James Ashton: Champagne corks were popped in the City – but EU vote brings uncertainty

The City knows which side its bread is buttered: relief was palpable in equities, sterling and gilts

Relief at the return of Osborne and Cameron was palpable in the City, but there is still plenty of work to do (Getty Images)

Let us finish the job, the Conservatives were imploring us for months. It was a dangerous message, not least because of the tacit admission that the Coalition had not managed to fix the broken economy at the first time of asking.

It doesn’t matter now David Cameron and George Osborne have a clear mandate to give it another go, but their position this weekend is all the more surprising given that their economic story – that the UK is firing on more cylinders than most developed nations – was badly told during the campaign. So much so, the nervous chief executives I encountered on the party circuit on election night were drowning their sorrows at the prospect of a Labour-led administration – before the exit poll and popping champagne corks afterwards.

The City knows which side its bread is buttered: relief was palpable in equities, sterling and gilts. But very quickly, attention turns to what finishing the job actually looks like. One of the tasks is further reducing the deficit, a task that Mr Osborne fell behind with last time, and we also need business rates reform and a new, decisive chapter in the saga of airport expansion in the south-east of England. These are cans that can’t be kicked down the road.

A still bigger story is Europe, with Mr Cameron’s pledge to hold an in-out referendum on EU membership presenting a risk that business leaders rather wasn’t taken because of the uncertainty it breeds. I would have expected that business would be calling for a fast-tracked vote, but the CBI director-general John Cridland wants Mr Cameron to take his time. He reasons that the new Government needs to package up what it can deliver in terms of EU reform without the need for treaty change. Mr Cridland cites areas like the creation of a single digital market as offering huge upside for British companies.

That’s fine, but don’t take too long. Once the election euphoria has faded, it will soon become clear that the UK’s future in Europe remains a far bigger concern for investors than what happens next to Greece.

Vince Cable was a rock of stability for British business

I can’t help feeling a pang of regret at the ejection of Vince Cable from his Twickenham seat. As business secretary he was an acquired taste, particularly in the City, after he jousted with banks over the need for reform following the financial crisis.

However, he found fans among manufacturers for his efforts in introducing more long-term thinking into the business culture and zeroing in on our world-beating industries, including automotive and aerospace. Few would disagree with what he says remains in the in-tray for his successor: finding ways to boost productivity, increase exports and improve vocational training.

Vince Cable had his admirers among manufacturers (Getty)

When I interviewed Mr Cable in March as parliament dissolved, he said the collapse in Liberal Democrat support had all been worth it because forging a coalition “was part of the growing up for the party that had to happen”. It is hard to hold to that view now.

However, the business world benefited immeasurably from having an unchanged business secretary for an entire parliament. Let’s hope that the departmental door does not start revolving again, as it has under previous Conservative administrations.

Never mind the afterlife, what about the life before politics?

When you’re finished as an MP, head into business. Our newly unemployed politicians can comfort themselves with the prospect of board roles coming their way.

Business and politics rarely mix well, with conflicts of interest to be tiptoed around, but a steady stream have still managed to make the switch. Michael Portillo went to BAE and Patricia Hewitt was a non-executive director at BT, while another who has reincarnated herself is Virginia Bottomley, now an Odgers Berndtson headhunter.

But as Ed Balls et al consider the political afterlife, we should not forget that what comes before Westminster is more important. Still too few of the Commons intake have held down what is called a “proper” job before answering their political calling. The former Cabinet Secretary Lord O’Donnell is a fan of open primaries, which encourage people without political affiliations to stand for parliament. If that gets more entrepreneurs into the Commons, it should be thrown into the mix of reforms.

Politicians should be grateful they don’t have shareholders

It has been camouflaged somewhat by political goings-on, but I am glad to see the AGM season has not lost its bite. No matter that the shareholder revolt petered out at Alliance Trust when the company bowed to some of the wishes of its activist investor. It is good to see that the forum for holding company directors to account, face to face, still thrives. Annual meetings have much in common with election hustings – except they happen every year.

They are occasions when chairmen are reminded who they work for. If that makes them squirm a bit, all the better. The Trinity Mirror chairman David Grigson was forced on to the back foot the other day when a former Sunday Mirror journalist accused him of “not being straight” with shareholders over phone hacking. And Peter Erskine was rightly given a rough ride for the woeful share price performance of Ladbrokes on his watch. How fortunate he had already decided to step down. Given that the bookmaker faced a huge pay rebellion, he might have been pushed if he hadn’t jumped.