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Populist election promises and their real-world impact on businesses

I was in Cornwall last week, a place as far away, both geographically and psychologically, from the Westminster bubble and the group-think of corporate multinationals as one can get in England.

Yet, talking to members of this vibrant and close-knit business community, it swiftly became clear that they didn’t feel national politicians were listening to their needs – particularly when it came to getting the people they need to make their businesses, and their county, great.

The rocket scientist in need of specialist engineers that are sought after all around the world.

The firm of local solicitors who wear their local commitment and employee ownership with pride, who need new recruits to power their continued growth.

The tourist attraction that lost highly-regarded European catering employees who didn’t feel welcome after the referendum vote – which despite its reputation as a great local employer is struggling to find replacements because of a shortage of candidates in their community.

The renewable energy firms keen to transform Cornwall into a test-bed for the innovative and new technologies to power the UK’s future, who work closely with local colleges, yet still need more talent and clearer government policies to make those breakthroughs happen.

These sorts of businesses — all of whom place local employment and a strong local economy at the heart of their thinking — were sceptical about what they are hearing in this election campaign.

And they’re not alone.

We are asked, all over the United Kingdom, how politicians of all colours can put forward policies that have serious consequences for the growth prospects of rank-and-file businesses. Some even ask whether the major parties understand the growth needs of their local economies at all.

The Conservatives’ plans to limit migration, increase the charges businesses face for employing non-EU talent when they struggle to recruit, and to create new employment regulations dictating their relationship with employees are seen with the same apprehension as Labour’s ideas for sweeping nationalisation, higher taxes, and deep market intervention.

By and large, these businesses are not international PLCs seeking to protect their comparative advantage. Nor are they amongst the tiny number of firms that hit the headlines for their unseemly and unwelcome ‘low-pay, low-care’ business culture.

Instead, they are part of the huge majority of civic-minded businesses — who increasingly feel that their prospects are hindered by a Westminster that neither understands nor cares for them.

They’re the firms who have always worked to take on apprentices, who put training at the heart of their growth plans, who invest for the long term, and who make deep and abiding contributions in their local communities.

There are elements in each of the major parties’ election manifestos that gives them cause for concern about future recruitment and growth.

The prospect of higher up-front business costs, more government intervention and perceived indifference toward enterprise and wealth creation would have a chilling effect on these firms – and at precisely the wrong time. The animal spirits of Britain’s ‘civic businesses’ require a boost, not a knock, in order to play a strong role in navigating the Brexit transition and laying the groundwork for our future success.

Yet instead of being encouraged and incentivised to look at new models of growth, many feel they are being unfairly rapped over the knuckles by politicians, most of whom have never had to walk a mile in an entrepreneur’s shoes.

Policies get announced, politicians move on, but the unintended consequences of their actions linger for the businesses who pay the inevitable financial or compliance costs for decades to come.

Governments in other countries, too, will be watching with interest – and will ramp up their lobbying efforts to attract UK-based firms, if they sense an opportunity. Our politicians must reflect on the impacts of some of their election-season promises on the business environment, and work to mitigate these – or expect to see more firms talking openly about whether further expansion here in the UK is an option for them.

It’s time for an end to the chastising of business, and an end to the competition for eye-catching policies in areas like immigration that have negative impacts on business confidence and future jobs and investment.

It’s time to listen more to the real-world, practical barriers to hiring and growth that are being raised by the committed, hard-working firms we see in cities and counties all across the
UK. The optimism and commitment of the Cornish firms that so inspired me – and hundreds of thousands more besides – is very much at stake.

Dr Adam Marshall is Director General of the British Chambers of Commerce (www.britishchambers.org.uk).

This piece by Dr Adam Marshall appeared in the Times Red Box on June 2, 2017. To visit the Times Red Box click here

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