Monday, 2 February 2015

The odd politics of business

Politics is a funny old business. What used to be the populist wing of Britain’s Conservative Party, often appealing to the working and lower middle classes and now at the core of Ukip, don’t want David Cameron to remain as prime minister after the General Election on May 7. The former ultra Blairite wing of the Labour Party – as voiced by Messrs Mandelson, Hutton and Milburn – don’t appear to want Ed Miliband to become prime minister. And almost nobody wants Liberal Democrat Party leader Nick Clegg to be anywhere near the next prime minister, although he says he doesn’t mind who is prime minister as long as they give him an important job in the Cabinet.

Meanwhile the politics of business is itself becoming funnier as polling day approaches. All the main business lobby groups claim to be politically neutral but have a default bias toward centre right parties and only favour centre left parties that seek office by claiming to be business friendly. Sometimes the mask slips, as it did last week when the head of the Institute of Directors made clear that his nightmare scenario is a Labour led government in coalition with the Greens and SNP. Despite this the big corporations usually try to keep their heads down – realpolitik requiring them to be prepared for every political eventuality – albeit individual business figures, especially those who provide financial backing for one party or another, tend to come out in open support of those they favour.

Yesterday, however, saw an exception to the rule when Stefano Pessina, active chief executive of high street retailer Boots (‘the chemist’) told a leading Sunday newspaper that the Labour Party’s current policy agenda was “not helpful to business, not helpful for the country and in the end it probably won’t be helpful for them.” “If they acted as they speak”, Mr Pessina went on, “it would be a catastrophe.” If one were being generous it might be possible to view Mr Pessina’s comments as well intentioned advice to Mr Miliband to change his policy stance ahead of the Election so as to gain business support which might help win votes. But given that Mr Pessina does not criticise any specific Labour Party policy, nor offer Mr Miliband a clear new prescription (no joke intended!) it’s hard to interpret the comments as anything other than an attempt to undermine Labour's chances at the ballot box. Indeed Conservative figures immediately took advantage of the situation by branding Labour the 'anti-business party', and there is talk of other top business leaders also preparing to put the boot in. 

This is interesting in part because it appears that Mr Pessina is using a position of potential influence to attempt to exert political influence regardless of what might or might not be the views of the various stakeholders in his business. Should we view the comments of a boss who neither lives or pays tax in Britain as representative of Boots employees or customers, as if to suggest that the next time we pop into one of Mr Pessina’s stores to purchase a seasonal flu remedy this might come with additional medicine to treat this or that public policy ailment. But more important is the widespread response to Mr Pessina’s words which seems to be that they must be sensible simple because he is an important business figure.

Mr Pessina is presumably very good at this job, as presumably are others in similar positions. But this does not necessarily make him an expert on public policy or well informed about the evidence upon which good policy is best based. The likelihood is that Mr Pessina’s view, and that of other business people and their representative bodies, is a reflection of vested interest, even if also based in part on a mix of personal experience, personal ideology, or evidence. Such views deserve to be given no more or less weight than those of any other vested interest, including trade unionists, environmentalists or church leaders who may well be equally vociferous in the coming months, and insofar as they are listened to should always be subject to the acid test of hard evidence to support them.

Political debate is all too often conducted as if the only economically sound policy mix is that deemed to be business friendly, on the unwritten assumption that this always equates with what is in the national interest or that most likely to maximise the common good. It might be at times but experience suggests that this is rarely the case, as is likely to hold true for any policy mix designed to pander too heavily toward one vested interest or another.

Seldom in British history have successive governments, centre right and centre left, been more business friendly than those in office in the past three and a half decades. The resulting predominant policy mix has been one of extremely light business regulation, with taxation kept low enough to just about fund the key public infrastructure firms need to underpin the profit making process. Has this helped make our economy more stable or productive, our society happier and less unequal? It’s up to each of us as individuals to decide how to answer these questions, which should at the top of our shared policy objectives. But at the very least, when it comes to assessing how beneficial uncritical acceptance of the odd politics of business is to the common good of British society the jury must surely be out.                   

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