Tough decisions ahead for Cameron's new Government
Business leaders have given a cautious welcome to new Prime Minister David Cameron and his coalition Government.
The Conservative leader officially took control of the country last night after his party struck a deal with the Liberal Democrats following last Thursday’s hung parliament.
Last night also marked the end of Gordon Brown’s tenure as Prime Minister as the Labour leader announced his resignation from the role following his party’s election defeat.
But economists have warned the Tories that they face an unenviable task trying to sort out the UK’s economic problems and that tough decisions lay ahead.
Frank McKenna, the outspoken head of Downtown Preston in Business, said the Conservative-Liberal coalition needed to put to one side the uncertainty that had dogged the nation since last Thursday.
He said: “It is a good thing that we finally have a Government in place because the uncertainty was not doing the business community any favours.
“There remain some big hitters for them to call on to provide experience. The likes of Kenneth Clarke and David Davis should mean the coalition has enough experience when it comes to making tough decisions.
“I am less confident about those two parties being able to sustain a relationship beyond 18 months. I don’t think some of the Liberal Democrat policy concessions will sit well with their rank and file members.”
David Fishwick, owner of David Fishwick LDV Vans Minibus Sales, Colne, believes the Conservatives will provide a real boost for business now that they are in charge.
Fishwick, who exports his vans across the globe, said: “The change was needed. If Labour had got in with the Liberal Democrats there would have been too much policy uncertainty and that would have been bad for business.
“I understand there are plans to set up a business forum under the Conservatives so they can tap in to the knowledge of real business people. That would be a great thing.”
But with the UK national debt nearing £1trillion, economists warned that Government could be incredibly tough for the new coalition.
Tom Vosa, Yorkshire Bank’s head of market economics, was speaking at its financial solution centre in Blackburn earlier this week were he outlined the size of the task facing Prime Minister Cameron.
He said that huge public spending cuts loomed over the next five years and the Government also faced tough decisions about potential tax rises.
Vosa added: “I think we will see an increase in VAT to 20 per cent from January 1. That would raise around £12.5billion-a-year which would just about cover the interest on our debt repayments.
“An increase in capital gains tax is also a possibly conclusion as the Government looks to claw back the national debt.”