What businesses can expect from Theresa May’s self-consciously pragmatic Conservatism

 
James Frayne
Theresa May Succeeds David Cameron As The UK's New Prime Minister
May will surely run a self-consciously pragmatic government with an open-mind towards state intervention and significant state spending (Source: Getty)

From what retailers sold in their shops to their advertising, David Cameron seemed to have a view on everything businesses did. While they might not have approved of it all, businesses understood what he was thinking. Not so with Theresa May.

May intervenes in public debate sporadically, on bigger issues and with more focus. She seldom commented outside her Home Office brief and had little chance to discuss business in her leadership campaign. In my last column, I looked at the government’s developing industrial strategy. But what can businesses expect of May’s broader approach?

Let us start with what we know: her record in government; her stated initial priorities; and the nature of her staff. Each of these provides pointers on what we might see up to the next election in 2020.

As home secretary, May was competent, careful and patient. Reforms happened – police and crime commissioners, crime mapping, restrictions to student visas and significant reductions to police budgets – but they unravelled steadily and without fanfare. May did not self-define as a radical.

May’s stated priorities as Prime Minister have essentially been about helping ordinary families that are “just about managing” – shifting from Cameron’s Notting Hill Conservatism. She has made clear she will prioritise the big cities of the country by investing more in the regions and boosting productivity. The new Department for Business, Energy and Industrial Strategy puts flesh on the bones.

Read more: Why you should beware May’s “industrial strategy”

May’s principal aides are from another planet to Cameron’s. Each looks at politics and economics through the prism of ordinary life. Nick Timothy is a grammar school educated Brummie who got a first at Sheffield University and is passionate about redeveloping the country’s great urban centres. Fiona Hill, May’s other joint chief of staff, is cut from similar cloth in that she has little time for the metropolitan modernisation of the party and thinks more about what will work practically.

Director of policy John Godfrey is a long-term senior adviser at Legal & General who understands the “real economy” and the pressures and uncertainties that ordinary families endure. In Huddersfield native Neil O’Brien, responsible for industrial strategy, they have one of the most brilliant policy minds in government. He encouraged George Osborne’s “Northern pivot”.

Connecting the dots, what do we see? We surely see a self-consciously pragmatic government with an open-mind towards state intervention and significant state spending. We see a government likely to be obsessed with boosting jobs and productivity in the regions. And we see a government that is going to think hard about how businesses benefit working class and lower middle class people.

May’s administration is likely to encourage and reward those companies that spend money on R&D, who seek to provide local apprenticeships and staff training, and who keep corporate pay under control and pay their “fair” share of taxes. Across the board tax cuts are surely out (unless the economy slows badly) and conventional CSR is unlikely to carry much weight with this government, which is unlikely to rush towards associating with fashionable brands.

Read more: Beware the unintended consequences of May’s flawed executive pay proposals

An open question is whether May continues with previous governments’ interest in regulating consumer goods firms in the name of healthier living. There is currently huge momentum behind this approach within departments. But May’s team will be vulnerable to arguments that more taxes and regulation on these sectors will just raise prices at the tills and irritate the people they care most about (but only if those arguments are made).

Every so often Downing Street plays host to receptions for businesspeople they want to be friendly with. If you own an innovative, research-driven firm in the West Midlands with lots of well-trained local staff, your invitation is in the post. If you work for a fashionable tech brand in London with high visibility but not many staff, Osborne will no doubt still be interested in hearing from you.

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