The snap general election on the 8th June was a play to gain more certainty, effectively on a hard Brexit. Yet we have been left with greater uncertainty than ever. The Conservatives have the vote, yet not enough to form a clear majority in Parliament and, it appears, with no satisfactory prospects for a coalition. The prospect of another election and a new leader before the end of this year seems highly likely. The Brexit negotiations will begin during this period of flux – much of the political turmoil sits around what truly Brexit actually represents, and how we can best arrive at a sensible agreement with our neighbours.
A vote for change (or perhaps not)
In this case, the young have also spoken with what seems an unprecedented turnout – estimated at between 66 and 72 per cent among the 18-25’s. Theirs is a cry for more opportunity and for better distribution of wealth, and a push against austerity. In the end, this is also a vote for business and opportunity. We must strike a balance between the needs of the economy to create opportunity and our desire to control immigration. A central question, perhaps, is did we actually want Brexit or did we just want to halt immigration? Our European neighbours didn’t want us to leave and still don’t – so maybe the question taken back to Brussels should be around how the UK can’rejoin’. How can we stay yet have more say? In essence, this is no different to the deal David Cameron sought before the EU realised we were serious.
What now for businesses?
This is a time of flux for the UK, with an ageing demographic and a lack of opportunity for young people. In the end, the true fix must be to put the economy and business first. Business has a key part to play in the country’s future; its voice must be heard. Where is the support for small business, and how can we create an environment where small companies can become the next big employers? It’s telling that neither party campaigned around this.
Perhaps a hung parliament is a good thing: it creates transparency and supports what most of the business world is looking for – i.e. either no Brexit or at least a softer version than the version Teresa May was proposing. So how does this affect mergers and acquisitions (M&A)? Historically, there is a proven correlation between uncertainty and reduced M&A activity; however, UK businesses have been living with political uncertainty for some time and are increasingly hardened against it. Moreover, the current business change trends that we’re seeing are even more dynamic than the political.
Companies are facing a host of challenges: cross border, technological and accelerated innovation. Facing the prospect of slow organic growth, leaders need to stay focused and invest to secure tomorrow. Strategic M&A deals create new market offerings, reshape competition and lead to efficiency. This creates opportunity and, ultimately, economic growth. Now is the time for us, as entrepreneurs and business owners, to hold our nerve, while, as a society, we must attempt to provide transparent answers to some of the bigger questions that we face.
About the author: Kevin is founder and Chairman of Avondale Group a leading international mergers and acquisitions boutique founded in 1991. Kevin utilises his extensive business experience to help others, be it organisations or individuals through mentoring, speaking engagements and writing.
Kevin is the author of two books: ‘How to Buy and Sell a Business for Wealth,’ and ‘Navigating the Rivers of Cash.’