Businesses are often surprised by government announcements, mistaking civilised interactions with ministers and advisers for their real political intentions. Politicians might sympathise with a particular policy, but it will always be overridden by the political imperatives of the day.
And so it is that many businesses have been caught off guard by the government’s shift left on the economy and the tone of Theresa May’s Party Conference speech. As I outlined in my last column, the Tories’ economic policy is explained almost entirely by the dislocation of the Labour Party from its Northern working class base. The Tories want these votes.
As businesses seek to anticipate what else the government might do in this Parliament, what are the other political imperatives they must consider? There are at least three.
The first and most obvious one is this: May cannot under any circumstances appear to row back on Brexit – particularly border control. If she does, she will be finished. For all the noise of Labour and Lib Dem politicians – and a fraction of the 48 per cent of Remain voters – May knows that if she appears to go soft she will rapidly lose public support, the support of the popular press and control of her party.
That does not mean she will dismantle every characteristic of the Single Market, even if we withdraw from it. Nor does it mean the government will massively curtail immigration. But it does mean that Brexit must look like Brexit to the public – and that Britain will take control of its borders, even if it decides to encourage high-skill immigration (as it must). Pro-EU business leaders should focus on what British economic policy looks like outside the EU, not partially attached.
The other two political imperatives should be encouraging. The second is Tory desire to address their weaknesses in the country’s major towns and cities – again, borne of ambition sparked by the Labour implosion. Once a viable alternative to Labour in urban politics, the Tories have largely been driven into the suburbs and the shires. They are keen to reverse this.
We are therefore likely to see further devolution to major towns and cities, more investment in infrastructure to ease travel between cities and also, presumably, more attention on universities and colleges that can raise the standards of education across the country. We are also likely to see a continuation of the last government’s active promotion of the better use of technology and data in developing urban policies and services.
For example, the last government was interested in promoting mayors’ Offices of Data Analytics, in the manner of New York City, and these are already starting in Britain. The government may well also actively encourage things like car sharing schemes of the sort run by firms like BlaBlaCar – ideas that will help to ease congestion and make travel easier and more convenient. There are huge opportunities for business here.
The third political imperative is the desire to inject “fairness” into welfare and public services. May has put herself on the side of those “just about managing” – the mass of C1/C2 voters of provincial England. Like anyone, these voters care about their incomes, but they are values voters too.
This might sound abstract but in practice it could mean, for example, exploring the concept of a contributory welfare system, so that those people who have “paid more in” can secure more help when they need it. Or it could mean extending ordinary families’ access to the sorts of things their parents took for granted – for example, by encouraging longer opening hours at GP surgeries. Injecting fairness into welfare and public services will depend heavily on the expertise of the private sector.
Businesses considering future threats and challenges should not start by looking at all the things the government has said about their sector. They should look at the electoral battleground, polling, internal party pressures and what’s in the Treasury’s coffers. This is where politicians begin.