EEF and the Forum of Private Business are separately urging all political parties to quickly form a consensus that allows business and innovation to thrive.
EEF has urged all political parties to come to agreement as a matter of urgency to remove political uncertainty and reassure markets and business that it has a plan to reduce the deficit.
The manufacturers organisation said the new government, regardless of its political composition, must set out a clear and credible plan for how it will tackle the deficit; give assurances that tax reform will be a priority to help rebalance the economy and promote investment; and introduce an energy bill outlining market reforms and a clear commitment to nuclear power.
‘The clock is now ticking on action to get our economy going again and tackle the crisis in our public finances,’ said Terry Scuoler, EEF chief executive. ‘Manufacturers will fear that a political impasse and a failure by all parties to come together will stall this and risk damaging our economy.”
‘We need to see political maturity and courage to face up to the tough decisions that are necessary. Business and the markets will be looking for immediate and decisive action. This must include a clear plan for how and when we will reduce the public deficit and the modernisation of our tax system to rebalance the economy and promote investment.
Looking to the medium term, EEF believes policy priority should focus on investing in innovation; and enhancing labour market flexibility by maintaining a default retirement age and retaining the individual opt-out from the Working Time Directive.
The EEF believes medium-term priorities should also include addressing skills shortfalls by prioritising resources for STEM subjects; providing business-support schemes for programmes likely deliver the greatest benefits; and tackling energy and waste infrastructure needs with urgency.
The Forum of Private Business is concerned that the uncertainty and confusion caused by a hung parliament will jeopardise job creation and innovation for SMEs.
Recent Forum research found that almost three quarters of small business owners were finding it difficult to plan for 2010.
With a hung parliament potentially threatening to hold up tax and spending proposals aimed at tackling Britain’s deficit, this uncertainly is likely to increase.
Forum chief executive Phil Orford said: ‘I expect many smaller businesses will be disappointed that the election has resulted in a hung parliament.
‘However, the outcome can’t be changed so it is vital that the newly elected MPs put aside party politics and work together to come up with a credible system of governance.
‘With the economy still in a very precarious state and a mountain of public debt to be tackled, businesses owners need our elected representatives to move away from inter-party point scoring and show political responsibility.’
Paul Flatt, group chairman at engineering consultants Hurleypalmerflatt echoed the sentiments of the EEF and the Forum of Private Business when he said business will be looking for the new government to show strong leadership in the near future.
‘We’re at a critical phase in the recovery and our main concern is that we have economic certainty,’ said Flatt. ‘Tackling public debt must be an immediate priority – we cannot afford to go the way of Greece or Spain.
‘However, pushing cuts through parliament will take nerve and it remains to be seen how the new government will deliver.
‘For companies such as Hurleypalmerflatt, which now has a significant base both here and overseas, global confidence in the UK is vital. We must all ensure that the close election result does not do our country’s economic or political reputation undue damage.’