Reshuffle to the right could be good for business

This week saw Prime Minister David Cameron announce the reshuffle of the coalition government. With tensions already tight between the Liberal Democrats and the Conservative majority, the media and the business world have been paying close attention to the changes to try and gauge the direction Mr Cameron is taking.

With a number of hardline Tories shifted to more prominent positions, it appears that Mr Cameron is comfortable giving the government a more noticeable lean to the right. Chris Grayling, for example, has been moved from his position as Work and Pensions Minister to Justice Secretary and Lord Chancellor. Meanwhile, Patrick McLoughlin, who served as aviation minister under Margaret Thatcher, will move from Chief Whip to Transport Secretary, marking a u-turn in policy and preparing the ground for an expansion at Heathrow airport. The role of Chief Whip will be given to tough-talking Andrew Mitchell - another Tory - who is to be moved up from his previous position as International Development Secretary.

At the start of the year, the government committed itself to delivering an economic environment conducive to helping small businesses. But as the final quarter of the year gets underway, what will this reshuffle for the business world? Well, the appointment of Patrick McLoughlin as Transport Secretary is a key issue here thanks to the short-term boost to the economy an expansion of Heathrow would deliver; something Mr McLoughlin is known to be in favour of.

Adding additional runways is likely to offer an immediate benefit to the economy by maintaining London's status as one of Europe's major hubs and driving business growth. Whether or not this boost will be long-lasting is unknown. Those opposing Heathrow's expansion have suggested developing reclaimed land around Essex as an alternative, something that could provide a longer-term growth plan simply due to the extra space it offers.

Meanwhile, Business Secretary Vince Cable is said to be “delighted” to have former Tory Deputy Chairman Michael Fallon join him in the business department. The appointment is predicted to bring an aggressive deregulation of the employment law and a significant reduction in red tape – something business owners and entrepreneurs will no doubt welcome.

Some of the business community's worst fears in this area revolve around the concern that the appointment of more Tories to prominent positions will extend fractures with the Lib Dems. This could harm the ongoing plan to cut the deficit and boost growth as action becomes muddled up with ongoing political rhetoric and debate.

However, if all goes well the reshuffle should give the government a stronger sense of direction and a tougher approach to taking the necessary action to return the UK economy to growth; something it sorely needs given the current concern regarding a return to recession.

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