Liz Truss resigns as UK Prime Minister: Business community reacts

Yesterday (October 20) saw Liz Truss resign as the UK’s Prime Minister after serving just 45 days in office. She will continue to serve until a successor is appointed on October 28. But just what ramifications will this latest parliamentary development have on the country’s business community? Read on to find out more

Shevaun Haviland, director general of the BCC

“Following weeks of chaos and uncertainty, the Prime Minister has resigned. Her resignation means the UK now faces even greater uncertainty, just as it stands on the cusp of a recession.

“It is now vital the Conservative Party speedily comes to a decision on a new leader who can return both political and economic stability. The new administration must immediately set out how they plan to deal with soaring energy bills, labour shortages, spiralling inflation and interest rates.

“Flip-flopping on policies has led to low consumer and business confidence, with four in 10 firms expecting falling profits, as companies have seen little sign of a coherent strategy nor stability in Government decision making.

“The challenges that lay ahead of us are building by the day. Two thirds of firms expect to raise their prices and inflation is the top concern. Interest rates are set to climb further in November and energy bills will now rocket again for many in April.

“This is unsustainable. Government must work with business to address three main issues, to show it recognises the challenges firms face. Firstly, they must look again at the energy support package for businesses and communicate quickly how the system will work from April.

“Secondly, they must fix the labour market, without the skilled people to do the jobs businesses need, the economy cannot thrive. Thirdly, to grow the economy they must set out a strategy to boost our exports.

“People run businesses and businesses rely on people. The new administration must grasp that the cost of living and cost of doing business crises are two sides of the same coin. We still need a clear long-term vision on how it will support firms, and the communities that rely on them, to thrive.”

John McCabe, chief executive, North East England Chamber of Commerce

“Prime Minister Truss’ decision to resign her leadership of the Conservative party is the opportunity for a reset.

“After the continued instability of the last 24 hours it’s vital that integrity and unity are the watchwords for the future, especially as we approach the fiscal event on October 31. The Conservative party wants to move quickly towards new leadership. This must be done in a calm, decisive and unified manner that puts the national interest first.

“For businesses, the workers and the communities they support that means three things: a clear and consistent plan on energy costs, a sensible approach to managing the causes and effects of inflation, and targeted, meaningful support for the most vulnerable.

“As we have always said, the cost of living crisis and the cost of doing business crisis are two sides of the same coin and both need action now. The country has paid a high price for the instability and uncertainty of the last six weeks. It’s vital those with the mandate to govern renew our trust and belief that they can.”

Danni Hewson, financial analyst, AJ Bell

“To use a phrase that has no doubt been exhausted in the past few weeks, markets don’t like uncertainty. And losing another prime minister in the midst of a cost-of-living crisis is far from ideal.

“But Liz Truss’ credibility with markets was shattered when her former chancellor unveiled the mini-budget which effectively lit the touch paper on an explosive period for politics and demonstrated the importance of taking markets with you when it comes to fiscal policy.

“Sterling received a boost against the dollar on the speculation that resignation was imminent and the yield on 30-year gilts was nudged down, but the reality that number 10 is once again in need of a new inhabitant has led to minute by minute fluctuations.

“There are big questions to be answered and they need to be answered quickly. The Conservative party is promising a quick appointment within days, crucially ahead of the fiscal event scheduled for Halloween.

“And for markets that’s really the key issue - that independent economic health check needs to be published and policy needs to stand. There can be no more vacillating, dithering or U-turns.

“But can the party really rally behind one person? Can there be a unifying candidate who can heal political wounds and restore confidence that the important business of running the country can actually be put first ahead of political power plays?

“There are naturally many calls now for a general election, and time will tell whether that can be sidestepped by the incoming prime minister.

“Volatility which has been a hallmark of global markets this year is most definitely here to stay in UK markets, at least for now. Time is short and credibility is on the line, but it is ordinary people’s finances that should be the priority.”

Alan Thomas, UK CEO at Simply Business

“SMEs need immediate assurances that the next government will have clear plans to support small businesses in the long-term. The ongoing political uncertainty is chipping away at SME confidence at a time when many owners are already nearing breaking point.

“The cost of Covid-19 for the self-employed, including lost clients, loss of earnings and loan repayments, sits at a total of over £126bn. And it’s clear that soaring inflation and rising costs will only make things more challenging.

“The UK’s self-employed are a driving force behind our growth, and they desperately need a helping hand. Instead, they are being stifled by years of economic uncertainty

“Our SME Insights Report indicates that small business owners need government support, with three in five calling for a review or reduction of the energy price cap. Why is this important? Small businesses account for over 99 per cent of the firms operating in the UK and contribute trillions of pounds to the economy.

“What’s clear is that SMEs and the self-employed need and deserve a coherent, long-term plan that supports their success.

“And with almost six million SMEs in the UK, accounting for over 99 per cent of all businesses, 33 per cent of employment and 21 per cent of all turnover, it’s vital that the new prime minister places them front and centre in their plans for economic recovery.’

By Matthew Neville – Correspondent, Bdaily

• Add me on LinkedIn and Twitter to keep up to date
• And follow Bdaily on Facebook, Twitter and LinkedIn
• Submit press releases to editor@bdaily.co.uk for consideration.

Looking to promote your product/service to SME businesses in your region? Find out how Bdaily can help →