View: Business faces 'perfect storm' of global and domestic uncertainty

There is an old maxim, that business hates uncertainty. Of course, the reality is much more nuanced, with uncertainty also creating the climate for innovation, and commercialisation of the developments that flow from it. Uncertainty is writ large at present, with business facing challenges from many quarters – international, national and local. On the international front there is the ongoing war in Ukraine and the more recent conflict in Iran and the wider Middle East, both of which have distorted energy markets, wider stock markets, and supplies of commodities, fertilisers and much more. Then there are the shifting sands of relations with the United States which are seeing tariffs imposed or threatened as a lever in pursuit of unilateral US interests. The decades-old US commitment to NATO is also under question, presaging a change in balance if not a split. And there have even been threats to take sovereign territories by force in an expansionist world view. Closer to home, relations with the EU continue to apply pressure and challenges for businesses, through the introduction of the EU Deforestation Regulations and the Carbon Border Adjustment Mechanism; the incoming Product Liability Directive; the much-vaunted SPS deal between the EU and the UK which was due to be announced at a summit on 22 July but which has now been postponed due to the demise of the Starmer premiership. On the Westminster stage political uncertainty is adding to the pressure on business, with expectations of the seventh Prime Minister in a decade and an associated reshuffled Cabinet, the possibility of a new economic direction, and even the prospect of yet another General Election. Aspects of previous Budgets have been playing out, with hikes to Employers National Insurance and Minimum Wages; cuts to Business Asset Disposal Relief and Farm inheritance relief; freezing income tax and National Insurance thresholds until 2031, a 2-percentage-point increase on dividend, property, and savings taxes; a new National Insurance charge on salary-sacrificed pension contributions; and owners of properties valued over £2 million now facing an annual recurring charge. And at Stormont there are Bills and proposals that, were they to prevail, would cause the deepest damage to businesses. Key amongst these is the Employment Rights Bill. We understand that some measures in the Bill, which is yet to be published, are an entirely reasonable updating of employment laws that have failed to keep up with those in GB because of Stormont’s two collapses in the past decade.

However, some of the measures that are proposed would see the most far-reaching Trade Union powers anywhere in the world creating access for the Unions into all businesses, including the very smallest, with the owner being given just 48 hours to respond to a request for such access before it would convert into “deemed consent” for access. And there is another proposal from the Trade Unions to introduce a Severe Weather Act which would provide for four days of annual ‘Severe Weather Leave’ for employees. The underlying thread is that ‘rights and resources’ would be transferred from those entrepreneurs who have taken the risk to start and grow a business to others who have not. This should strike fear into all of us who put a value on a free, dynamic economy that creates jobs and wealth for many, with SMEs employing more people than all large businesses and the entire public sector combined.

An ideological lurch to move ‘rights and resources’ away from the wealth creators, especially without having involved them in any aspect of the development of the proposals, moves the concept of ‘uncertainty’ to an entirely new paradigm and risks destroying the entire business ecosystem. There is an ancient fable about a man who teaches his donkey to live without food by gradually decreasing its daily intake. When the donkey finally starves to death, the foolish owner laments, "Just as I had trained him to live on nothing at all, he died!"

We must all guard against a political equivalent - meddling in the operations of businesses and the economy in pursuit of one objective without genuine, considered and thoughtful understanding of it potential downside risks.