This month, the FT City Network, our panel of more than 50 top figures from the City of London, were asked for their views on the post-election environment in the UK.

The questions posed were: What are the priorities now for our weakened government? What are the dangers? And are there any upsides? Participants were more vocal than usual and focused almost entirely on the issue of Brexit, with many appealing for collaboration across political divides and with business. Below is the full transcript of the online debate.

Lord Mervyn Davies, Corsair

Two bad decisions in the last two years have turned the country upside down and left us in chaos. However, I hope we will now have a soft Brexit. Energising young people to vote has also to be a major plus.

Politicians and business people have to realise that austerity went too far and that we have to tackle the significant inequality in our society.

We need leaders in politics and quickly.

Geopolitical tension is rising and yet markets flourish. We are in a dangerous period so calmness and teamwork are required, so is consensus building.

We cannot afford macho politics with Europe. We need to agree a sensible deal — and quickly — or stay in!

As regards NHS workers, care workers, policemen, nurses, civil servants, firefighters etc, we need to pay them what they deserve otherwise unrest will grow.

Terrorism, Europe, inequality are high priorities for the cabinet.

Business voice has to be heard and we have to shout louder.

We, the business world, are being ignored and that is extremely poor politics.

Dame Alison Carnwath, Land Securities

Once again the electorate has proven that it is smarter than our leaders.

This is how I look at this. Although the manifesto said very little about Brexit details and was dominated by minority sports activities and U-turns and massaged expectations, we do now know that most British people do not want a so-called hard Brexit.

In addition, a nasty problem which might have arisen with the state of the union between Scotland and the rest of the UK has been at least temporarily dealt with by the SNP result and the progress of Labour and Conservative seats north of the border. So this is helpful information.

The PM is too scared to change any of her top five team, all of whom must now be accumulating some facts and knowledge on how to negotiate with Brussels. Continuity is helpful and this team should remain core. They should add some business leaders to the core as full-time advisers for the duration of the talks with Brussels. Trade and immigration and law and security remain key.

Ireland will be a focus as the polarisation in Northern Ireland politics will have consequences for the Union and negotiations. We will have to see how the DUP uses its presence in Westminster.

The possibility remains that the muddle and slim mandate might lead gradually to a growing belief that Brexit can never really happen. Brexit does NOT mean Brexit but might mean something else entirely. Some hope for some vision on this.

I think business must simply accept and learn that we have to live with a prolonged period of instability in our markets and stop asking for certainty from our politicians — they can’t deliver it. We can educate our civil servants and ministers and maybe they will want to hear more from us now. Although I have my doubts. That being said, if business was more democratically engaged with politics — not just through lobbying or ad hoc meetings with the PM but embedded in policy decisions then we might be able to build an agenda for growth and prosperity which the population really needs. We need wealth creation. We need growth. We need entrepreneurs. We need a liberal outlook and to remain fair.

Not from ranting and raving but calm and steadfast. Certainly not strong and stable or weak and wobbly.

Guy Hands, Terra Firma

The priority for this Conservative government is to gain the support of more than 50 per cent of the population for its response to Brexit or abandon Brexit as quickly as possible. Currently, less than one-third of the population turned out to support them at the ballot box and virtually none of the young who are those who will be most affected by Brexit supported them.

The Conservative party has to wake up and smell the coffee and stop smugly talking to each other and accept challenge from other parts of the population. The Conservatives lost the election because a large percentage of the population despises and does not trust them.

The upside opportunity for the Conservatives is to honestly and humbly admit that their futile attempt to bury an issue that has been tearing the Conservative party apart for 40-plus years has spectacularly failed and they now need to abandon Brexit. Brexit is tearing the country apart and will make the Conservatives an unelectable party for the foreseeable future if not sorted rapidly.

The danger if the Conservatives do not abandon Brexit is that the UK will be totally humiliated in the negotiations, the pound and the economy will decline, the Conservatives will get slaughtered in the next election and the UK will get a far-left government which will lead to the total collapse of the UK economy. But then of course those who will suffer most from this scenario didn’t vote Conservative and the Conservative party doesn’t listen to or care about what they think.

Nigel Wilson, L&G

London is the greatest City in the world. It is our collective responsibility and a privilege to make Britain the best country in the world. We start in a good place: our employment rate at 74.8 per cent, employment at 32m and vacancies at 0.8m are at all-time highs as is the FTSE at 7,500. Interest rates are at an all-time low. Never has there been so much finance available to increase productivity, growth and real wages and reduce inequality: let’s use it.

