Britain is now an anti-business nation

YES, this government is anti-business. This is the first time since 1994, when Tony Blair took over the Labour party, that both government and opposition are united in their relentless attacks on corporate Britain, money-making and the City. The difference in those days – and starting in 1979 – was that the Tories were in power, and that they were staunch supporters of free enterprise, rewards for success and low taxes. Partly because of the Lib Dems and partly because of their own intellectual incoherence, lack of belief in individual liberty and limited interest in economics, the Tories are now more concerned at pandering to populism or outflanking the Labour party from the left, rather than imposing an alternative, pro-freedom and capitalist narrative. This is the first time since Sir Edward Heath’s useless Tory government of the 1970s that no major political party in Britain is advocating a truly freer market.

No wonder, therefore, that one senior wealth manager told us earlier this week that the political climate is now the worst it has been for the City and private business more generally since Harold Wilson’s socialist government of 1974-76. This is an exaggeration: thanks to globalisation, and the fact that so much of the 1980s-1990s reformist agenda remains entrenched in policy and culture, there is a big difference in what the political classes are doing and the actual business climate. But the direction of travel isn’t good.

No society has ever done well or created jobs and incomes, including for its most vulnerable members, by bashing business, crippling the most successful sectors of its economy or waging war on wealth. It is unfortunate, however, that it is only now that mainstream commentators are starting to realise that Britain has become anti-business – and they have noticed for the wrong reason. Some in the business community have lashed out over the decision to strip Fred Goodwin of his knighthood. As to the commentariat, suddenly even usually anti-business advocates sound scandalised about the ex-RBS boss’s treatment (it was strange to see so many banker-bashers and peddlers of hysterical anti-City sentiment, who have done so much to turn the public against all CEOs and all bankers, including the vast majority who have done nothing wrong, suddenly start defending Goodwin, one who actually deserves opprobrium).

But this was the wrong issue to get upset about. Supporters of capitalism and rewards for success shouldn’t defend someone who is being penalised for failure. Goodwin was knighted for services to banking – that was untenable. It isn’t fair that he was singled out, and it’s vital the lynch mob be contained – but sometimes, partial justice is better than nothing.

Goodwin’s deknighting is not what is destroying the UK’s reputation. What is doing that is the war on the City (rather than sensible reform); constant attacks on success; an absurd belief that fixed pay is a better system than variable pay and that politicians can determine what a “fair” wage is; the government’s failure to deregulate labour markets; high income and other taxes; an energy policy which is killing manufacturing; the tax raid on the North Sea; an inefficient and bloated public sector; inadequate airports; a gargantuan budget deficit and excessive private and public debt; an inadequate education system – I could go on. Forget Goodwin’s deserved deknighting – these are the real failings that are debilitating the UK.

allister.heath@cityam.com
Follow me on Twitter: @allisterheath

Share

Previous & Next Content

In Other News

April 16, 2014, 7:50am
April 16, 2014, 2:07am
April 16, 2014, 1:57am
April 15, 2014, 1:14pm