Business leaders across various sectors, including banking, property and leisure, share their thoughts with the Evening Standard’s City desk on the December 2019 general election result….
There was a flood of relief from the water industry, a top priority for nationalisation in Labour’s planned first 100 days in government — although investors seemed to have priced in a Tory victory into the UK’s regulated utilities, with most shares up 15% since September.
Industry group Water UK said: “Water nationalisation would have been bad for customers, the environment and the economy — so it’s good news it’s off the agenda for now. But we’ve still got a lot of work to do with ensuring water efficiency is as embedded in policy as energy efficiency.”
The Conservative election victory put a brake on Jeremy Corbyn’s rail nationalisation plans — and rail operators were managed to restrain their jubilation. FirstGroup said the election put “a welcome emphasis on public transport and its importance for both economic growth and decarbonisation.” But Paul Plummer, chief executive of the Rail Delivery Group, warned the new Government needed “to move forwards on a range of domestic issues — including building HS2 and seizing the opportunity to deliver root- and-branch reform of our railway.”
The vanquished threat of nationalisation put a rocket up the share price of listed giants including British Gas-owner Centrica and SSE — but industry body Energy UK’s director of policy Audrey Gallacher warned Boris Johnson must “quickly break the hiatus in energy policy”.
The Prime Minister has pledged net-zero emissions by 2050 but Gallacher added: “With just 120 quarters until 2050, there is no time to waste so we look forward to seeing clear policy direction.”
Economists cautioned the initial exuberance for the markets would probably cool off in the coming months. David Zahn, head of European fixed income at funds giant Franklin Templeton said: “Gilt yields are likely to fall and the pound is likely to strengthen going forward. Risk assets such as corporate bonds will probably rally, too. However, a market relief at a Conservative victory may be quite short-lived as investors pivot quickly to think about what’s next, particularly with Brexit.”
David Duffy, chief executive of Virgin Money, said: “I would like to congratulate the Prime Minister on securing a clear majority, that will bring some valuable certainty for the country. We are looking forward to partnering with the government in improving investor confidence and providing much needed finance and investment in all regions of the UK — there are huge opportunities to increase productivity and growth outside of London and create a thriving economy, especially for small business.”
Chief executives of estate agents, office developers and housebuilders all welcomed the verdict. OnTheMarket’s Ian Springett hopes it will “restore confidence amongst ‘wait and see’ buyers and sellers” who had put plans on hold.
Paul Williams at Derwent London said “greater certainty is good for business”. Donagh O’Sullivan at housebuilder Galliard said: “I look forward to seeing a significant release of investment — decisions that have been stalled on the back of political uncertainty will now get the green light.”
However, Brian Bickell, Shaftesbury boss said: “One element of uncertainty has gone but long term confidence won’t return until there is total clarity on our future trading and political arrangements with the EU.”
Mortgage brokers and estate agents said they had seen a spike in enquiries as buyers sought to complete purchases following the general election result.
Trevor Abrahmsohn at upmarket estate agent Glentree International said buyers from Asia and Eastern Europe have agreed to respective £28 million and £25 million residential buys in north London following the result. They had been awaiting clarity before agreeing purchases.
Daniel Minsky, director at London-based agency Estate Office, tweeted: “Phone ringing off the hook here.”
Investment fund managers
The UK’s investment industry reacted with bullish enthusiasm. Investment Association chief executive Chris Cummings, who speaks on behalf of funds running nearly £8 billion, welcomed the chance to “promote the UK as the global leader for investment management” with Johnson’s new regime. Investec’s Alastair Mundy said overseas bidders “may seek to buy up cheap UK assets” due to the political clarity.
Hedge funds shorting sterling may have been caught out by the pound’s rally. Polls were accurate this time — unlike Brexit and Trump —lowering the likelihood of burnt fingers in Mayfair hedge fund land.
Sir Martin Sorrell, executive chairman of S4Capital said: “The good news is we now know clearly what the Electorate wants – “get Brexit done” and a rejection of Corbynism. Unfortunately, we won’t know what the trade deal with Europe will look like for some time, maybe even no deal. So some uncertainty remains.”
He added: “For S4 it clearly means we now build our business even more aggressively in the Americas and Asia Pacific. Western Europe remains important, but we have to pivot, like the UK as a whole to different markets including the Middle East and Africa and Eastern Europe. I hope the new government will pursue the “Singapore on steroids” approach. Low tax and regulation-lite, with an emphasis on education, mobility and infrastructure, both hard and soft.”
Retailers today pushed the new Government to come through on its manifesto pledge and urgently review business rates. British Retail Consortium chief Helen Dickinson said: “We will be bringing that up and making sure that review really takes place and does not tinker around the edges as we have seen before. Given the majority that Boris has the Government can bring a longer-term perspective perhaps more so than we have seen in recent years.”
Helen Brocklebank, boss of luxury goods trade body Walpole, said her industry is looking for “swift and positive” progress on Brexit.
Diamond jewellery retailer Boodles’ managing director Michael Wainwright said: “There are definitely a lot of business people out there who are our customers saying they are ready for a Christmas spend if the Tories get a majority.”
Chief executives of pub operators said cheers to the result, including Patrick Dardis at Young’s: “Huge relief — best of a poor lot.” Nick Mackenzie at Greene King said: “We hope that a majority government will bring greater certainty to the UK economy, encouraging businesses to invest and go on to benefit employees and consumers across the country.” He urged the Government to address regulatory and cost pressures facing the industry, such as high business rates.
Kate Nicholls at trade body UKHospitality, which counts restaurant chains as members, tweeted: “Clarity and certainty likely to reduce volatility and that will be helpful for food price inflation.”
The technology industry welcomed the end to “three years of uncertainty” but pressed Government to help address its skills crisis. Russ Shaw of industry body Tech London Advocates said: “Our big focus is on talent. We are just not filling the jobs that we need and the government needs to look at immigration and lifting the cap on Tier 2 visas.” Shaw said Johnson’s support for the technology industry during his time as London mayor was encouraging for the future. Bruce Daisley, European Vice-President for Twitter, said: “I hope this election win isn’t seen as a victory for the most ungracious campaign in living memory.”
Philip Jansen, BT chief executive said: “There are lots of things for the new government to get done, few more important to the UK than speeding up the delivery of full-fibre broadband. Our new Ministers can take some simple, immediate steps to cut through the red tape and help us build like the clappers. We’ve got 33,000 brilliant Openreach engineers ready to roll.”