The relationship between the Conservatives and business is said to be in a poor state. Brexit is, of course, at the heart of the problem. But over the course of the last couple of years, mainly under Theresa May, the Conservatives have moved rhetorically against business as they’ve attempted to address perceived public concerns about the lack of fairness in the economy and businesses’ role in that.
There’s no getting away from the fact that many (but not all) businesses want Britain to stay in the EU – and there’s a limit to what the Conservatives can do to soothe their concerns. As long as the Government prepares to leave, some businesses are going to speak out against them and publicly consider changing their operational plans. But many of the problems between politicians and businesses result from a lack of understanding about each other – how the other works, their respective skills and the demands that fall upon them. These are visible during the Brexit negotiations, but they’re also visible on practically every major issue.
Let’s look at this from the politician’s point of view first. Here there are two common misunderstandings about business. The first is they think businesses are fundamentally unpopular and are therefore to be publicly tamed. Politicians think nothing of publicly criticising businesses and proposing action that will dent their profits in the name of the public good. In reality, generally speaking, businesses are held in better regard than politicians on most issues and, in many cases, genuinely respected by the public – even the biggest businesses. Think of the loyalty that the public show some of the largest retail brands. Incidentally, as I’ve indicated before, people’s concerns about Brexit are such that they’re now worried more than ever about politicians failing to create a positive enough climate for them to grow sufficiently.
Secondly, politicians have it in mind that, while many have strong views on Government policy (which they occasionally voice), they don’t have usually have meaningful policy expertise. From the viewpoint of politicians, businesses will give specific technical answers when asked, for example in Government consultations, but otherwise they just get on with their day job. In truth, businesses have vast policy expertise on an array of issues – from taxation to immigration to customs payments. The fact this misunderstanding exists is partly down to Government politicians and officials not asking the right questions of businesses, but it’s also down to the fact that too few businesses volunteer detailed policy suggestions (for reasons I explain below).
Now let’s look at the problem from businesses’ point of view: three main misunderstandings persist. Firstly, businesses understate the impact of electoral politics on Government ministers’ decision-making. Because they are used to dealing with the official, non-partisan machinery of the state, with its self-conscious emphasis on neutrality, many businesses forget that departments are ultimately run by ideologues and partisans who are desperate to maintain power. They’ll do whatever they think will be good for them in the polls. So, those businesses that make recommendations like the need for a highly liberal immigration policy, or a radically more liberal planning system, aren’t living in the real world.
Secondly, as I’ve described before, businesses overstate the policy expertise that exists within Government departments. Many assume the masses of civil servants in roles with “policy” in their job title are actually devising policy in the way a think tank might. In reality, very, very few officials are expected to do this or indeed can do this. Instead, real policy expertise is scattered around think tanks, backbenchers and advisers. Civil servants are primarily focused on problem solving related to implementation. This means that many businesses stay out of the policy-making game and instead spend their time complaining that the Government have messed up and not listened. Businesses should realise that they’re the real experts in many areas (taxation, immigration, regulation etc) and put their own plans to Government.
Thirdly, and this is related to the point above about ignoring electoral politics, businesses often ignore the demands of the wider political scene. Because they’re so focused on their own particular sector, and therefore on the policymaking that affects their sector, they can often fail to see that Governments just sometimes have to deal with other issues. The classic example is healthcare – and many are set to be surprised and disappointed when the Government either fails to heed their calls for tax cuts and/or higher spending on specific areas, because all the money has gone to the NHS.
The relationship between politicians and businesses would actually be better if it was a little more permanently combative. If businesses got stuck into policy debate more forcefully, politicians would welcome and benefit from the input of their expertise. There would also be less out-of-the-blue attacks from businesses, which always irritate politicians. And if politicians more systematically questioned businesses about how things really work in the real world, they’d be making better policy in the first place.