The bosses’ boss: the head of the Institute of Directors

Simon Walker is an anti-apartheid campaigner turned free-market evangelist.

Simon Walker sounds almost apologetic as he leads me through the marble lobby of the Institute of Directors; one of his aims as head of the IoD is to attract more young members, so he’s quick to mention his plans to modernise its “grand” and “intimidating” Pall Mall headquarters.

On the morning of our meeting, the IoD had described government plans for men and women to share 50 weeks of parental leave as a “nightmare”. In recent months it has condemned a potential ban on zero-hours contracts as “misguided and extremely damaging” and labelled as “simplistic in the extreme” the TUC claim that if all employers paid the living wage this would save the treasury £3.2bn. But there was little in Walker’s early political career to suggest he would become spokesperson for an organisation easiest thought of as the union for bosses.

His first involvement in politics was as part of the left-wing movement opposing apartheid in South Africa, where he grew up. And when he first moved to the UK, in 1971 to study politics, philosophy and economics at Oxford, he became chairman of the student Labour party. I had wondered if Walker would possess all the inflexible zeal of a late convert to the benefits of the unfettered free market but he’s more philosophical. He often illustrates his argument with quotations recited from memory. He reads a lot, he tells me at one point, and hardly ever watches television – apart from Borgen, the Danish series on coalition politics.

“I’ve always been fascinated by the media, politics and business, and if there were a Venn diagram I’d be happiest in that bit in the middle of all three circles,” he says. He’s applied this principle to a remarkably broad career. After leaving Oxford, Walker started work as a TV journalist in New Zealand. He became an adviser to New Zealand’s Labour Party in the mid-1980s, and then a lobbyist in London and Brussels before joining John Major’s policy unit in 1996. After Tony Blair’s 1997 landslide victory, he was appointed director of corporate affairs at British Airways, before moving to Buckingham Palace in 2000 as communications secretary to the Queen.

Walker says that growing up in apartheid South Africa had a decisive influence on his later career. He was raised in a left-wing household – his grandfather kept a picture of Stalin on his mantelpiece, and bound issues of the New Statesman with sections circled in red crayon and marked with comments such as “rubbish”. The left was the natural home for anyone opposed to racial segregation: “For many years the communists were the only political force that treated people equally,” Walker explains. When he signed up to the liberal, anti-apartheid Progressive Party, he felt like he was joining “a battle between good and evil”. “And it was. It was a truly pernicious system in a way that sometimes makes the arguments in Britain or New Zealand seem trivial in comparison.”

He found Britain in the Seventies a depressing place. “You did get the sense that Britain was going into a permanent decay, which I think was true,” Walker recalls. He didn’t hesitate when, during a debating tour to New Zealand, he was offered a TV job.

There is still footage online of one of his clashes with New Zealand’s prime minister Robert Muldoon in 1976. An almost impossibly baby-faced Walker doggedly questions Muldoon over Russia’s ability to carry out a strike on New Zealand, while Muldoon tries to read out prepared answers to a different set of questions. Even when Muldoon complains that he’s “not having some smart alec interviewer changing the rules halfway through”, Walker seems composed.

Off-air, he was also feeling increasingly opposed to Muldoon’s statist policies: “Over the next ten to 15 years, I lost all faith in the ability of the state to direct the economy,” he says.

Today he’d like to see the welfare state trimmed back and taxes lowered. He concedes that inequality is a “problem” and that there’s something “distasteful” about chief executives’ high pay, but he’s convinced that “if the government gets involved, it will just get it wrong”. This means that Ed Miliband’s plans to freeze energy prices and his comments on promoting “good business” haven’t gone down well. “The danger I see about more statist noise and left-wing rhetoric of a bygone era from a prospective Labour government is that it damages the attractiveness of Britain as an investment destination or a place to live,” he says, but he adds that the party’s “bark is worse than its bite”.

“The private equity market had no greater friends than Gordon Brown and Ed Balls,” he argues – Brown introduced the tax breaks that made it such a profitable industry and Balls “was extremely sympathetic to the problems of the City”. Boris Johnson, who the day before we meet had given his speech on why inequality is an inevitable consequence of unequal ability, has made an even better impression. London’s Mayor is “telling the truth and ultimately truth is the most important concept in politics, much more important than fairness or justice or other more subjective things,” he says. It is “obvious” that Johnson will be prime minister one day and he thinks that would be a good thing.

