Political parties urged by employers’ groups to establish coaltion to protect the economy

Employers groups have urged the political parties to reach a coalition agreement “swiftly” to protect the economic recovery and to avoid confusion and delays over legislation.

Yesterday’s general election has now resulted in a hung parliament, after the Conservatives failed to win a majority at the polls, leaving politicians scrambling to negotiate a coalition government.

Adam Marshall, director of policy at the British Chambers of Commerce, stressed “political horse-trading” had to be set aside to “avoid a crisis of confidence” and protect the economy.

He said: “Companies across the UK have expressed significant concerns about how a hung parliament could affect the decisive action needed to cut the deficit and improve the business environment.

“The electorate has spoken, and opted for a hung parliament. But the business community has also spoken, and expects the parties to put political horse-trading to one side and put the UK economy at the heart of their thinking. Strong leadership and consensus are required to deal with the serious threats still facing the economy.”

The CBI’s director-general, Richard Lambert, warned “uncertainty brings risks” and urged politicians to agree a stable coalition.

“Business needs stability and wants to see a clear decision reached swiftly, which delivers a stable new government,” he said. “The UK’s route to economic recovery needs to be firmly established.”

The Recruitment and Employment Confederation (REC) warned that the political uncertainty could lead to a delay in the implementation of new employment legislation.

Kevin Green, chief executive of the REC, said: “The political ‘twilight zone’ of a hung parliament is likely to delay some of our priorities, such as the official guidance and potential review of the Agency Workers Regulations.

“Whoever forms the next government must deliver the right economic climate for business to create the prosperity and jobs our country needs. The other immediate priority is to reduce the deficit, but the new government must focus on reforming public services rather than making short-term cuts.”

Meanwhile, Terry Scuoler, chief executive of the manufacturers’ group the EEF, said businesses now “need to see political maturity and courage” to address the challenges in the economy.

He added that the policy focus of the new government should be enhancing labour market flexibility, maintaining a default retirement age, retaining the opt-out from the Working Time Directive, prioritising resources for STEM subjects, and tackling weaknesses and complexity in the skills system to deliver a demand-led approach.

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