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Business world seeks stability and direction following Brexit

Published 24/06/2016

Simon Walker, IoD Director General, warns over business confidence.
Simon Walker, IoD Director General, warns over business confidence.

Business groups forecast a "nervy time " ahead for industry and urged the government to do all it could to maintain stability.

Simon Walker, Director General of the Institute of Directors, said: "While this may not have been the result that the majority of our members wanted, Britain has voted to leave the EU, and it is now imperative that our political leaders manage the transition as smoothly as possible. The weeks and months ahead are going to be a nervy time for business leaders, so they need to know that the Government is focused on maintaining stability while a new relationship with the EU is established.

"It is now beholden on politicians to negotiate a deal with European leaders which preserves the ability of British firms to trade easily with the remaining member states.

"Even once we have left, the EU will continue to be our biggest trading partner, and the first destination for many companies when they start to export.

"One thing the Government must do immediately is to guarantee the right to remain of EU citizens currently in the UK. Companies do not want to have to worry about losing valued staff."

Dr Adam Marshall, acting director general of the British Chambers of Commerce, said: "In the wake of the electorate's historic decision to leave the European Union, the immediate priorities for UK business are market stability and political clarity.

"Some businesspeople will be pleased with the result, and others resigned to it. Yet all companies will expect swift, decisive, and coordinated action from the government and the Bank of England to stabilise markets if trading conditions or the availability of capital change dramatically.

"Firms across the UK want an immediate and unambiguous statement from the Prime Minister on next steps, along with a clear timeline for the UK's exit from the European Union.

"Business will also want to see a detailed plan to support the economy during the coming transition period - as confidence, investment, hiring and growth would all be deeply affected by a prolonged period of uncertainty.

"If ever there were a time to ditch the straight-jacket of fiscal rules for investment in a better business infrastructure, this is it."

Carolyn Fairbairn, the CBI's director general, said many businesses will be concerned and need time to assess the implications.

"But they are used to dealing with challenge and change and we should be confident they will adapt.

"The urgent priority now is to reassure the markets. We need strong and calm leadership from the Government, working with the Bank of England, to shore up confidence and stability in the economy.

"The choices we make over the coming months will affect generations to come. This is not a time for rushed decisions.

"The CBI will be consulting its members and business is committed to working with Government to shape the best possible conditions for future prosperity."

Mike Cherry, chairman of the Federation of Small Businesses (FSB), said: "Smaller businesses up and down the country now need a focus on economic certainty and stability.

"In light of the result this morning there has been a shock to the market with the pound falling to its lowest level against the dollar since September 1985. Today we call on the Government and the Bank of England to urgently put in place measures to prevent any further instability negatively impacting small businesses in the UK.

"Small firms need to know what this means for access to the single market as soon as possible."

Terry Scuoler, chief executive of the EEF, the manufacturers' organisation, said: "The Government must move very quickly to stabilise the economy, reassure the markets and shore up business confidence.

"The process of leaving the union will take some time and the Government should not rush to instigate Article 50 and the formal exit process while there is so much uncertainty.

"Ministers must think carefully about our negotiating position while setting out a clear roadmap for establishing a new deal with the EU, which remains our biggest market and trading partner.

"We need a clear vision for a new relationship between the UK and the EU, but we must also avoid throwing the baby out with the bath water.

"In the complex task of unpicking the UK from EU regulation and legislation, the Government must tread carefully, keeping if we can a trading relationship with the single market, avoiding dramatic overnight changes and not becoming bogged down to the detriment of making long-awaited and much-needed decisions on projects vital to our future economic prosperity."

CBI boss Carolyn Fairbairn stressed the importance of calming the markets to avoid volatility.

Some "very careful thinking" was now needed about how the UK engages with Europe, she told the Press Association.

"We now need mature immigration policies that address public concerns and we must protect trade deals."

The CBI will be consulting its members to identify their priorities, said Ms Fairbairn, adding that a "huge amount of reflection" was needed.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said: "The Government must now maintain economic stability and secure a deal with the EU which safeguards UK automotive interests.

"This includes securing tariff-free access to European and other global markets, ensuring we can recruit talent from the EU and the rest of the world and making the UK the most competitive place in Europe for automotive investment."

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