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UK politicians court business leaders as Brexit drags on and election approaches

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Via CNBC

The U.K.’s political leaders have pitched their election promises to business leaders gathered in London on Monday as uncertainty surrounding Brexit, and a forthcoming general election, dominate the economy.

Prime Minister Boris Johnson who leads the ruling Conservative Party addressed delegates at the Confederation of British Industry (CBI) conference in London ahead of speeches by the leader of the main opposition Labour Party, Jeremy Corbyn, and the leader of the center-left Liberal Democrats, Jo Swinson.

Johnson, who stands a good chance of being re-elected as prime minister with his party ahead in voter polls, announced several tax cuts for British businesses on Monday although he said the party would postpone a further cut in corporation tax.

He also acknowledged that Brexit, which is still not finalized more than three years after the referendum on EU membership in June 2016, was causing disruption to business and hampering investment and job creation and repeated that “we must get Brexit done.”

He said the economy was “still not achieving what it could … and the country is being held back, let’s be clear, by politics, and by a parliament that for the last three and a half years has simply failed to discharge its basic promise made umpteen times to honor the mandate of the people and to deliver brexit, and that is why we need this election now.”

Speaking to delegates, Johnson said “we have to clear this parliamentary blockage in this dynorod election” and blacmed lawmakers for prolonging Brexit uncertainty. Parliament effectively forced Johnson to request a further extension to the Brexit deadline, to January 31 2020, as it not had approved his Brexit deal.

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The Brexit agreement, re-drawn by Johnson and the EU, has not received a majority of support from U.K. lawmakers and a general election on December 12 is seen as a way to break the deadlock over the deal.

Johnson said the Brexit deal would be passed quickly and simply if his party was re-elected next month.”One of the advantages of voting Conservative in this election is that we can and will get it done, and get it done in a matter of weeks. We have a deal that is ready to go, just add hot water, stir in pot, it’s there.”

An economy ‘for everyone’

Speaking straight after the prime minister, Jeremy Corbyn, the leader of the left-wing Labour Party, drew a laugh from the audience by thanking the “warm-up act” before laying out his party’s plans for the economy ahead of its manifesto launch on Thursday. Corbyn said his party would work for a fairer society and an economy that “works for everyone.”

He also refuted the belief that he is anti-business, calling that “nonsense,” and said his party would set up a sustainable investment board and 320,000 apprenticeships for young people.

Corbyn repeated his party’s pledge that a Brexit deal would be put back to the people for a final say and also took aim at a potential trade with the U.S., saying there was a risk that a trade deal with President Trump could harm some sectors of the U.K. economy, such as its steel industry.

He also insisted that the country’s national health service (the NHS) would not be part of a trade deal after President Trump caused uproar in the U.K. earlier this year saying “everything” would be on the table in any trade deal discussions, including the NHS.

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Jo Swinson, the leader of the third largest political party, the Liberal Democrats, is also set to speak Monday.

The CBI, which represents 190,000 businesses employing around 7 million people, has been a vociferous critic of Brexit; its Director General Carolyn Fairbairn warned in July that a no-deal Brexit would be tantamount to “a tripwire into economic chaos.”

The latest economic data showed that the U.K. avoided a technical recession (two consecutive quarters of negative growth) in the third quarter after it reported a 0.3% rise in gross domestic product (GDP) from the previous quarter, in which the economy had contracted by 0.2%.

Brexit is largely seen as the villain in patchy U.K. growth as it has shaken business and consumer confidence. The unemployment rate was 3.8% in the July-September period, according to data from the Office of National Statistics.

The CBI’s Chief Economist Rain Newton-Smith said the Conservatives’ pledge to cut business rates (charged on non-domestic properties) would provide “some respite to smaller retail businesses. But they will do little to stimulate the sustainable business success that communities around the country need.”

“Fundamental reform is the only way to ensure the system is fair, sustainable and works for businesses across all sectors and regions of the economy,” she said.


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