Business leaders warn Johnson on no-deal Brexit

Business leaders gave a guarded welcome to the Conservatives' election victory but warned that Boris Johnson must avoid a damaging no-deal Brexit in trade talks with the EU.

The Confederation of British Industry and other business groups said a government with a solid majority brought clarity after years of parliamentary deadlock following the hung parliament election of 2017. But the lobby groups said Boris Johnson's "get Brexit done" slogan masked the complexity of negotiating an EU trade deal by December 2020.

Carolyn Fairbairn, the CBI's director general, said: "The fact that we now have a prime minister with a very strong mandate to govern is welcome. The real work starts now. It's very, very important to rebuild business confidence. Reassurance around no-deal Brexit options for next year. Businesses do not want to face another no-deal cliff edge next year."

Political and economic uncertainty over Brexit has deterred business investment and hit consumer confidence as the global economy has slowed. Businesses were also wary of Labour's policies, which included nationalisation of utilities and increases to corporation tax. Official figures showed the economy flatlining in October as uncertainty weighed on economic activity.

Shares jumped and sterling surged in response to the Conservatives' unexpectedly resounding election victory. Polls before the vote had suggested a hung parliament was still a possibility, unnerving markets.

The Tories' majority of more than 70 means Boris Johnson is almost certain to push through Britain's departure from the EU at the end of January. But the UK only has a year to complete a trade deal with the EU to avoid a no-deal departure - a timetable most commentators say is unrealistic.

Adam Marshall, director general of the British Chambers of Commerce, said: "Restoring business, investor and consumer confidence - and firing up the economy - must now be the prime minister’s top priority. Campaign slogans must give way to a renewed focus on the details that matter. Our business communities need to see swift, decisive action to avoid a messy and disorderly exit from the EU and to tackle the barriers holding back investment and growth here in the UK."

Marshall said the government needed to achieve a smooth departure from the EU that gives businesses time to plan. He also called for investment in skills, a pragmatic immigration system and reform of onerous business rates.

The election campaign focused on Brexit and public spending with little discussion of Britain's wider economic problems such as poor productivity, a skills deficit and creaking infrastructure.

Jonathan Geldart, director general of the Institute of Directors, said: "After years of parliamentary chaos, directors want to see a government that is clear-sighted about the challenges facing businesses, and ambitious, but realistic, in its response.

"Business leaders’ thoughts will immediately be turning to Brexit. For directors, ‘Get Brexit Done’ will only have meaning once the details of our long-term future relationship with the EU are clear. The prime minister must resist the urge for arbitrary negotiating deadlines and should commit to a proper adjustment period that starts when businesses know the full detail of what changes they may be facing."

Johnson has portrayed himself as a hardliner on Brexit and has said he will not request an extension to trade talks but with a solid majority he may be able to ignore anti-EU zealots in his own party to seek more time and greater alignment with the UK's biggest trading partner.

Stephen Phipson, chief executive of Make UK, the manufacturers’ organisation, said: "The recent focus on Brexit and the absence of bandwidth in government has meant that there has been little movement on many vital policy issues and there remains work to do before industry can turn on the taps of investment.

"The first job is the urgent need to begin negotiations on our future trading relationship with Europe, cementing frictionless trade, access to key skills, regulatory alignment and space for business to prepare for new arrangements."