'Stability and predictability' for UK businesses as Conservatives form majority government

Stock exchanges and currency markets have responded positively to the announcement, which comes after a closely-fought election during which it was not clear whether any one party would send the largest number of MPs to the UK parliament in Westminster. The Conservative Party now holds 331 of a possible 650 seats in the House of Commons, while the Labour Party won 232 seats. The Scottish National Party (SNP) is now the third largest party represented in the UK parliament, after winning 56 out of a possible 59 seats in Scotland.

Alastair Ross, director of public policy at Pinsent Masons, the law firm behind Out-Law.com, said that a majority government should provide businesses and the international financial markets with "some of the stability and predictability" they had been looking for from the election. However, the prospect of a referendum on the UK's membership of the European Union, as set out in the Conservative manifesto, was an unwelcome one, he said.

"Businesses that were concerned by the risk of Scottish constitutional change now face another two years of uncertainty surrounding the UK's membership of the EU," he said. "A referendum could coincide with the UK's six-month presidency of the European Council from July 2017. While many organisations were cautious about getting involved in the politics of Scottish independence, there is already much more appetite to make a case for the UK to remain in the EU."

The loss of some Liberal Democrat ministers who had been particularly accessible to businesses during the previous coalition government would also be significant, he said.

"Ed Davey will be much missed by the renewable energy industry which will have concerns about a future Conservative energy secretary," he said. "Vince Cable in BIS and Danny Alexander from Treasury were very accessible for businesses too."

"The previous government's economic policy is likely to continue, with the expectation economic recovery and growth will also follow recent upward trends, but the concerns expressed by the Institute of Fiscal Studies and others on the Conservative manifesto commitments on taxation, borrowing and public spending remain. More detail is required," he said.

Banks and utilities would be particularly relieved with a Conservative government, rather than a Labour one, which would be "less likely to intervene in their businesses" given the parties' manifesto commitments, Ross said.

In its 2015 manifesto, the Conservative Party reiterated its commitment to "the most competitive business tax regime in the G20", and to opposing the Labour Party's plans to increase corporation tax. The party does not plan to increase VAT, National Insurance or income tax, but intends to raise the personal allowance and higher rate income tax thresholds and to reduce tax relief on pension contributions for the highest earners. It also intends to increase the inheritance tax threshold for married couples and civil partners, and to pursue its planned review of the business rates regime.

The party also intends to pursue its current policies on energy and infrastructure, in particular by delivering on the projects included in the National Infrastructure Plan (NIP). It intends to strengthen council tenants' 'Right to Buy' their homes, to build 200,000 new 'Starter Homes' for first-time buyers and to build 275,000 additional affordable homes by 2020. It also intends to finish plans to 'ring-fence' banks' high street branches from their investment arms by 2019, to keep the bank levy and to restrict banks' ability to offset their profits against past losses.

The Conservative Party's manifesto commits it to implementing £10 billion of annual government savings by 2017/18; increasing to £15-£20bn by 2019/20. The party intends to move more government services online, tackle digital exclusion and roll out cross-government technology platforms, as well as deliver better mobile phone and broadband internet connections. A new Scotland Bill, to be included in the first Queen's Speech and introduced in the first session of the new parliament, will implement the recommendations of the Smith Commission set up after Scotland voted not to become an independent country in September 2014.

"Alongside devolution of power to Scotland, we can also expect transfers to Wales and Northern Ireland, and to the UK's major cities which should generate major infrastructure investment and scope for additional taxation," said Pinsent Masons' director of public policy, Alastair Ross.

Details of the MPs appointed to the new cabinet will emerge shortly, and the new MPs will be sworn in at the House of Commons on Monday 18 May. The new government's legislative programme will be set out in the Queen's Speech, to be delivered to parliament on Wednesday 27 May.