Many of our well-known economic and political issues are intergenerational, intercity and intracity. Let’s build the additional 150,000 houses a year we need for the young and old. Let’s finance the amazing science and innovation being produced by our world-leading universities, not just London, Oxford and Cambridge, but also Belfast, Bristol, Cardiff, Edinburgh, Manchester, Leeds, Newcastle, etc.

The spirit of entrepreneurialism across the UK is rising — let’s nurture and finance it. We should show leadership and reach out to the EU by allowing all legitimate Europeans to stay and encourage Europe to do the same for UK citizens.

We all aspire to live in a fair, tolerant and inclusive society whose economy is driven by technological and scientific leadership. Business needs to step up and show leadership and positively and constructively collaborate with our political leaders to deliver that society.

Lady Barbara Judge, IoD

Our biggest priority is to get business back on the political agenda, whether that is domestic policy or issues surrounding Brexit. It was somewhat disheartening that business was very much absent in the election campaign from all political parties. We now need the government to pick up that baton and run with it.

On Brexit, in a recent survey, IoD members said an agreement on rights of EU citizens and vice versa was crucial. Similarly, members were keen to negotiate an early agreement on transitional arrangements and a deal that includes no tariffs which may hinder trade with our partners in Europe.

Minority governments are notoriously difficult. The Conservatives must recognise that they have not earned a mandate to implement their manifesto in full. This could mean they will show more flexibility in moving away from some of the rhetoric of the election campaign and focusing on a pragmatic Brexit, with sufficient transitional arrangements for business to adjust appropriately.

James Bardrick, Citigroup

Strategic leadership by politicians, business and all opinion influencers in society is now vital. We must focus on the issues that really matter longer term. We already know what the sustainable reputations that we would like to build with the majority of our citizens across the whole of our country, throughout our society and for the UK as a whole at home and in the world look like. These are not about short-term “wins” in politics, the markets or the media. They are more about building a national culture around becoming a more inclusive, innovative, entrepreneurial, productive and inspiring nation that has earned the right and reputation to punch above its weight on the world stage and be proud of its achievements and behaviour.

Accordingly, Brexit has to be top priority as we reposition the UK in the region and the world. We must negotiate a deal that maximises market access, without adding to risk of a disorderly collapse of the talks. Also, let us please avoid any risk, through pursuit of narrow self-interests, that the Great Repeal Bills are not passed in time — in itself causing a disorderly Brexit.

We must refocus on education, better preparation for careers and jobs and other investments in our young people. These are needed to underpin much-needed productivity growth and let us remember that health and social security really are high in people’s (voters) concerns. Real and perceived social justice and inclusion are crucial for the long-term stability and optimisation of the country. We are our people — all of them.

To bridge across the short-term uncertainties, including Brexit, and to buy time to re- orient our culture and economy, we must insist on social and economic and fiscal policies to ensure that the UK keeps investing in people and infrastructure, incentivising innovation and entrepreneurialism, improves its inclusion and structurally improves productivity. That platform for growth is the upside.

The downside? The risk that political disruption leads to even more short-termism and policies to buy off various interests and undermines longer-term economic and social progress. That is my biggest fear.

Oh, and at risk of banging on, let us not just tell others what to do. We as businesses really can make some of these things happen by what we do and how we behave now!

John McFarlane, Barclays/The CityUK

Put simply, we now have an unstable situation at the worst possible time where we need certainty, particularly resolving whether Brexit remains the best course of action and, if so, on what terms.

Based on a thin majority we have decided to exit the EU, leaving an uncertain geopolitical and economic outcome, a divided country, major industries, particularly financial services, threatened, uncertainties about Scotland and Northern Ireland’s long-term position in the United Kingdom, the Ireland/NI border, and with millions of talented EU residents uncertain about their future.

This is a great country with world-leading capabilities, particularly in education, services and high-value-added manufacturing, and a great place to live, work and enjoy. But it’s not a country with a coherent long-term vision and programme.

Unnecessarily, this has become an unfortunate and inauspicious period for Britain. Our role and influence in the world is waning. While our economic foundation appears successful on the surface relative to the G7, like other developed nations, we are below average real and nominal global GDP.

The real economic issues are with low productivity and the balance sheet, with modest assets and future funding capacity, against very serious current and future, largely unfunded liabilities, including debt, public and private sector retirement obligations in an ageing society, health and social security obligations, a need to replace aged infrastructure, climate change and defence and security protection in the face of the domestic and international terrorist threat.

