The declaration of a hung parliament but with a Conservative party government is good news for the economy and businesses because the likelihood of a ‘hard Brexit’ has suddenly been reduced because in order to survive, the government will require support from opposition groups. Given the opposition parties are all but wholly united on a ‘soft Brexit’, the policy of the previous government could be about to change radically. The change makes the possibility of the UK buying access to the single market and passporting much greater than has been the case since the EU referendum concluded.
A problem with majority governments, especially those with a large majority, is the degree of scrutiny legislation is subjected to. Compared to the Labour party, the Conservatives were in possession of the best policies for enabling business to prosper, but that did not stop poor policies being put before the electorate. A hung parliament with a Conservative government should provide more business orientated policies than a Labour government would but with much greater scrutiny. The most egregious elements of Conservative policy, therefore, will have to be expunged for the government to get legislation through parliament. Ultimately, businesses should fare better under this government than they have in recent times.
Given the poor record of majority Labour and Conservative governments over recent decades of providing infrastructure with the required investment, a hung parliament should be beneficial to projects such as Crossrail 2. Both leading parties claim to support the project but the last government failed to provide concrete support. With opposition parties able to influence government policy to a much greater extent now than in the past, large-scale projects are now able to realize the full extent of support within parliament. A better political environment for big projects will help the UK businesses in the long-term.