The relationship between business and politics is a topic often met with cynicism. The Convservatives are criticised for being in the pockets of wealthy businessman, many of whom contribute heavily to their party coffers.
Labour, on the other hand, was accused at the last election of being too “anti-business” for not doing enough to understand the needs of employers.
Getting the balance right is a challenge faced by all politicians and, as transparency increases and the public look on aghast at what appears to be corporate tax avoidance on an industrial scale by global companies, the issue is getting more attention once again.
At a basic level, the reality is that dialogue and mutual understanding between business and politics is essential and inevitable. Businesses are the drivers of the economy, employing people, paying tax and delivering so many of the services on which we all rely.
And so long as businesses are taxed, regulated and asked to make a positive contribution to society, there will always be the need for business insight to explain what the implications of decisions made by politicians may be. There is sometimes a view amongst the public that politicians live and work in their own bubble and that they are out of touch with the world that surrounds them. In my view people who run businesses are well placed to bring politicians down to earth and give them insight into the real economy.
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Of course, the relationship is a two-way street. Businesses rely on the government’s support network particularly for trade and investment, and there is a lot government can do to help businesses grow, helping them to employ more people and raise more tax revenue. These aspirations are in everyone’s interest and have been the foundation for Britain’s economic development for a very long time.
A good example is skills policy and apprenticeships, an area I have been delighted that Sadiq Khan has put at the heart of his mayoral campaign in London. Money spent on education, promotion of work orientated skills in the curriculum, and government effort to expand apprenticeships combined to better equip young people for the jobs market. This benefits everyone. Getting the skills system pipeline right is vital for the future wellbeing of the economy and a common objective for both business and politicians. In areas such as this, it’s perfectly understandable why politicians would aim to be more “business friendly”, indeed, it is a social as much an economic objective to do so.
There are however legitimate concerns that the relationship between politicians and multinational businesses in particular has become too cosy. The understandable ambition of politicians to make the UK the most attractive place for such businesses to invest in, can potentially find itself in conflict with the greater good of society. Offering corporations low tax rates or loopholes, and relaxed employment laws can lead to a “race to the bottom”. In my view there has to be a balance. If business wants to benefit from the society in which it operates, it must also be prepared to contribute fairly too it. In this context being business friendly, should not mean giving business everything it asks for, but in recognising a role for business in determining the kind of society we live in.
An immediate example of this can be seen as the EU referendum debate gets underway. The public have been given an opportunity to decide Britain’s future, but both politicians and business have come together to make the case for a vote to remain. With an issue as complex as the EU, it is surely a good thing that business is engaging and helping to communicate the implications of this once in a lifetime choice. After all, business interests become public interests as soon as jobs are lost, investment is reduced, or prices rise.
It is important for business to be engaged in politics and it is important for politicians to listen to business concerns. This mutually beneficial relationship is essential for economic growth, prosperity and stability. But though business can advise, it must not govern. Ultimate responsibility for a policy decision lies with politicians, of whom should take the advice of all stakeholders in society to reach a decision that will benefit the country as a whole.
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