Business leaders have called for immediate action on skills shortages and demanded an improved trade relationship with the European Union.

Jonathan Geldart, director general of the Institute of Directors said that “in order to reignite economic growth, the new government must urgently address some key challenges”.

He said: “Labour and skills shortages are persistent issues for our members.

“An industrial strategy which unlocks private investment is needed in order to build long-term confidence in UK economic competence and stability.

“The new government is rightly committed to embedding higher standards of conduct and ethics into public life. It is equally important that the UK business community regains the esteem of wider society. We hope that the new government will work with the IoD in making the UK’s corporate governance framework fit for the future and help it roll out our planned code of conduct for directors.”

READ MORE: 

Sir Keir Starmer becomes Prime Minister after Labour landslide

Labour landslide but Keir Starmer boxed in on economy

In full: Prime Minister Sir Keir Starmer’s Downing Street speech

Mags Simpson, interim CBI Scotland director, said that “delivering sustainable growth should be the defining mission for the new government”.

She said: “The new Prime Minister has been given a clear mandate to take the tough decisions needed to get the economy firing on all cylinders. What firms need now is a government that’s ready to hit the ground running and is laser-focused on delivery.

“Households and businesses across the UK have shown incredible resilience through Brexit, Covid and war in Europe. With the economy picking up steam, now is the moment to get behind growth. Setting out a positive vision for the UK economy and leaning into our international leadership should be top priorities for the first 100 days.”  

Colin Wilkinson, managing director of the Scottish Licensed Trade Association, said the General Election “presents us with an opportunity to reiterate to the new UK Government that the licensed trade and hospitality sectors really do need some help”.

He said: “We particularly highlight the need for the UK Government to reduce VAT for licensed hospitality businesses. The temporary reduction of VAT from 20% to 5% introduced in July 2020 gave support to around 150,000 businesses in the UK and protected over 2.4 million jobs in the overall hospitality and tourism sectors and saved many businesses from going under during a very difficult trading period.

“While we are now past the Covid-19 pandemic, the unprecedented rises in inflation, business operating costs – particularly food and energy costs – and severe staff shortages mean that the current trading conditions are seen as just as challenging, if not more challenging, than during the pandemic.

“For many businesses, a cut in VAT would have an immediate, positive impact on sustaining business viability, maintain job security for over 228,000 people who work in the hospitality sector, and provide new jobs in a sector which is a key driver of Scotland’s economy, supporting £1.6 billion of economic activity.”

“It would be proportionate, easy to administer and would bring the UK into line with our European neighbours, improving our competitiveness in attracting both domestic and foreign visitors.”

He also called for rethink on business rates in Scotland.

Liz Cameron chief executive of the Scottish Chambers of Commerce, said that "now the election is over, the real work of government must begin and that means supporting job creation and enabling Scotland to remain ahead of the game in global competitiveness".

“We need an ambitious programme of pro-enterprise and pro-growth policies, but without urgent action, the opportunity for positive change clearly mandated by the electorate will be wasted.

“Now more than ever we need our leaders at Holyrood and Westminster, and our new Scottish MPs, to work together to put the economy and growth at the forefront of all policy discussions to ensure that Scotland remains prosperous for all.”

Stephen Montgomery, director and spokesperson for the Scottish Hospitality Group, said:  “We would now encourage Sir Keir Starmer to immediately start putting in place the promises made in the Labour Manifesto, and bring forward his party plans for Brand Scotland, which hospitality will play a major role in.

“Immediate concerns are around issues such as VAT for hospitality, and labour shortages, where we would welcome discussions on a working visa for hospitality workers.”

Shevaun Haviland, director general of the British Chambers of Commerce, said: “The public have delivered them a clear and decisive parliamentary majority – hopefully they will use this mandate to provide the stability and certainty businesses crave.

“How we revitalise our economy was hotly debated throughout the past six weeks, and it is encouraging to see they have many policies which clearly align with our recommendations.

“But after a gruelling election the really hard work starts now. We need to see action from day one on pulling together a coherent industrial strategy for the long-term, which places a strong emphasis on harnessing green innovation. 

“Closing the skills gap, growing exports, boosting productivity and harnessing the power of AI won’t happen overnight. 

“Businesses will also want to see early movement on pledges around business rates reform and improving our trade relationship with the EU.”