Is the government in danger of handing over its reputation for being pro-business to Labour?
William Hague’s message in yesterday’s Sunday Telegraph that businesses should “work harder” to promote growth was certainly bold.
At a time when the economy is stagnating and the government’s strategy is increasingly being questioned, turning round and blaming the sector of the economy you’re relying on to turn that round seems like a reckless strategy.
Before we get on to why it’s not a good idea to blame business for not supporting growth, let’s mention why Hague has a point:
- The govt is implementing the cuts programme many business groups have supported, and is sticking to it.
- Corporation tax is low and getting lower – on its way down to 20 per cent.
- Embassies around the world are pushing UK trade as their top priority, and the prime minister has taken huge business delegations on state visits with him on several occasions.
Although as Jim wrote on Saturday, some businesses do have some specific gripes, including:
- They are annoyed at how ministers have fanned controversies over executive pay.
- They think ministers are being slow about getting infrastructure projects going.
- They want employment regulations to be slashed further.
Tactically, the Tories (it does seem to be a Tory message so far, rather than a coalition one) may think they are on strong ground, by echoing Norman Tebbit’s “get on your bike” line, which proved popular in the wake of the 1981 riots.
But there are also strong reasons the new message may be a tactical blunder:
- It alienates the groups which the government have relied on to provide support for their economic strategy.
- After Ed Miliband’s 2011 conference speech, the Tories said his division of companies into “predators” and “producers” proved that the Labour leader was anti-business. At one stroke, Hague has put Miliband and business into alignment, so undermining this entire attack line.
- The headline on the Telegraph read: “Work harder, William Hague tells Britons”. It is easy to see how this might be misunderstood and read as if ministers are now telling workers that they are being lazy. Hardly the words of a government that wants to put itself onside with the key demographic of voters who regard themselves as “hard-working people”.
Given the risks, it is possible that Hague simply went further than he meant to, and this isn’t a deliberate strategy at all. But if that is the case, then Philip Hammond also made the same mistake, telling the BBC’s John Pienaar that businesses were “whingeing” about the government not doing enough to boost growth.
But if this is something we’re going to be hearing more of from ministers, than it doesn’t seem to have cross-coalition support. Vince Cable was just asked about it in the Commons, and noticeably failed to back the foreign secretary. Instead he praised Hague for what he called his “commercial diplomacy”. UK PLC might disagree.
Jim Pickard
Kiran Stacey