The only reason government should ever intervene in the economy, Walker tells me, is to set the rules and promote competition and transparency. When you don’t believe the state should intervene to redistribute wealth, promote good business practice or strengthen social safety nets, you need to display extraordinary faith in the markets, and Walker does. Underpinning his world view is a fundamental, unshakeable optimism. “Free market capitalism has made a greater contribution to human well-being than any political or social movement in human history.” Walker is promoting business with the same moral conviction with which he once opposed apartheid – a most unexpected journey.

Anti-Apartheid marchers in February 1990. Photo: Getty.

Sophie McBain is a freelance writer based in Cairo. She was previously an assistant editor at the New Statesman.

This article first appeared in the 12 December 2013 issue of the New Statesman, Power Games

Photo: Getty Images
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How can Britain become a nation of homeowners?

David Cameron must unlock the spirit of his postwar predecessors to get the housing market back on track. 

In the 1955 election, Anthony Eden described turning Britain into a “property-owning democracy” as his – and by extension, the Conservative Party’s – overarching mission.

60 years later, what’s changed? Then, as now, an Old Etonian sits in Downing Street. Then, as now, Labour are badly riven between left and right, with their last stay in government widely believed – by their activists at least – to have been a disappointment. Then as now, few commentators seriously believe the Tories will be out of power any time soon.

But as for a property-owning democracy? That’s going less well.

When Eden won in 1955, around a third of people owned their own homes. By the time the Conservative government gave way to Harold Wilson in 1964, 42 per cent of households were owner-occupiers.

That kicked off a long period – from the mid-50s right until the fall of the Berlin Wall – in which home ownership increased, before staying roughly flat at 70 per cent of the population from 1991 to 2001.

But over the course of the next decade, for the first time in over a hundred years, the proportion of owner-occupiers went to into reverse. Just 64 percent of households were owner-occupier in 2011. No-one seriously believes that number will have gone anywhere other than down by the time of the next census in 2021. Most troublingly, in London – which, for the most part, gives us a fairly accurate idea of what the demographics of Britain as a whole will be in 30 years’ time – more than half of households are now renters.

What’s gone wrong?

In short, property prices have shot out of reach of increasing numbers of people. The British housing market increasingly gets a failing grade at “Social Contract 101”: could someone, without a backstop of parental or family capital, entering the workforce today, working full-time, seriously hope to retire in 50 years in their own home with their mortgage paid off?

It’s useful to compare and contrast the policy levers of those two Old Etonians, Eden and Cameron. Cameron, so far, has favoured demand-side solutions: Help to Buy and the new Help to Buy ISA.

To take the second, newer of those two policy innovations first: the Help to Buy ISA. Does it work?

Well, if you are a pre-existing saver – you can’t use the Help to Buy ISA for another tax year. And you have to stop putting money into any existing ISAs. So anyone putting a little aside at the moment – not going to feel the benefit of a Help to Buy ISA.

And anyone solely reliant on a Help to Buy ISA – the most you can benefit from, if you are single, it is an extra three grand from the government. This is not going to shift any houses any time soon.

What it is is a bung for the only working-age demographic to have done well out of the Coalition: dual-earner couples with no children earning above average income.

What about Help to Buy itself? At the margins, Help to Buy is helping some people achieve completions – while driving up the big disincentive to home ownership in the shape of prices – and creating sub-prime style risks for the taxpayer in future.

Eden, in contrast, preferred supply-side policies: his government, like every peacetime government from Baldwin until Thatcher’s it was a housebuilding government.

Why are house prices so high? Because there aren’t enough of them. The sector is over-regulated, underprovided, there isn’t enough housing either for social lets or for buyers. And until today’s Conservatives rediscover the spirit of Eden, that is unlikely to change.

I was at a Conservative party fringe (I was on the far left, both in terms of seating and politics).This is what I said, minus the ums, the ahs, and the moment my screensaver kicked in.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.