HE MIGHT have parted company with the CBI four years ago, but Lord Digby Jones is still one of the staunchest defenders of the private sector. When he gives me his business card at the opening of a Vodafone store in the City, it is emblazoned with a motto that sums up his philosophy: “Only business and the creation of profit creates wealth in this country.”
Such opinions are increasingly unfashionable in the wake of the financial crisis, and Jones is one of a dwindling band of proud capitalists who is willing to air his forthright opinions in public. That has earned him regular appearances on Question Time and other current affairs shows, where his Brummie accent and no-nonsense delivery make him a favourite with viewers.
According to Jones, the stock of people in business has never been so low, not least because of the media’s tendency to vilify them. “If you look at the soap operas – whether its Coronation Street, Eastenders or the Archers – whenever they put a wrong ’un on, it’s always a business person,” he explains. “They’ve always got business people that tell their viewers that business is bad. I think that a lot of the media likes to associate the making of money with not being on your side.
“Whereas the making of money is definitely on your side because, you know, without any money you don’t get any tax. And without any tax, you can forget your schools and hospitals.”
The self-styled defender of capitalism seems more comfortable in his own skin since he resigned as a minister in Gordon Brown’s ill-fated government of all the talents, and now uses his role as a crossbencher in the Lords to express opinions that would have been unacceptable when he took the Labour whip.
Unsurprisingly, the 50p tax rate is high on his list of concerns. “What upset me was that when Alistair Darling announced the 50p tax rate you could hear the cheering on the Labour backbenches. And you think to yourself “Was this punishment? Was this populism?” The Treasury themselves are now saying it’s not going to make money, so that’s what it was: populist punishment.”
“So if it isn’t going to raise any money, and if at the same time it’s going to drive some people away from Britain because they think it’s not competitive, what good did that do to our society?”
Jones is also worried about the broader ramifications of a taxation system that punishes aspiration. He says that the policy won’t go down well with the all-important “Motorway Man” that pollsters say could decide the election. These young, normally childless couples – who live on new-build housing estates that are located near major roads – value wealth above all else and are put off by governments that appear to penalise it.
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George Osborne doesn’t seem to inspire confidence in Jones either, with his proposed levy on non-doms getting short shrift. “There’s a kid coming out of Bangalore University and in the past he’d have thought, ‘I think I’ll go to Britain, I’ll work hard, I’ll make some money’. We must be mad if we turn round to that kid and say he’s not welcome. Now that young man isn’t going to go and get his future in New York or Frankfurt, he’ll probably go to Qatar or to Hong Kong, and we don’t want to lose people to those places. They’re the people you never know about, they never came, so they don’t leave – they just never turn up. And that is the real damage you do to your economy by adopting populist policies.”
The planned hike in National Insurance – which could derail an “employment-based recovery” – completes the trio of poorly thought-out taxes that both major political parties will keep in force after the election (the Tories say they are against the tax, but have offered no firm commitment on when they will reverse it).
Although Jones is keen to point out that he doesn’t publicly support a political party, he is clear on one thing: a hung parliament would be a disaster for British business and the economy. “One thing that you’ll find with a hung parliament is that the politicians will be looking over their shoulder the whole time, and so you’ll probably have more populist policies, and that’s not good for stability and growth. That’s not good for taking action to reduce the deficit, and it’s not good for taking decisive action full stop.”
Whoever ends up getting the keys to Downing Street, Jones says they have to start cutting public spending immediately. He points out that the median wage in the public sector is now £700-a-year more than it is in the private, but that civil servants and their ilk still enjoy gold-plated pensions. “They’re going to have to accept what happens in the private sector – and yes you do get made redundant, and you don’t have the same pension.”
Surprisingly for someone with such capitalist views, he doesn’t think that more privatisation is necessarily the answer. “I’m not a fan of that, particularly,” he says. “What I’d like to see is the public sector standing up, accepting its responsibility to society and the taxpayer, and breeding some productivity into itself.” He also says that the UK needs “more nurses, more teachers, more policemen, more soldiers, better equipped” – it is back office functions that need to bear the brunt of cuts.
Although Jones claims to be apolitical, his views always make him sound like a natural Tory (even if he finds some of Osborne’s policies just as unpalatable as Darling’s). So, could he end up back in government under David Cameron? It appears that, for Digby, it’s a case of once-bitten, twice shy.
“I’m a non-aligned cross bench peer and – happily – that’s where I’m going to remain,” he says. In fairness, he’s probably more use to Britain’s businesses where he is: standing on the sidelines, making himself heard loud and clear.
CV | LORD DIGBY JONES
Education: Bromsgrove School, University College London (Law)
1980: Spends 20 years at Edge & Ellison, a Birmingham-based firm of lawyers, eventually becomes Senior Partner
2000: Joins CBI as Director General, a position he holds for six-and-a-half years
2006: Advisor to Deloitte and Barclays Capital
2007: Minister of State for Trade
Current: Crossbencher in the House of Lords
Chairman of the International Business Advisory Board at HSBC
Chairman of Triumph Motorcycles Corporate Ambassador for Jaguar and JCB