Business groups call for stability as Johnson resigns

UK businesses have called for stability after Prime Minister Boris Johnson resigned as Conservative leader and the race to find a successor began.

The CBI said the "political vacuum" needs "to be filled at speed to protect people's living standards".

The Institute of Directors warned "what business hates most is uncertainty and instability".

Mr Johnson has said he intends to stay on as prime minister until a new Tory leader is chosen.

But it is not yet clear when that will happen.

On Thursday, Tom Tugendhat, chairman of the Commons foreign affairs committee, launched his bid to replace Mr Johnson, saying "taxes, bluntly, are too high." He joins Attorney General Suella Braverman who has also thrown her hat in the ring.

Some MPs and business leaders suggested he should go sooner rather than later to allow a new administration to try to tackle the sharpest rise in the cost of living for 40 years, which millions of UK households are struggling with.

Business Secretary Kwasi Kwarteng tweeted that a a new leader was needed "as soon as practicable".

"Someone who can rebuild trust, heal the country and set out a new, sensible and consistent economic approach to help families," he said.

Richard Burge, chief executive of the London Chamber of Commerce and Industry tweeted: "I believe it is wrong for Boris Johnson to continue as interim PM. He has shown no contrition about his behaviour and judgement, and cannot (or will not) change his character. Both are damaging to our international trading reputation, and to London as the world's greatest city."

Lord Rose, the chairman of Asda, the former boss of Marks & Spencer and a Conservative peer, said: "This has been too long in happening and it is unsustainable to continue with a hamstrung, lame duck prime minister into the autumn."

According to The Guardian, he also said: "There doesn't seem to be anybody dealing with the serious issue of the economy. This political crisis has hamstrung everything."

And former prime minister Sir John Major wrote in a letter to the backbench 1922 Committee: "The proposal for the prime minister to remain in office - for up to three months - having lost the support of his cabinet, his government and his parliamentary party is unwise, and may be unsustainable."

'Business confidence'

In his resignation speech on Thursday, Mr Johnson said: "I've agreed with Sir Graham Brady, the chairman of our backbench MPs, that the process of choosing that new leader should begin now and the timetable will be announced next week."

Tony Danker, director general of the CBI business lobby group, said: "We now need the political vacuum to be filled at speed to protect people's living standards, through action on business confidence, investment and growth.

"Getting the economy growing again has got to be the number one focus for all politicians."

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Kitty Ussher, chief economist at the Institute of Directors, the UK employers' group, said: "What business hates most is uncertainty and instability, which heightens the sense of external risk. Having said that, we recognise that this is an issue for the Conservative Party to resolve.

She said that government's priority "must be to give businesses the confidence to invest".

But Craig Beaumont, external affairs chief at the Federation of Small Businesses, told the Financial Times: "We have had no solutions to the problems facing businesses and now the worry is there will be a further delay."

Mr Johnson has also appointed new members of the cabinet following a slew of ministerial resignations in the last 48 hours. He said the cabinet will "serve, as I will, until the new leader is in place".

Greg Clark, the former business minister, has been named as Levelling Up Secretary to replace Michael Gove who was sacked by Mr Johnson on Wednesday evening.

Tough times

Mr Johnson had already named Nadhim Zahawi as the new chancellor on Tuesday evening following the shock resignation of Rishi Sunak.

And on Thursday Mr Johnson hinted heavily that there may be tax cuts - an issue that he and Mr Sunak had previously clashed on.

He said a new leader would be "equally committed to taking this country forward through tough times".

"Not just helping families to get through it, but changing and improving the way we do things, cutting burdens on businesses and families and yes, cutting taxes, because that is the way to generate the growth and the income we need to pay for great public services."

Writing in the Daily Telegraph newspaper, leadership hopeful Mr Tugendhat wrote: "We should immediately reverse the recent National Insurance hike and let hard-working people, and employers keep more of their money. Fuel tax must come down. And un-conservative tariffs, that push up prices for consumers, should be dropped."

The pound rose earlier on Thursday as news broke that Mr Johnson would step down, though ticked back to $1.1964 in the hours afterwards. Investors have been concerned about recession around the world as energy prices continue to soar, and about UK economic stagnation.