Liz Truss resigns as prime minister: the industry reacts

21 October 2022, 08:32 AM
  • After just 44 days in office, prime minister Liz Truss is stepping down, leaving the country in a renewed state of uncertainty
Liz Truss resigns as prime minister: the industry reacts

Yesterday afternoon, Liz Truss announced outside Downing Street that she is resigning as prime minister and will step down after a week-long emergency contest to find her successor.

Speaking to the country, she explained, “This morning I met the chairman of the 1922 Committee, Sir Graham Brady. We’ve agreed that there will be a leadership election to be completed within the next week. This will ensure that we remain to deliver our fiscal plans and maintain our country’s economic stability and national security. I will remain as prime minister until a successor has been chosen.”

For some, this news may have come as a relief, after her chancellor’s mini-budget caused the value of the pound to plummet and tax cuts did little to help struggling small businesses.

But this means that the UK is due to have a third prime minister in just three months, and the fine food and drink industry is concerned with how this uncertainty will affect retail in the crucial golden quarter. 

A need for stability
Jeff Moody, commercial director of the British Independent Retail Association (BIRA), highlighted, “What small businesses need now more than ever is stability in the government so they can plan for the future.

“Retailers are now seeing real sales declining even with much higher prices masking the volume drops previously. Consumer confidence is at an all-time low, so BIRA is calling for Conservative MPs and members to make a quick and correct decision enabling the government to focus on the urgent needs of the economy.

“Businesses need certainty so they can plan, and consumers need the confidence to start spending again – both can be achieved if the government starts to give real clarity now.”

This feeling was reflected by Martin McTague, national chair of the Federation of Small Businesses (FSB), who added, “It is incumbent upon the next Conservative Party leader to show they can provide stability and take the necessary steps to secure economic growth in the face of significant recessionary pressures. 

“Businesses are crying out for an end to the political turmoil and a focus on remedying the economy, supporting small firms through the hard winter ahead.”

For Mark Kacary, managing director of Norfolk Deli, this is all too real. He explained, “What this means for small businesses like ours is that we now wait for another seven days (minimum) to understand who will be leading the country, probably another two weeks to understand what their policy and their strategy will be, and what that then means to how or if small businesses can expect any support or if they will be expected to close their doors for good in the new year.

“Ideally, I would hope for a general election. I know this means more instability, but to gain stability I feel the public deserves to have its say and opinion heard on what they think of this government’s achievements over the last 12 years.”

Simon Jones, co-owner of Forest Deli, agreed, “We need a general election and it’s as simple as that really – but, that will mean months with no government and total uncertainty on every aspect of business and bills.”

The next prime minister
With a fierce battle for Number 10 now on, Britain’s next prime minister will have the difficult task of restoring the industry’s faith in the government.

As Martin explained, “Whoever becomes prime minister must knuckle down, see through the delivery of the energy support package for small businesses – as already approved by parliament – and the reversal of the hike in national insurance.

“Beyond that, there must be a focus on securing prosperity for the longer term, making sure we have the right support for improving broadband, housebuilding, labour supply, and the tax and regulatory framework – so we can build our way out of the increasingly negative economic climate.”

Jeff added, “Quick and proper decisions on reforming Business Rates, Levelling up and Tax reform will also help the retail economy plan, survive and prosper, fuelling economic activity.”

For Simon, action needs to be swift and decisive. “Retail and hospitality are in a very precarious place, and the run-up to Christmas is going to be tough. Q1 next year is going to be brutal, as inflation isn’t going away, and costs are only going to increase.”

Mark agrees. “To impose whatever is needed to create a sense of stability in the market a sense that they have some idea of what they are doing and to rapidly listen to the various bodies who will all tell those in power that unless they want to see a glut of businesses close, they need to provide some assurances that there is support available and to spell out clearly what this means for the long term. 

“I feel that if businesses and business owners knew exactly what to expect in terms of costs and taxes as a consequence of being able to remain open, they will accept it, and find ways to work with it. What is totally unworkable is a mini-budget one week, and two weeks later that budget being scrapped, followed by a leadership vacuum”, he concluded.

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