Here’s how business groups have reacted to Theresa May’s conference speech

Louis Ashworth
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Conservative Party Leader Speaks To Conference On Day Four
May has been under pressure to demonstrate her support for businesses after Boris Johnson's alleged remark (Source: Getty)

Prime Minister Theresa May used her conference speech today to attack Labour’s plans on the economy and slap down her Conservative party rivals – saying austerity was “over” and promising to fix the “broken” housing market.

Business groups have been keenly awaiting May’s speech, as she fights off rebellions from her own MPs and attempts to build consensus around her vision for Brexit.

Here’s how key groups have reacted to key topics in her speech today.

Believing in business

Boris Johnson Delivers His Brexit Speech To The Conservative Home
Former foreign secretary Boris Johnson has come under criticism over his alleged comments about business (Source: Getty)

What May said:

“[The Conservatives must be] a party that believes in business, but is not afraid to hold businesses to account.”

What it means:

May has been under pressure to re-affirm Conservative support for business, following leaked comments made by her arch-rival Boris Johnson, in which he is purported to have said “f*** business”. She used her speech to try and reassure the business sector of her support for free markets and low taxes, but did not announce any distinct new measures.

The reaction:

Carolyn Fairbairn, director-general of the CBI, which represents 190,000 UK businesses, said “The Prime Minister’s unambiguous call to back business is welcome.”

“Unity in politics can be matched by unity between government and business,” she added. “Championing a pro-enterprise economy is the only way to show the world that Britain is a fantastic place to create the products and services that power growth.”

Read more: Hammond says Tories are the 'party of business' as he attacks Corbyn

The IEA, a free-market think tank, welcomed May’s defence of business but criticised her proposed solutions.

“The Prime Minister delivered a robust defence of the benefits of free enterprise, spelling out clearly that nationalisation of industry results in less efficient and more expensive delivery of services,” said its director, Mark Littlewood.

“But the actual policies announced and promoted today around housing, energy costs and the National Health Service were far more interventionist in nature.”

Stephen Martin, director general of the Institute of Directors (IoD), which represents business leaders, said: “The Prime Minister was absolutely right to swear by businesses, rather than at them. It’s no secret that many business leaders have felt politically snubbed in the past few months.”

“But firms will inevitably ask, where are the big-ticket, tangible items that will enable them to cut through the political fog?” he added. “Leaving Brexit aside, we know that the UK has been struggling with productivity for the last few years, so we need to see support for small companies in particular to adopt new technologies and improve skills."

Brexit plans

Conservative Party Conference - Day One
Pro-Europe protestors outside the Conservative Party Conference in Birmingham (Source: Getty)

What May said:

“The people we serve are not interested in debates about the theory of Brexit – their livelihoods depend on making a success of it in practice.

”A Brexit that might make Britain stronger fifty years from now is no good to you if it makes your life harder today.”

What it means:

May used her speech to take a thinly-veiled jab at critics within her own party, such as Jacob Rees-Mogg, saying that Brexit required a pragmatic approach that reduced “friction”. She did not call her Chequers proposals for negotiations by their name, possible showing a recognition of their intense unpopularity among the Tory grassroots.

The reaction:

“It was positive to hear the Prime Minister explain her Brexit proposals in clear terms today,” said Martin of the IoD. “Businesses rely on frictionless trade that can’t be easily replaced through a simple free trade agreement. Our members selling goods will welcome that May recognised this inescapable fact in her speech, and that it is reflected in the government's negotiating approach.”

“However, many businesses still feel unprepared for a no-deal outcome that could be just months away,” Martin added. “Ingenuity is not enough to see them through – we need an adjustment period no matter how we leave to make Brexit in any form a success.”

Read more: 'End Brexit psychodrama' - Chamber of Commerce chief pleads with the Tories

“A new relationship with Europe based on the Chequers model with frictionless trade has strong business support,” the CBI’s Fairbairn added. “The Prime Minister has stood her ground, resisting the fiction that a Canada-style deal works for jobs. Now politicians should support her to get a deal – and the critical withdrawal agreement – over the line.”

