Business leaders from around the UK weigh in on how the election results will affect British startups
Theresa may had it all: a majority in parliament and approval ratings far above that of her opponent across the aisle Jeremy Corbyn. And then she called a snap election in the hope of strengthening her hand before the Brexit negotiations kicked off. Instead it did the opposite. When the results came in on June 9, it was revealed that the Conservatives had lost their majority and that Britain was yet again facing a hung parliament.
Since then the Tories have backtracked on many of their manifesto pledges. And even if they have now signed a deal with the Democratic Unionist Party to ensure a majority in parliament, itís still unclear what this will mean for British startups.
Founder, Time etc
Given the political uncertainty, it’s not a stretch to imagine the future of investment incentives like SEIS and EIS might be hanging in the balance. This would, of course, impact investment decisions and change the business landscape of the UK quite considerably. I hope the government will do everything it can to protect British entrepreneurship and the relief on capital gains, which currently makes exits very tax efficient. Without it, the incentive to build a business would be significantly reduced.
The danger is that UK startups are overlooked as the political focus rests on our Brexit strategy and defensive actions to safeguard big business, trade deals and export markets. If you look at the figures from the Office of National Statistics, they show that wage growth is falling further and further behind inflation. Small businesses forced to hold back pay will have to think about adding value with other rewards and benefits if they want to compete in the war for talent and retain their people.
Co-founder, Progressive Property
As the UK goes through uncharted territory in terms of leaving the EU, it is clear that government will need to keep fiscal and monetary support to business for the medium term. The uncertainty also prompted the governor of the Bank of England to say in June that borrowing costs need to “stay on hold”, meaning that the cost of borrowing for business is unlikely to rise anytime soon. This and a more normalised lending environment should provide the support businesses need for the immediate future.
A hung parliament was the last thing the UK business community needed on top of all Brexit uncertainties. Businesses need certainty and a sense of direction to thrive but following the shock election result they have the exact opposite. UK politics is once again in a state of disarray and this is a tough environment for any company to operate in. Business owners need to be reassured that the economy remains a key focus and is not forgotten amid the political infighting that’s sure to come.