Richard Patient is an entrepreneur, and founder of property communications company Thorncliffe | Your Shout. He was London Chairman of Business for Britain during the EU referendum.
It will surprise no one to learn of the antipathy towards the Confederation of British Industry held by Dominic Cummings, given the well-publicised stunt at the CBI conference four years ago. Then Vote Leave portrayed the CBI as the ‘Voice of Brussels’, in a dig at the Confederation’s then (and since dropped) slogan ‘Voice of Business’.
What may come as a surprise to some is the general scepticism towards the CBI of many high-ranking advisers in Number 10, and not just among the Vote Leave alumni.
Of course, the CBI was never the Voice of Business, merely the voice of its members, and it remains a well-funded and still well-respected lobby group. The fact that the Prime Minister chose its conference for a major speech will be a source of contentment for their bosses, but is mainly due to the media pack being there rather than any general good-will towards the organisation.
Number 10 knows that when Labour attack big business, it is onto something. Our new voters, those from the working class constituencies that the Tories will be relying on to form their majority, at not just this election but also the next, still recoil from the 2008 banking crisis when the banks feathered their nests at the expense of the rest of us.
These voters know that homes are too expensive, yet see Persimmon bosses awarding themselves over £100 million bonuses. They see private companies recoiling from risk, but taking the profit, in the case of PFI hospitals and Carillion. And they see high streets failing, whilst the big e-commerce companies like Amazon offshore their profits to other countries.
That’s not to say the Tories are not the party of business – they are, and always will be. Business continues to fund much of the Conservative Party – but go to dinners such as the Carlton Club political dinner this week and you will find there is a massive leaning towards entrepreneurs, those who have started their own business or who lead their companies to make them world-class.
Take Ben Elliot, the Co-Chairman of the Party, who not only started his international luxury lifestyle company Quintessentially, but is also a non-executive of another British success story, YouGov. Look at Peter Cruddas, a former Party Treasurer – the son of a Smithfield Market worker, he founded CMC Markets and is also a major philanthropist. Or Anthony Bamford, who still runs the award-winning and acclaimed JCB.
What Number 10 knows is that big business will always lobby for special privileges for this market or that. Of course they will always couch the argument in terms of quality, standards or safety. They have been very good at that, particularly within Brussels and the Single Market, which imposes standards for all irrespective of the good for each country or market. Coming out of the EU and driving trade deals with other countries will halt some of the inexorable demand for new regulations, and over time will reduce burdensome regulations in the UK.
Not so long ago, SMEs and companies smaller than 20 employees – which constitute a massive proportion of the UK economy – were shielded from much of the regulation that faces large companies. Now, all companies face the same legislation, so a company with five employees has to face the same burdensome laws as a company with 20,000 employees. Of course larger companies prefer this, as they can employ armies of compliance officers, HR teams and environmental health officers, whilst the MD of the small company has to be a master of everything.
That’s not to say regulations on quality, standards or safety, will go down. They won’t, and the Government has made that plain in terms of environmental and employment criteria. That also fits in with their need to keep long-term the once-Labour voters that they appear to be winning during this election. In some cases, pressure from new voters will mean the Government will impose higher standards, and intervene more. But if they do so, they should remember that they are imposing burdens not just on the larger businesses that can cope but also on the smaller ones that find it harder.
Over the past 30 years, it has been easy for ministers to take regard of the voices of the CBI and their members. They are the ones who employ lobbyists and they are the ones that find it easier to gain an audience with politicians, both Labour and Conservative.
But the general direction of many in Number 10 is to widen out this reach. Take housing, where a revolution needs to take place. We’re likely to only be able to build the number of homes we need if the Government makes it easier for smaller companies to become major players in the market.
Look at procurement, too. The Government faces a choice soon as to whether it replicates the OJEU regulations, or makes the system much less onerous, open to a wider pool of companies. Or take ecommerce, where a tax system needs to be devised to help smaller companies compete.
There are senior people in Downing Street who understand all of this, some of whom have come from big business themselves and who now want to turn gamekeeper. The CBI will have to work harder and smarter if it wants to retain its once formidable influence.
The Conservatives have always been the party of the entrepreneur and the smaller business. What better way to show this than to go after these SMEs and smaller entrepreneurs and form an army that will help give an intellectual backing and funding to the party as it prepares the big battle towards the next election in 2024.