City Matters: Business must stand up and be counted – and put the facts into the EU debate

 
Mark Boleat
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OVER the last few weeks, I have had the opportunity to discuss the political situation in Britain, and the state of Britain’s relations with the EU, with business and political leaders in both Brussels and London. It is no exaggeration to say that there has never been such concern in business about politics.

This is not concern of a “chattering classes” nature, but rather a real anxiety that political uncertainty is bad for investment. The general election next year will not be the traditional two way fight, with a possible impact from a third party. It will perhaps be a five way fight, with Ukip and the SNP having a significant impact both on what the other parties will include in their manifestoes and possibly on the make-up of the next government. Bookmakers see no overall majority almost as a foregone conclusion.

The European situation is critical in its own right, not just because of its impact on the general election. In some ways, the EU position has never looked easier from the UK perspective. The Eurozone crisis has abated somewhat – but slow growth in the Eurozone continues to have a dampening effect on the British economy. Jean-Claude Juncker’s appointment as European Commission president may have been against the wishes of the British government, but he has made up for this with a Cabinet constructed in a way that is well beyond the best the UK could reasonably have hoped for. Since then, he and his colleagues have been making all the right noises about what they want the Commission to do – focus on jobs and growth, and better rather than more regulation.

But then came the unexpected – a demand for backdated payments from the UK – which worsened UK-EU relations at a stroke. While the chancellor gained concessions on Friday, the full story of how unexpected the surcharge was, and who knew what and when, has yet to be told. Domestically, Ukip’s success in Clacton and possible success in Rochester has led to a very real response from the Conservative party, including comments on free movement of labour that are well beyond what has previously been considered.

Business is understandably unhappy with the political situation, through its effect on confidence and investment. But business cannot be a bystander in these great debates; it may well be correct to say that government does not understand business, but business itself is largely to blame. Business has a clear duty to be in the policy debate – not supporting individual parties, but rather in ensuring that the hard facts are better understood. The overwhelming business view is that Britain needs to be in the EU and fully engaged, but “fully engaged” means business as well as government.

Britain has outstanding companies led by outstanding people. They need to turn just part of their talents to ensuring that government does understand business, and that the business case is given proper weight in policy discussions. The CBI and some trade bodies do a great job, but this is not enough. Individual business leaders need to stand up and be counted.

Mark Boleat is policy chairman at the City of London Corporation.