Unwisely we missed the opportunity of the North Sea oil boom to create a fund for future generations and obligations and squandered the proceeds. Spending now comes out of current taxes, which, given the size of the obligations, inevitably must rise. At the same time, we need to create an attractive environment for businesses and employees. A difficult trick to pull off.

We also have a divided society politically and economically, requiring greater inclusion and where the rising gulf between the rich and the highly paid and the south of England versus the rest, needs to be narrowed.

In setting priorities it is easy to lurch to what is currently urgent, but even short-term priorities need to be in a context of a long-term philosophy and plan. I would therefore suggest three priorities.

First, stabilise the political situation, embrace a coherent mandate, within the constraints of a minority government and begin a new relationship with business, where wealth is created.

Second, decide on our EU policy and if leaving the EU, adopt a win-win approach to Brexit rather than viewing this as a negotiation. In this context announce immediately that EU citizens’ rights in the UK are protected (most are anyway), that we will meet reasonable financial obligations to the EU, that the NI border will remain open and that we are open to joint regulatory oversight of EU-related activities in the UK. All set to create a more constructive relationship. Retaining London as a EU and global financial centre is pivotal.

Finally, work needs to start on a new inclusive vision for Britain and a long-term congruent programme to achieve it.

Samir Desai, Funding Circle

The first step for the new government and Conservative party is to reflect and listen. The Ukip/hard model of Brexit and the strategy to form a large majority based on this has failed. The youth vote has flexed its muscles and neutralised the movement of Ukip and some hard Leave voters to the Conservatives. Regardless of your political persuasion, who cannot be enthused by young people finally engaging in politics and making their voice heard? The electorate and country they thought they were representing is very different now — had young people voted at the same levels as older voters the EU referendum result would have been to remain. Remain voters, far from being accepting of the result, have delivered bloody defeats in places unimaginable previously — Kensington going to Labour?

The Conservative party itself is changed. A number of Leave hardliners are departing, and the newly-elected Scottish MPs will be a powerful force of moderation, potentially pushing for single market membership, and make up a block as large as the DUP.

It is time to now deliver a Brexit that the country as a whole can get behind. The most rational option is to move the strategy towards EEA membership (the Norway model) — in the single market and customs arrangements. Both major parties can get behind this option — it is pretty much Labour policy without being explicitly spelt out. This requires minimal negotiation, execution risk and includes options to limit immigration to some extent (although Norway has never pulled them). This has clear upsides for business and young people, and satisfies the referendum question of leaving the EU. For the Conservatives, this means a period of stability to recover, positive economic performance and with some dollops of cream for the newly engaged youth vote (no tuition fees is not as stupid a proposal as has been made out in the press), a potential route back to a majority in the next election.

The risks are clear — that hardline views prevail instead of moderation and divisions increase. Keynes said “when the facts change, I change my mind, what do you do?” Let us hope we have brave politicians who will have open minds and listen to their electorate.

Alexis de Rosnay, Canaccord Genuity

The priorities for our weakened government should be twofold:

Work closely with the EU’s negotiating team, stop working so overtly against it. “Technocrats” have had bad press over the years for all sort of (sometimes valid) reasons, but there’s one thing they are very good at: negotiating treaties and fine print. My sense is that it would be a very uneven contest at this moment in time. Chose the right UK negotiating team because May vs Barnier or Davies vs Barnier doesn’t look like a close contest today…..

Listen to the youth. It is clear that Corbyn attracts the youth because of the simplicity of his rhetoric and because “good old socialism” always goes down quite well with a large number of younger people. Brexit has spooked a lot of young people, and now is the time to reach out to them and reassure them as to why Brexit is good for Britain and good for young people who will be looking at these decisions and their impact 40 or 50 years from now.

Anne Richards, M&G

What we need now is pragmatic leadership that is prepared to recognise the true challenges we face, to seek and find compromise and that has the confidence to work to make the pie bigger rather than argue over who gets what share.

Insularity is not an option in today’s connected world: we are tied to our neighbours whether we like it or not. To think that we can dictate terms is to be blind to reality and to a changing and more uncertain international environment.

But there are reasons to be optimistic. The higher turnout by younger people at last week’s election could be a sign that the public’s disengagement with politics is coming to an end. It is not just young people who have lost faith in the political system, after all. Turnout for all groups under the age of 45 has crumpled since 1997.

This is a time to put narrow party politics to one side.

