The Conservative Government Means Business

Posted by: on Jan 27, 2020 | No Comments

The Conservative election victory has brought with it the promise of policy development and an end to uncertainty. But this is not business as usual as far as business is concerned.

The comments made by the Chancellor, Sajid Javid, to the Financial Times about the future relationship between the UK and EU were refreshingly revealing. Whilst many felt that there would be divergence, to have the Chancellor state that ‘there will not be alignment’ was an explicit acknowledgement. He went on to say:

‘There will be an impact on business one way or the other, some will benefit, some won’t.’

In other words, there will be winners and losers. The challenge for any organisation is to ensure that they are not one of the losers. Whilst each organisation can do its own planning and risk management, there should also be a role for engagement with government. Any organisation not doing all it can to ensure that it is a loser as a result of government action, or inaction, is failing to manage its risk properly.

But there is an added complication. The government is sceptical, at best, about the role of the more traditional voices of business such as the CBI and IoD.

If anyone doubts that relations are poor then just consider the rebuke issued by the government to a letter from business leaders suggesting that low skilled EU migrants be allowed to continue to come to the UK on two-year visas. As reported in The Times, the government replied by saying:

‘business lobby groups should stop lobbying for unlimited labour from the EU and instead focus on investing and levelling up the existing workforce.’

The Times have also reported that the government’s weekly meetings with business groups have been replaced with a monthly one.

Of course, the business groups themselves have to work out how to respond to this new environment but it has repercussions for how individual organisations engage with the government. Here are a few ideas:

  • more direct engagement – government always prefers to hear from organisations, especially businesses themselves. The real examples, a discussion about the direct challenges and ideas for solutions are better delivered ‘in person’;
  • other trade organisations? – businesses should think about which trade organisations they work with and whether others may be better placed to make the case to government. The government’s current position on business groups also seems to open up membership opportunities to other trade and representative bodies;
  • when to challenge government? – it could be argued that the upset in relation with business groups comes down to their position on Brexit. It is obvious that the government is ‘sensitive’ about Brexit and is looking for businesses to deliver the sunny uplands rather than focusing on the downsides. There is, of course, a balance to be struck but organisations need to explicitly consider this balance; and
  • public profile – related to the government’s ‘sensitivity’ should be an active consideration about how public any challenge, let alone criticism, of government should be. Given its secure parliamentary majority and delivery of Brexit, the government has the political capital to come out swinging. Any public rebuke through the media, risks incurring the full wrath of government. It would be considered a ‘brave’ approach.

The government’s position needs us all think carefully about our engagement and challenges established practice. This is not business as usual.