“Brexit must not suck the oxygen out of domestic policy,” she added.

Helen Dickinson, chief executive of the British Retail Consortium (BRC), which represents retailers, said: “Theresa May's commitment to a strong trading relationship with the EU following Brexit is encouraging but as the Prime Minister herself acknowledged a scenario involving the introduction of tariffs and costly checks at borders would be damaging.”

“Time is running out for the government and the EU-27 to secure frictionless trade which is essential to ensure UK consumers continue to have access to the wide choice of products they are used to, at competitive prices,” she added. “We must see an agreement on the Irish backstop to pave the way for the withdrawal agreement and transition period. Retailers need certainty as they strive to deliver a continuous supply of food, medicines and other products.”

Housing promises

The UK's Construction Industry Grows At Slowest Pace In Six Months
The construction industry is currently growing at its slowest pace in six months (Source: Getty)

What May said:

“Solving the housing crisis is the biggest domestic policy challenge of our generation.”

What it means:

May plans to scrap the cap on how much local authorities can borrow to fund new builds, and will open up £9bn in funding to councils.

The reaction:

The Federation of Master Builders (FMB), the largest trade association in the construction industry, welcomed the proposals, calling them a “victory for common sense”.

Brian Berry, chief executive of the FMB, said: “This is the most exciting, and potentially transformative, announcement on council housing for many years. It is something the house building sector and local authorities have been crying out for since the last economic downturn as a means by which to increase house building.”

“Local authorities have a strong interest in delivering new affordable homes and many would have the appetite to directly fund this, but have been frustrated from doing so by an artificial cap on their ability to borrow against their assets to build homes,” he said.

Read more: Raising stamp duty for foreigners won't fix Britain's housing crisis

Trevor Goode, head of planning and public sector at law firm Ashurst, said the change was “positive news”.

“The government has at last listened to the plea from local authorities to remove the constraints around funding and allow them to use their land and powers to deliver much needed housing,” he said.

The IEA was critical of May’s housing proposals, which they said said failed to address the cause of current problems. Littlewood argued against increased social housing, saying: “The private sector could deliver the number of homes needed if it were given the opportunity to do so, through planning liberalisation and incentives to build.”

"This is a financially irresponsible and costly proposal, which will still not do the job of getting renters onto the housing ladder,” he said.

Immigration issues

Cabinet Meets To Discuss A No Deal Brexit
Home secretary Sajid Javid has suggested the current separation betwen high- and low-skilled migrants may need review (Source: Getty)

What May said:

“[W]ith control of our borders, we can do something that no British government has been able to do in decades – restore full and complete control of who comes into this country to the democratically elected representatives of the British people.”

What it means:

May’s government is proposing a single immigration system that will treat migrants from EU countries the same as those from elsewhere in the world, while prioritising highly skilled foreign workers over low-skilled migrants.

The reaction:

The CBI’s Fairbairn criticised the government’s proposed new immigration system, saying it was “a wrong turn”.

“The UK economy needs workers at all skill levels. A one-size-fits-all global system ignores the need for migration to be on the table for trade deals and binds small firms in unmanageable red tape,” she said.

Berry, from the FMB, echoed that, saying: “Recent announcements on post-Brexit immigration rules, if implemented as currently understood, will be a serious threat to our ability to deliver on the promise of this policy. The failure of the government so far to listen to the construction industry could unfortunately threaten the delivery of the government’s increasingly bold moves to solve the housing crisis.”

Read more: Business groups criticise government's post-Brexit immigration system

Dickinson, from the BRC, said: “The retail industry and employers in its supply chain are extremely concerned about future restrictions on low skilled migration.”

“While we recognise the need to attract, retain and up-skill domestic talent any proposed policy should be demand-led and based on our economy's needs rather than arbitrarily drawing a line based on salaries or skills,” she added. “There are around 200,000 EU nationals employed in the retail industry in the UK across warehouses, shop floors and fulfilment centres. Shutting the door on low-skilled migration will have a negative impact on the excellent service British shoppers enjoy every day.”

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