Douglas Flint, HSBC

If ever there was a time for cross-party agreement surely it is now in relation to the Brexit negotiations. Both the referendum and the recent election demonstrated that views on the ultimate EU settlement crossed party loyalties, demographics and geography, so to get the best deal the UK surely would be best served with a negotiating team made up of the best talents in the UK. The electorate seems to be signalling frustration and anger against pure partisan party politics — a message that should be taken on board.

Rhydian Lewis, RateSetter

If it wasn’t for Brexit, the priority would probably be to replace May as the leader of the Conservatives and/or for the country to prepare for another election.

The urgency of Brexit, however, gives the Conservatives a pretext to cobble together a working government and to rally around May in the interests of survival and in the name of “stability”. If they go with this approach they could articulate a counter-narrative to the perceived “failure” of last week: May won the greatest share of the popular vote for decades (13.7m votes doesn’t suggest unpopularity); May is now demonstrating the discipline and sure-footedness that she claimed made her the right person to conduct the Brexit negotiations in the first place.

The dangers of this approach are: a sense of illegitimacy builds (May having strictly been on the losing side of the Brexit vote and then not having “won” an election); a deal with the DUP causes unforeseen challenges down the road; it is all very fragile and the business of domestic government becomes unworkable.

There are limited upsides from a weakened government because uncertainty is never good but look for some silver linings: weakness forces more consensus; the young vote is now more engaged in British politics (stirred by Brexit referendum as opposed to by Corbyn?); the Brexit negotiators could feel the need to pursue a softer Brexit which could feel fairer to a country still split on the subject and could lead to more harmonious negotiations and therefore a better outcome overall.

Daniel Godfrey, The People’s Trust

The priorities now for our weakened government are to pause, think about what this calamity is telling them about the British people and start governing in the national interest and negotiating a good Brexit. This means starting off with the spirit of partners, not adversaries. Stop using language like “not showing our cards”. This is not a game.

The national interest also means focus on how government can nurture long-term investment, both public and private, in innovation, human capital development, R&D and infrastructure. This is the only way to create the productivity and GDP growth that really can make the UK a country that works for the many, not just the few.

The danger is that pride and dogma leads to a chaotic Brexit that impoverishes the country for a generation.

The upside is that out of the chaos, a better Brexit could emerge than the one we may have been headed for had Mrs May won her 100-seat majority (or even an indefinite suspension of Brexit). One can’t predict today just how that might come about, but with so much uncertainty, all outcomes must be possible!

With the benefit of reflection, significant opportunities could be within reach.

The prime minister could remove Europe from party politics by giving a cross-party Brexit committee the mandate to agree and then propose our negotiating position to a vote of the House. As a whole, the House has a majority for a Brexit focused on the economy rather than dogma. Such a Committee could survive a general election whenever it might come, removing the risk of Brexit Blackmail by an unrepresentative minority of MPs.

We should take the prime minister at her word that she wants to build a country that works for the many, not just the few. Shorn of the Brexit burden, the government should focus on productivity and GDP growth though long-term, public and private investment in education, infrastructure, innovation, housing and building communities. More growth, shared more fairly is the best way to deliver enduring social justice and to show that hard work and civic responsibility beat borrowing till we go bust.

Business has to show that it can stand up and play its part. This will need a revolution in the investment and capital markets chain to focus on sustainable wealth creation rather than relative competitive advantage. But will our politicians and business leaders put nation before person? If not, Jeremy Corbyn awaits.

David Roberts, Nationwide

The election result has highlighted clearly the challenges of modern Britain: the opportunities and costs of an ageing population and the stresses that places on inter-generational transfers and the public finances; the challenge of delivering hope and, crucially, jobs into towns and communities that feel left out; the appropriate tax burden including where it should fall most and, most symbolically Britain’s place in the modern world.

Tuition fees, funding of social care and of course Brexit were the totemic policies that shaped this election. However, the challenges we face are all ones that cannot be solved in the lifetime of any single Parliament. Britain through its history has been at its best when we have come together. At a time when the politics are at their most divided, it is more essential than ever that we try and create a national consensus. Business has proven itself not to be very good politics, and politicians have proven themselves not to be very good at business. The opportunity generated by this election is to forge a discussion and debate about how collectively business and politicians from across the political spectrum can find solutions to the long-term challenges faced by modern Britain and paint a picture of a modern, vibrant, successful and inclusive society that gives hope to all citizens.

Paul Drechsler, CBI

After last week’s general election, I think it’s time to take stock and reflect.

