CBI fears ‘power vacuum effect’ after General Election

money saving tips for londonersThe Confederation of British Industry (CBI) has cautioned of the negative effect that a non-majority result in the forthcoming general election will have on the UK economy.

It has issued a statement, urging all the main political parties to make their intentions regarding forming a government in the event of a hung parliament crystal clear, to reduce the risk of ‘post-election uncertainty.’

After the 2010 general election, the new government was not formed for five days. This time around, both Ed Miliband and David Cameron are insisting that they are confident their respective parties will win outright.

However, the most recent opinion polls indicate that no one party is looking likely to win enough seats for an absolute majority, meaning that another hung parliament is a probable outcome.

Should this be the case, the CBI has advised that the period of urgent negotiation that will inevitably follow must not be allowed to steal focus from the key challenges that the next administration will face. It said that those involved in such a scenario must ensure that they focus on delivering a clear public finance plan during their first one hundred days in government.

However the new government is formed, it is predicted that it will announce an emergency budget shortly after taking office, following the precedent set by George Osborne back in 2010.

The CBI has also indicated that it expects a swift decision regarding the implementation of the concluding recommendations of the report on the capacities at Gatwick and Heathrow airports, and clear plans regarding corporate tax.

For their part, both the Liberal Democrats and the Conservatives have pointed out that their fairly swift coalition agreement helped to sidestep a debt crisis like the one in Greece, despite the dire predictions of economic instability that followed the general election in 2010.

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