Poor relations between business and government

Forty years ago I published an article in Government and Opposition on big business and the Conservative Party in which I stated, 'The basic theme of this article is that this relationship is more problematic and tenuous than is often assumed to be the case.'   More recent events appear to confirm this thesis.

The CBI likes to present itself as the voice of British business.   Its heyday was in the days of tripartite economic policy in the 1970s when it became a governing institution alongside the TUC.  Its cooperation was needed to make prices and incomes policy, the central plank of economic policy, function.  Its role is evident in the chapter on economic policy I contributed to the recent book on the Callaghan Government edited by Kevin Hickson.

It suffered a body blow under the Thatcher Government when it was seen as a throwback to failed corporatism.   Matters weren't helped when one director-general promised a 'bare knuckle fight' with the Government.   Mrs Thatcher preferred to talk to the Institute of Directors which was seen as a more resolutely pro free enterprise organisation.

Influence was regained under the Major Government and New Labour, but in some respects the organisation has been 'hollowed out' like other British institutions.   A complicating factor is that Britain is a 'company state' where direct relations between leading companies and government are often more important than those mediated by associations.

The Brexit referendum posed new difficulties for the CBI.   Most businesses and business leaders (Wetherspoons aside) were opposed to leaving, although consumer facing companies were reluctant to put their heads above the parapet.   In any event, the CBI came under fire from leavers for its stance.  This culminated in Boris Johnson being reported as saying '**** business.'

Now Boris Johnson has called in one of his Oxford pals to set up a Business Action Council.  Maurice Ostro is a little known former frozen yoghurt manufacturer.   The new body is made up of 32 trade associations.   In the past British trade associations had a poor reputation for lack of professionalism, although doubtless they have improved in a digital age.    In any case the stated aim is to help small entrepreneurs rather than big listed companies.

If a report in the Financial Times is to be believed, the organisation comes across as a something of a shambles which is no surprise when anything emanating from 10 Downing Street is concerned.   Its business is apparently conducted in half hour group conference calls and it appears to have achieved very little in seven months.

Business has been disappointed by the lack of effective engagement with government over the consequences of a no deal Brexit, but government has been trying to establish a narrative in which business gets the blame for inadequate preparation.  Either way, the relationship between government and business is as bad as it has ever been.