Nobody knows exactly what people voted for or against in the EU referendum in terms of the specifics on Brexit. The next generation did turn up in force and vote last week, with a reported 72 per cent turnout in the 18-24 age group.

I think the election result has sent a clear message that forward-looking and positive positioning is welcome. We now have the opportunity to do a reset — a reset that prioritises prosperity and will be appreciated by voters and businesses across Europe, because it will result in a better deal.

However, our parliament, politicians of all persuasions seem to have very different views of what success might look like in terms of Brexit. Trust, respect and relationships between UK and European leaders seem to be much diminished.

So what do we need to do to get a good deal for the UK?

It’s time for a change of mindset: a reset of relationships, a reset of mutual respect and a start to rebuilding trust.

This requires proper conversations about the differences and common ground. Conversations that are generous in their listening, respectful and directed towards the best possible outcomes for all. We should all start with no hard principles, no redlines and no insults. But a positive, pragmatic and humble approach by people working together on a future that is in the interests of all the people who elected them.

An early win, no matter what the final outcome of these discussions, would be unambiguous reassurance to EU and UK migrants — this would demonstrate goodwill on all sides.

I am pleased to say that relationships between the CBI and its sister business organisations in the other 27 EU member states are excellent. We share many common beliefs and values and despite the escalating tensions of the past 18 months we are still committed to economic growth in all our nations, to tariff-free access and to access to the best talent and skills.

I believe that business leaders across Europe have the appetite, capability and skills to contribute to solutions to the challenges of Brexit. There has never been a better time and there’s never been a more important moment for business leadership in the UK and Europe to show just what we can do to contribute to the future prosperity of all in the UK and Europe.

Brenda Trenowden, 30% Club

The first priority must be to pause and reflect on what took place last week and in the weeks following the announcement of the snap election in order to develop a more inclusive and positive vision for the country that the electorate can really get behind. During and after the recent terrorist attacks in the UK, this country has shown tremendous unity and resilience — our leaders need to inspire that same spirit in tackling the long-term challenges of economic growth, income inequality, climate change and of course Brexit. I have never heard so many people say that they were at a real loss in terms of how to use their vote as they struggled to truly identify with the policies and the leadership of any of the parties.

We also need more humility in our leadership, more empathy and a more consensual and accessible approach.

One of the upsides of the recent election is that we now have the most diverse House of Commons ever with increases in the number of women, LGBT, ethnic minority, state-school educated and disabled MPs. A more inclusive House of Commons will better reflect our society and will hopefully help the government to better engage with the electorate.

Michael Tory, Ondra

The priority has now to be the economy which, on account of the disproportionate focus on Brexit since the launch of the referendum nearly 18 months ago, has taken a distant second place; in particular, skills and productivity (which is still 20 per cent below that of France), excessive regulation (ie beyond what is entailed by the EU), and the sub-optimal allocation of the nation’s savings pool, with UK pension funds and insurance companies having made a massive shift from equities to bonds all the while our domestic infrastructure is being financed by Canadian pension funds!

The upside is that UK politics may now be converging with the economics in the direction of a more pragmatic and economically rational — and less ideological — approach to Brexit; people who question the wisdom of a hard Brexit can now no longer be so easily dismissed as standing against the popular will.

While the danger is represented by the faction of the governing party that places “Brexit purity” above all else, including preferring — by their conduct — to forfeit power than see their “red lines” crossed, which appears to be a real possibility.

Simon Walker, ex-IoD

The only thing that is clear to me is that there is no national consensus on anything. There is no agreement on the shape or form Brexit should take, no coming together on the funding of health, education or care of the aged, nor on the size and scope of the state, appropriate levels of taxation or regulation. Our society is deeply divided and these divisions have been exacerbated by nakedly sectoral pitches designed to win key pockets of floating — or indifferent — voters whose support is thought to be up for grabs.

It is important that people of strong beliefs, myself included, are willing to let go of their ideological underpinnings in order to try to build consensus on ways forward around which all our diverse communities can coalesce. Otherwise, the divisions which have riven the electorate over the past three years, and the uncertainties our winner-takes-all electoral system brings, will make Britain a much less attractive place in which to live and do business.

The upside, even if we don’t get to full consensus, might be the wider involvement in public discourse of new participants without the guile and calculation that the political process necessarily seems to entail. Early days, but perhaps that is what we are seeing in Emmanuel Macron’s France.

Source link

Add Comment

Your email address will not be published. Required fields are marked *