CBI warns of post-election ‘power vacuum’

Business leaders have called for public finances, infrastructure, housing and EU reform to be at the top of the agenda following the General Election.

Today, the CBI published its vision for the first 100 days of government following the May 7 poll.

The industry lobby group warned against allowing a “power vacuum” in the early days of the next Parliament, as uncertainty grows over the election result.

The action plan would help keep economic growth on track and boost investment as the new administration got underway, it said.

John Cridland, director-general of the CBI, said: “Whether we have a majority, minority or coalition government, we ask those involved to ensure that the period of post-election uncertainty is kept to a minimum.

“We cannot afford a power vacuum that delays urgent policy decisions and unsettles potential investors, so any new cabinet must get down to business as soon as possible.”

The new government should start a comprehensive spending review to identify savings and set a path for further public services reform, the CBI said.

It should also publish a business tax roadmap to ensure the UK remains the most competitive corporation tax regime in the G20, the group said.

The CBI also called for the launch of a new independent infrastructure commission. Katja Hall, CBI deputy director-general, said this could “weave its way through the usual planning gridlock” to set large-scale national projects in motion.

It urged the administration to commit to adopting the Airport Commission’s final recommendations for a new runway in the South East.

A consultation into three options - which included extending Heathrow’s Northern runway, adding a third runway at Heathrow or building a new runway at Gatwick - closed in February. The commission is due to report its conclusions later this summer.

Ms Hall added: “The decision on expanding aviation capacity cannot wait another five years, so the new government should commit to backing the final proposals from the Davies Commission.”

An “ambitious, achievable” EU reform agenda should also be top of the new government’s priorities, based on keeping the UK in the union.

Ms Hall said there must be a constructive plan to deliver change in Brussels, “referendum or no referendum”.

As part of this, the CBI said there should be a swift completion of the controversial Transatlantic Trade and Investment Partnership (TTIP) by the end of 2016.

Critics of the free trade and investment initiative, which will open the market between the US and EU, have warned it will lead to the privatisation of health services in the UK. However, the CBI has said the deal will be “crucial” for future growth.

The CBI has called for an extension of free childcare and a review of education for 14 to 18-year-olds with a view to scrapping GCSEs and creating vocational A-levels.

It also urged the future government to allow markets to remain independent, in part by introducing a “one in, two out” policy for business regulation.

Mr Cridland said any “horse-trading” that is needed to form a new government cannot be used as an excuse to “duck the tough questions” that could undermine the UK’s economy.

He said: “Much remains to be done to secure the UK’s economic future and business wants to see a confident, new administration getting into its stride by taking action on the key priorities.

“For any incoming government to make its mark it needs clear delivery milestones in its first 100 days. Politicians tend to focus on the next big idea or initiative but business will judge success on the success on the delivery.

“The ‘what’ is interesting but the ‘how’ you can deliver and make a difference is what really counts.”