June 2017

The prospect of a hung parliament is being faced by the UK for the second time in 7 years.  Theresa May sought to strengthen the position of the Conservative party, ahead of Brexit negotiations. A narrowing margin saw an election result in which the Conservatives do not have enough seats to form a majority government and a coalition with Northern Ireleand’s DUP is looking likely.

Another hung parliament means uncertainty for UK industrial sectors.

Carolyn Fairbairn, director general of the Confederation of British Industry said:

“Businesses everywhere are stunned. It is another level of uncertainty in an already uncertain environment. First and foremost, we now need to create a functioning administration with fiscal stability, financial stability and the economy at the top of the agenda. We need strong leadership for the Brexit negotiations, which start in only nine days. We have good investment going into tech, life sciences, industries of the future. We mustn’t put all that on the back burner.”

Alison Carr, IET director of governance and policy, said: “It’s difficult to predict at this stage what the implications of a hung parliament will be for engineering and technology.”

Terry Scuoler, chief executive of EEF, believes that the new government needs to put the needs of industry at the forefront and ensure that businesses receive the support that they need during these uncertain times:

“The Brexit negotiating strategy requires a careful rethink,” he said. “Industry should be at the table, alongside whatever administration is formed, to help ensure we have the right negotiating position, which is something that’s been sadly lacking until now.

“The main parties have championed an industrial strategy for Britain and this must not be a casualty of the political turmoil. It is the best blueprint for business in the current circumstances.”

Delays in Brexit negotiations are now also a reality, with a planned start in negotiations on 19th June, hanging in the balance.  Uncertainty over trade deals, changes to the labour market and caution by banks in lending continue to be tricky considerations.  A hung parliament and Theresa May’s weakened position only add to the difficulties surrounding a Brexit deal that is beneficial to the UK industrial sector.

Written By Sharon Shaw