Snap general election will cause uncertainty for business - channel reacts to May's election surprise

Short-term uncertainty could prevent customers making key buying decisions until after the outcome of snap election, tech industry onlookers claim

Tech and channel businesses have expressed fears that the snap general election which the prime minister called today will cause more uncertainty for businesses.

This morning, prime minister Theresa May announced that she will seek to hold a general election on 8 June - just seven weeks away, claiming it is the only way to ensure stability and certainty in the years ahead as the UK negotiates its way out of Europe. She insisted there is no turning back on plans for the UK to go ahead with Brexit.

But some channel onlookers fear that the exact opposite will happen, and businesses could suffer from customer uncertainty in the build-up to the election.

Lawrence Jones (pictured), CEO of UKFast, said: "Uncertainty is not good for business; businesses need stability and to know where they are going."

He said that when it came to the Brexit vote, customers slowed down their purchasing plans in the build-up.

"It was almost irrelevant if we were in or out with Brexit," he said. "The moment the decision happened, UKFast figures flew in the right direction. Everyone had been sitting on their hands and afterwards they were all saying the same thing: 'as soon as we knew, we had confidence'. So I think what is good is that it's a snap election and it will be done and dusted by June."

Ahead of the general election, the government enters what is known as purdah, a period of between six and eight weeks during which public sector organisations are forced to halt making certain decisions in light of a possible change in government. The snap election to be held in June is just over seven weeks away.

Vinnie Morgan, CEO of BookingLive, agreed that uncertainty will surely set in among customers in the short term.

"I suspect Theresa May thinks by calling this election, she will be creating more certainty around the Brexit process," he said. "But depending on the results, there could be a lot more uncertainty for British businesses and the tech industry in particular.

"Uncertainty is bad for business generally, but the tech sector depends on business and public sector bodies making investments for the future, and those investments tend to be postponed - very reasonably - when the future looks uncertain. It's a huge gamble, and for the next few months, uncertainty will only increase. None of this is good for the tech sector."

Michael Frisby, managing director of Cobweb Solutions suggested short-term uncertainty might be worth it in the long run.

"The call for a snap general election is a chance for Theresa May to win her own mandate and to deliver on the Brexit vote," he said. "Any business exec will say that a couple of months of uncertainty in order to secure longer term certainty and stability is a good thing. UK businesses, especially the IT community, crave long-term certainty. Of course, a decisive Conservative victory will provide a stronger negotiating position with the EU as the terms of Brexit are determined over the next two years."

Quocirca analyst Clive Longbottom said the picture may not improve for business even after the outcome is decided.

"At least it's a snap election so the period of uncertainty is minimised," he said. "The likely result will be an overwhelming majority for the Conservatives, so there will be a great deal more certainty after that. For the markets, that is good. For the country, it's an absolute disaster.

"It will give [May] a mandate for anything she can think of - further privatisation and looking at further cuts all over the place. But she will look after the large corporations. For the channel working with large corporations, it is good news."

UKFast's Jones added that he believes a Conservative majority government would be the best outcome for businesses.

"God help Britain if we end up getting a strange coalition dominated by Labour," he said. "Because it's an incredibly left-wing Labour that will crucify small business and grind down the momentum which is getting going. I think the Conservatives need to win if you're pro-business."