'˜General Election must reinforce momentum towards regional devolution'

Jonathan Oxley   Picture Bruce RollinsonJonathan Oxley   Picture Bruce Rollinson
Jonathan Oxley Picture Bruce Rollinson
THE MOMENTUM behind devolution must be reinforced during the General Election campaign, according to a leading business figure.

Jonathan Oxley, the chairman of the Institute of Directors in Yorkshire, said the region’s business community also wanted to find out how the parties’ planned to develop the Northern Powerhouse and handle Brexit.

Other commentators warned that Theresa May’s shock decision to call for an early election could lead to the deferral of major investment and hiring decisions, although in the longer term it could boost investment by creating a stronger Government.

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Mr Oxley said: “The need to publish manifestos will also give us clarity on key issues, not just Brexit but also healthcare, industrial policy and plans for the Northern Powerhouse. We need to ensure that the momentum behind regional devolution is reinforced rather than lost during the campaign.”

Andrew Wilson, the senior investment director at wealth management firm Brooks Macdonald’s York office, said he expected the election to weigh on investor sentiment in the near term.

He added: “The Government has consistently pushed back against revealing too much about its negotiating position with the EU in advance..

“However, during the campaign the various political parties may be forced to reveal their plans in regard to the UK’s secession.

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“As a result, we may learn some of the areas that the Government wishes to focus on, and others which it sees as ‘red lines’.”

If the Government’s manifesto leads the market to believe it is seeking a “soft” Brexit, this may give a further boost to sterling, Mr Wilson said.

He added: “However, as we have seen since the last June’s referendum, any sterling strength is likely to be negative for the FTSE 100 Index, given its skew towards international earnings.

“Ultimately, we see potential for the election to be a significant positive for the UK in the medium term, as the victorious party is likely to hold greater authority.”

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Geoff White, the policy manager at Royal Institution of Chartered Surveyors in the North and Midlands, said that, since the EU referendum last summer, market surveys across the residential, commercial and construction sectors show “we have largely moved on from initial negative reactions, but uncertainty continues to cloud the outlook and weigh on market sentiment”.

He added: “Today’s decision does very little to change that prognosis in the near term, and if anything, we are likely to see continuing deferral of major investment and hiring plans.”

Professor Christopher Bovis of Hull University Business School, said the election would have little impact on the UK economy.

He added: “What matters for the prospects of the UK economy is a hint of the UK-EU negotiations and the reaction of the market on the respective positions.”

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Iain Clacher, an associate professor at Leeds University Business School, said: “With the Brexit process and the most important political and economic negotiations the UK has ever had now underway, Theresa May has a number of domestic political challenges that could impede the negotiations.

“First, she didn’t win a general election, David Cameron did; and so if she wins in June, then she has a much stronger basis for negotiation; a mandate from the country.

“As the negotiations unfold she needs a greater margin of error in the Commons. The slender majority she currently has in Parliament is problematic. It will hopefully bring a little more certainty to an inherently uncertain process. Nobody truly knows what leaving the EU will look like, nor what the costs or benefits will be, and so anything that brings a little more certainty for markets will be seen as a good thing.”

In calling for an early general election in June, the Prime Minister is showing an unexpected gambler’s streak, said Charles Pattie, a professor of electoral geography at the University of Sheffield.

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He added: “But it’s a gamble with the odds strongly in her favour. She faces a much weakened and internally divided opposition, and enjoys poll leads rarely seen in the mid-term of a long Parliament. She can point to the invocation of Article 50 as ‘delivery’ on the EU Referendum.

“But she has not yet had to endure the hard pounding of the detailed Brexit negotiations to come, with the risks of defeats and compromises which those negotiations will bring. “Waiting till May 2020, the next date under the Fixed Term Parliaments Act, risks these advantages dissipating.”