Comment: Politics can’t hold enterprise to ransom

Business writer Kristy Dorsey. Picture: Robert Perry
Business writer Kristy Dorsey. Picture: Robert Perry
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HOURS before his death in a plane crash on Monday, Christophe de Margerie, the boss of French oil giant Total, warned an investment conference in Moscow that business today is being “held hostage by politics”.

His audience included Russian prime minister Dmitry Medvedev, who is fighting international sanctions imposed because of the conflict in the Ukraine. Total has been operating in Russia since 1991, and in 2012 pumped 179,000 barrels of oil per day out of the country, nearly 8 per cent of the group’s overall global production.

Given his audience, the message from Total’s late chief executive was to be expected. Explicit in his view that sanctions are “both unfair and unproductive”, de Margerie firmly believed in the separation of business and politics.

But such divides are never clear-cut. Even here in the UK, the ongoing game of kicking around big business continues into extra time.

Banks have been the easiest target since the onset of the financial crisis in 2007, and with good reason. As wave after wave of scandal has revealed, many parts of this formerly staid and trusted industry recklessly lost touch with both their moral compass and their raison d’etre.

The raft of new and overhauled legislation that followed was aimed at clearing up the financial wreckage, but it also proved fertile territory for political point-scoring. Promises to punish the big bad bankers by capping their salaries and clawing back bonuses played well to the gallery.

So too did moves to take money collected from Libor fines and distribute it to charity, with armed forces, mental health and youth concerns among the areas benefiting.

Not to be outdone by the governing coalition, Labour leader Ed Miliband has said his party will pay for youth training with a tax on bankers’ bonuses. Proposals to rein in other supposedly rapacious industries include last year’s commitment to freeze energy prices, and promises at this month’s party conference to put a levy on the profits of tobacco groups to fund cancer research.

Chancellor George Osborne was also talking tough at the Conservative party’s annual convention at the end of last month, vowing to clamp down on tax avoidance by foreign multinationals.

His “Google tax” struck a popular chord and grabbed the desired headlines, but there was scant detail as to how “we will put a stop” to what is, as things stand, legitimate tax avoidance. More information is due to follow in the Autumn Statement.

No-one would argue against the punishment of misconduct. Taxes should be paid, and the public should be protected from financial abuses.

But the politics being played on the field of business is starting to look nearly as rash as the commercial fouls that brought the game into disrepute. Like all good referees, lawmakers should be the arbiters of a fair contest, and not the centre of attention on the pitch. «