George Osborne’s Budget on 8 July 2015 was a game-changer and not just for those involved in political engagement and communications. He took policy ground traditionally ‘owned’ by Labour and also shifted the political narrative.
Osborne has moved the focus of the Conservative Party beyond addressing welfare to be seen to deal with the worst impacts of business. Whilst corporation tax may have fallen there was more for businesses to do on apprenticeships and most importantly wages.
This change in thinking should not have come as a shock to anyone. Many big businesses realise that they have a problem of public trust. Labour did strike a chord when it came to abuses by large companies in energy and banking. Added to this, it has been increasingly realised that the state is, in effect, subsidising the private sector through tax credits, rent payments etc.
The Coalition too took action, for instance by referring the energy companies to the Competition and Markets Authority that reported recently that customers were paying too much. The banking sector too has come under attack from the Conservatives. The Budget, and apparent comments from government advisers, show that the Conservatives are prepared to intervene where businesses and markets do not behave. This intervention could potentially be quite muscular.
So what does this mean for those involved in political engagement?
- Labour will struggle to come up with an alternative narrative. The leadership candidates only have a matter of weeks to come up with a strategy that demonstrates what their version of the Labour Party will look like. This uncertainty will pervade through the Parliamentary party as well. So coherence as an effective opposition party will be undermined.
- The business agenda. There could increasingly be divergent lines between businesses of various sizes and between sectors as well. If Government is serious about seeing the role of business differently then it will need to work through these issues and may need help to do that.
- How does your organisation contribute to society? It will no longer be enough simply to employ people and do a bit of CSR, there will have to be a strategy that sits behind engagement that you need to be prepared to engage with government about. Questions will be raised about equality of opportunity within organisations, the number of women on boards, open recruitment processes etc. The Osborne approach will see business through the lens of government.
- Relationships with other organisations. This new position has to be reflected in the way that business is done – with suppliers, partners, charities etc. This requires careful consideration of relationship and potentially some auditing as well especially where relationships may have existed for some time. Business as usual is no excuse.
- Reputation becomes ever more important. If Government cannot see you, and your sector, playing by these news rules then expect repercussions. This means not only doing the right things but being seen to do the right things. That requires a profile and a level of confidence.
I also attended a British Chamber of Commerce event in Belgium recently where Alexander de Croo, Deputy Prime Minster of Belgium, spoke about a shift from Corporate Social Responsibility to Corporate Social Business. In other words, businesses contribute to society not because of supposed obligations but because they are inherently good for businesses. The Osborne approach shows that government is not prepared to let businesses interpret their own ideas of responsibility and will instead take a firmer hand in directing them.
Politics in Britain and the relationship between business and government may just have pivoted.