Back in 2018, when he was just a mildly comic Foreign Secretary, Boris Johnson had heard enough from companies worried about the potential impact of Brexit on their operations. “Fuck business!” he exclaimed to the Belgian Ambassador at a diplomatic gathering; we have come to learn this was a classic, narcissistic, Johnson move, making him the centre of attention whilst simultaneously burnishing his populist credentials.
Whilst his outburst was more colourful than most, it wasn’t all that surprising. Relations between politicians and the business community have been sour for years. Way back in 2014 polling by Populus (now Yonder) found that all voters, including Tories, were much more likely to say that big business took advantage of ordinary people than helped them get a better deal. Even Conservative MPs, usually assumed to be big fans of the private sector, were only slightly more likely than not to be supportive of firms. It’s now normal for Parliamentarians of all stripes to blame business for problems that arise, even when they have contributed to those difficulties themselves. Witness the recent spate of stories about Ministers blaming supermarkets and manufacturers for the cost of food.
But arguably the biggest damage being done to business is not overt hostility from a few leading MPs. It is the lack of understanding of the way the private sector works that permeates Whitehall and Westminster, from Ministers to Shadows, MPs and advisors, and above all officials, and their equivalents in Edinburgh and Cardiff. This affects the way decisions are made to do – and not to do – things that cost businesses millions, shake their confidence, and ultimately will cost the UK when it comes to investment.
On one level relations between the public and private sectors have never been better. The pandemic encouraged many Government Departments to set up ever more forums, roundtables and councils to bring companies inside the tent and listen to their concerns. Often these worked brilliantly: the fact that our food industry didn’t falter, for example, is partly as a result of the ‘FRIF’ set up by Defra. Many of these structures have remained, providing useful forums for each side to listen to the other.
Listen but not always understand. In particular, Ministers and officials often seem completely blind to the fact that businesses need long lead times to do things as ‘simple’ as changing packaging or instituting a deposit return should scheme (to pick an example at random). They like governments to make decisions, articulate them clearly, and stick to them for the long-term. Constant chopping and changing ends up costing money and may make it impossible to deliver. It also means that businesses are less likely to take government proposals seriously in future.
An absolute classic of the genre is the Scottish DRS. In their excitement about getting one over on the Nats, Ministers in London have seen the impact on businesses as a secondary concern. Never mind that retailers, manufacturers and others have between them invested millions in a scheme that they had every reason to expect to go ahead in August this year or maybe March next – and then at the very last minute been asked to stand down, on the basis that the DRS might go ahead in October 2025.
Advisors and Ministers in London might shrug and say they were always going to object to the scope of the scheme (and in particular exclude glass). One person close to the process even said to me that businesses were “idiots” for imagining things were on track. This isn’t just insulting, it’s also not good enough. If this was known all along why not say it a year or so ago? Why not try to work with the Scottish Government instead of playing games (on both sides)? Why, when asked about this a few months ago, did officials say “we don’t comment on speculation”? It seems that having a spat about devolution was the priority and let’s not talk about the fact that companies would be collateral damage.
There are a host of other examples of this, ranging from the very short timelines for adapting packaging and practices to give effect to the Windsor Framework; to constantly questioning the future of all major projects (especially HS2 and Sizewell C); to screwing up the labour market by ending free movement without any forward planning, over the protests of the companies that actually employ people; to making assumptions about the ability of supply chains to deliver despite all the evidence to the contrary. (These are not party political points; some of Labour’s proposals are also both unmoored from reality and subject to sudden change – look at the £28bn Green Investment Plan.) There are even rumours that Extended Producer Responsibility, for which businesses have been preparing for ages, will be delayed from next year.
This all has consequences. If they can’t trust Government to deliver when it says it will why would companies spend money getting ready for any future change? And if companies have the option to invest in another country where decisions are stuck to more reliably, why won’t they do that? In the end it is the UK that loses: consistency and lack of realism make this country less investible and hold back our economic growth.
Part of the fault for all of this lies with business. Companies can be too timid in making their case to Government and the Opposition (they should of course consult experienced professional lobbyists for advice about this). And the hiatus in representation of the private sector as a whole since the implosion of the CBI is not Whitehall’s fault. But both sides need a reset. Less suspicion on both sides and more collaboration. More frankness. Less shuffling of Ministers and officials, allowing them to gain expertise and trust. Basically: less fucking with business and more willingness to work together.