Are the Tories tipping into anti-business rhetoric?

The government announces more regulation business won't like.

This announcement was always going to be tricky for a Conservative prime minister to make. The relationship between the Conservatives and the business community is stronger and longer established and runs much deeper than the marriage of convenience between business (and the City especially) and New Labour, and stronger than that with the LibDems. While the Labour Party continues to try hard to re-engage and woo business leaders (its top team were out in force at a Labour Party business reception earlier this week, including the one-man charm machine that is shadow business secretary Chuka Umunna) it still has a long way to go.

The Conservatives on the other have been trying to juggle keeping business onside with not being seen to be too cosy with such natural allies as large corporate donors and wealthy business leaders. This balancing act partly explains both the prime minister and his chancellor making so much noise about anti-tax abuse regulations.

At an awards dinner recently one senior FTSE100 executive told me he was fearful that all the aggressive government rhetoric on tax was in danger of tipping into anti-business rhetoric. He was appalled by what he felt was precisely the opposite of the sort of language he expected from a Conservative prime minister, even one leading a coalition government.

The lobbying debate got even more heated when another announcement – that plans to force cigarette brands to adopt generic packaging were to be shelved – was linked to alleged lobbying activities of Conservative Party strategist Lynton Crosby (whose firm counts tobacco giant Philip Morris among its clients).

The rights and wrongs of who asked for what favours from which politicians (which is essentially what lobbying is) matters less than the message the whole affair sends out. While the boisterous, point-scoring politics of Prime Minister’s Questions is a bit of noise and we can enjoy the “banter” of David Cameron being called “the prime minister for Benson and hedge funds” Ed Miliband being accused (again) of sitting “in the pocket of the unions”, these stories continue to undermine public trust and confidence in both politicians and business.

Trust is already at a something of a premium, following the financial crisis. The recession may have been caused more by a reckless few financiers than the business community per se, but for much of the public there isn’t that much to distinguish bankers from big business. It’s a problem business secretary Vince Cable started the week trying to address. He launched a consultation paper at the London Stock Exchange called Trust and Transparency, which proposes a whole raft of measures on areas ranging from beneficial ownership (much of which was announced at the G8 Summit earlier in the summer) right through to a much-needed review of the system for pre-pack administrations.

Cable launched the paper in the City because many of the current problems with trust started in the Square Mile during the financial crisis. As Cable said, there has been “a seemingly endless succession of mis-selling and price-rigging scandals; and accusations of greed and unethical behaviour against leading figures in the industry.”

It’s no surprise that this year’s Edelman Trust Barometer found that UK banking scores some of the lowest trust scores for any sector in any country.

The problem with any trust is that it takes a long time to build, is shattered in an instant and takes even longer to rebuild. If the public mistrusted the relationship between business and politics in 2008 it is not surprising the only thing that has changed since then is that the sense of mistrust and the outrage have grown.

Politicians need to be seen to be tackling these problems and as much as businesses won’t like it, that always means more regulation. Cable is right to introduce measures to give investors more power to influence executive pay. While the details of plans to introduce a register of the beneficial owners and detailed issues such as bearer shares will not be raised by the public when politicians start pounding pavements at the next election, it is essential the public understands that politicians and the business community are taking steps to put their respective houses in order. Without that trust will never be restored.

This piece first appeared on economia.

Photograph: Getty Images

Richard Cree is the Editor of Economia.

Photo: Getty
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Who will win in Stoke-on-Trent?

Labour are the favourites, but they could fall victim to a shock in the Midlands constituency.  

The resignation of Tristram Hunt as MP for Stoke-on-Central has triggered a by-election in the safe Labour seat of Stoke on Trent Central. That had Westminster speculating about the possibility of a victory for Ukip, which only intensified once Paul Nuttall, the party’s leader, was installed as the candidate.

If Nuttall’s message that the Labour Party has lost touch with its small-town and post-industrial heartlands is going to pay dividends at the ballot box, there can hardly be a better set of circumstances than this: the sitting MP has quit to take up a well-paid job in London, and although  the overwhelming majority of Labour MPs voted to block Brexit, the well-advertised divisions in that party over the vote should help Ukip.

But Labour started with a solid lead – it is always more useful to talk about percentages, not raw vote totals – of 16 points in 2015, with the two parties of the right effectively tied in second and third place. Just 33 votes separated Ukip in second from the third-placed Conservatives.

There was a possible – but narrow – path to victory for Ukip that involved swallowing up the Conservative vote, while Labour shed votes in three directions: to the Liberal Democrats, to Ukip, and to abstention.

But as I wrote at the start of the contest, Ukip were, in my view, overwritten in their chances of winning the seat. We talk a lot about Labour’s problem appealing to “aspirational” voters in Westminster, but less covered, and equally important, is Ukip’s aspiration problem.

For some people, a vote for Ukip is effectively a declaration that you live in a dump. You can have an interesting debate about whether it was particularly sympathetic of Ken Clarke to brand that party’s voters as “elderly male people who have had disappointing lives”, but that view is not just confined to pro-European Conservatives. A great number of people, in Stoke and elsewhere, who are sympathetic to Ukip’s positions on immigration, international development and the European Union also think that voting Ukip is for losers.

That always made making inroads into the Conservative vote harder than it looks. At the risk of looking very, very foolish in six days time, I found it difficult to imagine why Tory voters in Hanley would take the risk of voting Ukip. As I wrote when Nuttall announced his candidacy, the Conservatives were, in my view, a bigger threat to Labour than Ukip.

Under Theresa May, almost every move the party has made has been designed around making inroads into the Ukip vote and that part of the Labour vote that is sympathetic to Ukip. If the polls are to be believed, she’s succeeding nationally, though even on current polling, the Conservatives wouldn’t have enough to take Stoke on Trent Central.

Now Theresa May has made a visit to the constituency. Well, seeing as the government has a comfortable majority in the House of Commons, it’s not as if the Prime Minister needs to find time to visit the seat, particularly when there is another, easier battle down the road in the shape of the West Midlands mayoral election.

But one thing is certain: the Conservatives wouldn’t be sending May down if they thought that they were going to do worse than they did in 2015.

Parties can be wrong of course. The Conservatives knew that they had found a vulnerable spot in the last election as far as a Labour deal with the SNP was concerned. They thought that vulnerable spot was worth 15 to 20 seats. They gained 27 from the Liberal Democrats and a further eight from Labour.  Labour knew they would underperform public expectations and thought they’d end up with around 260 to 280 seats. They ended up with 232.

Nevertheless, Theresa May wouldn’t be coming down to Stoke if CCHQ thought that four days later, her party was going to finish fourth. And if the Conservatives don’t collapse, anyone betting on Ukip is liable to lose their shirt. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.