The voice of business should burst the Westminster bubble

It is great news to see that more senior business figures will be joining the House of Lords, including Sir Anthony Bamford, chairman of JCB and Dame Lucy Neville-Rolfe, former executive director of Tesco’s corporate and legal affairs department. At the same time, it’s not nearly enough – at least, that’s the judgement of some of the most senior figures at Britain’s blue chip firms.

The latest Korn/Ferry survey of FTSE 100 chairmen finds that an overwhelming 89 per cent of respondents think Britain’s politicians are holding back the country’s business achievements because of their lack of commercial experience.

Indeed, some are concerned about our political masters’ narrow exposure to any sort of life beyond the Westminster village. As one chairman writes: “The current crop of politicians has very limited experience of the world outside the corridors of power.”

When the novelist CP Snow coined the phrase “the corridors of power” in 1964, it carried a glamour of inside knowledge. Today it suggests a hermetic bubble, where rival politicians jockey for advantage with little comprehension of the nation they are supposed to be governing.

It isn’t that we need government by expert, business or otherwise. But at the moment we seem to have the worst of both worlds: politicians who tinker with regulation for reasons of electoral advantage, while pretending to an expertise they lack.

That’s a disaster, because the games politicians play have outcomes that affect us all. And the predicament that the UK finds itself in remains very real. Almost two thirds of the FTSE chairmen agree that the UK economy is thankfully at last recovering, a view supported by July’s manufacturing figures, the best in years.

Yet there clearly remains a long way to go. The National Institute for Economic and Social Research (Niesr) today revises up its forecast for UK growth in both 2013 and 2014 by 0.3 percentage points, but that sunny optimism still only projects annual growth at 1.2 and 1.8 per cent respectively. The research group says that the UK economy has been “moribund since the second half of 2010” and that the projected gains are expected to largely come from an increase in consumer spending at the expense of household savings, not a rise in real disposable income.

We need radical thinking to turn this into something more sustainable. And given the limited expertise of our current crop of leaders in anything except the world of politics, the best option remains the simplest: they must not try harder.

Rather than labouring under the delusion that even the most knowledgeable could successfully design a better economy from a Whitehall desk, the coalition should step back, loosen the fetters of red tape and let a supply-side revolution do their work for them.

Although among the initiatives in train there are pockets of optimism – like new plans apparently on the cards for simplified building standards – there seems to be little hope of a broader shift in this direction. Instead, businesses are left running to keep up with the latest Westminster fashions in government over-reach: whether they are for net nannying or micro-managing Britain’s energy mix.

Let us hope then that a stronger voice for business in our legislature’s upper house will filter down into the ears of the current government. But the most important message that needs to be heard is not about special perks that some business groups may wish to lobby for. It is, appropriately enough for a chamber that exists to keep the Commons in check, a message about limits.

First published: City A.M., 2/8/13

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