January 17, 2020
For once, the psephologists got it right. In an unpredictable contest that ended up being predicted by almost all the major pollsters, Boris Johnson and the Conservative party have been returned to office with a 80-seat majority – their largest haul since 1987.
The General Election result amounts to something of a redrawing of the political map in Britain, with many seats in traditional Labour heartlands and the so-called ‘Red Wall’ turning blue.
Here in the North East, seven seats went to the Tories, many for the first time. The first to go was Blyth Valley, a Labour seat since it was created in 1950. Tony Blair’s old seat of Sedgefield and the Bishop Auckland constituency also went blue, despite having been Labour since 1935, as did Redcar in the wake of vehement criticism of the Tory Government for its perceived inaction around SSI UK when it collapsed in 2015.
Previously regarded as unwinnable territory, the North East now has ten Conservative MPs.
Labour campaigners trying to make sense of such historic results have said the party’s neutral position on Brexit and commitment to a second referendum did not go down well in the Leave- supporting North East. They also cited Jeremy Corbyn’s unpopularity as coming up time and time again on the doorstep.
For the Conservative Party and the country more broadly, Boris Johnson’s decisive victory is being interpreted as settling the argument on the British public’s clear desire to leave the European Union.
It is now all but certain that Brexit will happen on January 31, with Mr Johnson having more than enough votes to get his withdrawal agreement across the line.
After four years of political malaise, the question posed to voters in the referendum has now been irrefutably answered.
But it is important to remember that this is just phase one of the Brexit process. There is still the whole question of what kind of future relationship Britain will have with Europe to be dealt with.
As we move into phase two of the negotiations on February 1, Mr Johnson has made clear his determination to negotiate a comprehensive free trade agreement without having to extend the transitional period beyond the December 2020 deadline.
This will be difficult given that trade deals typically take years to negotiate.
The EU’s trade deal with Canada, for example, took five years to strike, while its deal with South Korea took four. The UK-EU deal also brings unique challenges as it involves the creation of new barriers to trade, rather than their removal.
Putting Brexit to one side, the new Government should present fresh opportunities for the business community of the North East.
Mr Johnson has promised his Government will repay voters who lent their support to the party by investing billions of pounds into the North of England. It is thought Chancellor Sajid Javid will use his first Budget to earmark money for the North coming from a £100 billion infrastructure fund.
If the Government makes good on this promise over the course of the next Parliament, it could provide a much-needed boost for North East businesses, which have been hamstrung for much of the last year by political uncertainty and a collapse of confidence in the marketplace.
Business leaders have urged the Prime Minister to make restoring confidence his number one priority.
“Restoring business, investor and consumer confidence – and firing up the economy – must now be the Prime Minister’s top priority,” says Dr Adam Marshall, director general of the British Chambers of Commerce.
Sharing Dr Marshall’s sentiments, Carolyn Fairbairn, CBI director general, adds: “After three years of gridlock, the Prime Minister has a clear mandate to govern.
“Businesses across the UK urge him to use it to rebuild confidence in our economy and break the cycle of uncertainty. Pro-enterprise policies on immigration, infrastructure, innovation and skills will help relaunch the UK on the world stage.”
A renewed focus on investing in infrastructure will be particularly crucial for the North East, says Barry White, Transport for the North’s chief executive, with the area having long lagged behind London and the South East for connectivity.
“The North has rightly been a key battleground in this election, with pledges made on improving our transport and creating opportunities,” says Barry.
“Now is the time to advance that Northern agenda in the national interest.
“We’ve been encouraged by promises to fully commit to Northern Powerhouse Rail and invest in our roads [and] we stand ready to ensure much- needed investment is delivered to help rebalance the UK economy.”
Adrian Waddell, chief executive of NE1 Ltd – which represents the interests of 1400 businesses in Newcastle City Centre – maintains the new Government owes a debt of gratitude to voters in the North East and highlighted the potential in the region for growth.
He says: “This region can provide an excellent return on investment. Now is the time to be ambitious, driving the Northern Powerhouse and taking action to invest in transport and digital infrastructure.”
North East property and tax specialists alike have also stressed the potential for growth in the local economy and feel optimistic about the region’s prospects for 2020.
Guy Harrington, chief executive of Glenhawk, says: “Finally some light at the end of the Brexit tunnel. This result is the tonic the real estate market’s been waiting for. Expect improved liquidity, greater transaction volumes, a strong pound and a bounce in the housing market.”
James Heathcote, associate director at Lancaster Knox, adds: “Political views aside, businesses are likely to be very welcoming of the new Government.
“Hopefully, this is now the turning point after three-and-a-half years of uncertainty and I think a lot of clients can start unlocking that investment that has been put on hold.”
There is clearly a feeling in the business community that a period of political stability, combined with promises to invest in infrastructure and support for the UK’s regions, could have a positive impact on economic growth, particularly in parts of the North East that have been held back in recent years.
But there are still huge question marks when it comes to Brexit, which, whether we like it or not, will continue to dominate headlines in the years to come.
Only time will tell whether a new dawn has broken.