What’s happened to the party long regarded as the voice of business? There is rhetorical commitment to the goal of lower taxation and curbs on business regulation. But business organisations may feel they have been almost totally cut out from the general election campaign – and this when the economy is facing a slowdown, and in Scotland a recession.
The prevailing view among Tory policymakers seems to be that simply not being the party of Jeremy Corbyn is enough to ensure them a thumping victory on polling day. Why clutter the message with awkward and tiresome manifesto commitments to business?
Is not the business vote already in the bag? And when it comes to Brexit, what promises can be made credibly ahead of what is set to be long and deeply fraught negotiations with the European Commission? Little wonder business organisations, including the Scottish Chambers of Commerce and the Federation of Small Business Scotland, have put out “think of business” reminders in the past few days.
Opposition parties may rail against the return of hard-nosed Thatcherism. But is that what is really on offer? Little wonder in the media commentariat the talk is of “Red Tory”.
The political wing of the Institute of Directors it is not. Theresa May has promised a “new deal for workers” with a pledge to offer protections for those in the “gig economy” and new rights to take time off to care for relatives. She has committed to increasing the National Living Wage in line with earnings until 2022. She has committed to fully maintain all workers’ rights guaranteed by EU law after Britain leaves the EU. The Tory manifesto includes a commitment to protect workers’ pensions in the wake of the BHS scandal; a new right to request leave for training purposes and returnships for people coming back into work after a period of time off.
The pendulum has indeed swung back from the small state, low tax and wealth chasing culture that came to dominate in the Thatcher era. It’s long been an article of faith among Tory strategists that the most effective way of creating jobs and raising earnings was through economic growth; that it is business enterprise, not government, that is the creator of prosperity.
All very well – but the central worry now is falling real incomes as inflation spikes upward. And it is the consumer sector that is still the main driving force in the UK economy.
Addressing this poses a major challenge for all parties. But any approach would need to encourage business expansion and investment as an essential precondition for a high wage economy. On that rationale alone, it is critical that the business sector is heard.
Yet business lobbies are finding it a struggle to make any impression, while party leader debates on TV have so far proceeded on the basis of competing pledges on more government spending, more employee rights and three opposition parties pledged to higher tax with little mention of how economic growth could be boosted.
Here in Scotland two plaintive voices have been raised in the past week. A poll of Scottish business owners urged election campaigners to lower the cost of doing business while offering help for the self-employed.
A new Federation of Small Businesses (FSB) survey showed that action to tackle high business costs is a key priority for more than half (56 per cent) of their Scottish members. In addition, 44 per cent of respondents want action to tackle the problems the self-employed face accessing social security support and pensions.
The poll was conducted in the last fortnight and asked firms to indicate their key issues for the next UK parliamentary term.
About two in five Scottish firms (41 per cent) said that delivering regional growth should be a key priority, with similar proportions urging infrastructure investment (37 per cent) and asking for help to create jobs (34 per cent). Over a third (34 per cent) of smaller business owners wanted the next UK government to tackle late payments.
The FSB’s Scottish policy convener, Andy Willox, said: “Hundreds of thousands of Scots are self-employed or run a small business. More people work for themselves north of the border than work for the NHS… Voters are looking for the next UK government to keep on top of the domestic agenda… Scottish business owners want governments in our town halls, in Edinburgh and in London to focus on getting our local economies moving again. ”
A similar plea has been made by the Scottish Chambers of Commerce. With Scotland on the brink of recession, it calls for the new administration’s first budget “to take decisive action to reduce key taxes to ease the burden of business costs and promote investment and growth”.
Liz Cameron, the SCC’s chief executive, said: “With Scottish businesses facing the prospect of rising inflation and weak consumer demand, the threats to our economic growth, which lags behind that of the UK as a whole, are readily apparent.
“One of the current challenges many businesses are facing is that of rising costs through higher prices and through government legislation on pensions, the National Living Wage and the Apprenticeship Levy. By tackling some of businesses’ fixed costs, this could help to free up valuable resources for business investment and job creation.
“The UK government must target reductions in business rates, rather than Corporation Tax, in order to produce the biggest boost to the largest number of businesses. Whilst this is a tax that is devolved to Scotland, clear strategic action on business rates in England would assist the Scottish government in delivering long overdue restructuring of this tax north of the border.”
She added that a temporary reduction in the rate of VAT, last implemented in 2008-09, would help tackle rising costs while boosting consumer demand. She also suggested that a permanent reduction in VAT to five per cent for tourism and hospitality activities “would bring the UK into line with the vast majority of other European nations and deliver a timely boost in competitiveness to one of our most important and iconic sectors.”
Positive and useful ideas, then. But who is listening?