Pro-business or pro-enterprise? Why the difference matters

 

What does it mean to be a ‘pro-business’ political party?

This is not an easy question to answer, although that has not stopped many political parties from describing themselves as such. Businesses are not homogenous: from sole trader to global corporation, the requirements and priorities of firms are as diverse as the requirements and priorities of the individuals who own and staff them. Policies and laws that are highly favourable to one business or sector can be – and frequently are – disastrous for another. It is entirely possible to adopt policies that are pro some businesses, but where some businesses win others must lose. Choosing which businesses win and which lose is inherently political.

And how does a pro-business political party come to choose the winners and the losers? All too often, through a process of opaque, undemocratic lobbying which gives both politics and business a (deservedly) bad name.The Conservatives (widely considered to be the most ‘pro-business’ party in the country) quite openly sell business access to ministers at Conference for £2500 a day and maintain a network of ‘Donor Clubs’, where access to the Prime Minister and other cabinet members is available for £50,000 per year. When we had ministers, we were sadly little better: selling privileged access to government is an effective money-spinner for all political parties. And, of course, very pro-business. At least, for it is for those businesses that can afford it.

For our party, which is founded on the principles of equality of opportunity, free commerce and individual autonomy, it is (I believe) vital to resist the temptation to be ‘pro-business’ in this way.

Every cloud having a silver lining, the loss of most of our MPs (and, naturally, all of our ministers) in May has given us the opportunity to develop a relationship with private enterprise which is pro-commerce and pro-enterprise, but steadfastly not ‘pro-business’. A radical rethink of our party-business relationships will not only serve to highlight the hypocrisy of other parties’ approaches but also help us to grow support among those businesses – which is to say, the vast majority of businesses – who have neither the time nor money to lobby government, and whose values – independent, self-reliant, and indeed liberal – so often correlate with our own.

In our policy we should champion transparent government and fair, equitable tendering; relentlessly challenge back-room deal-brokering and the preferential awarding of government contracts; actively contact and engage with businesses and business people in our local constituencies (asking what we can do for them rather than asking what they can do for us); and relentlessly highlight our principled commitment to openness, equality and freedom.

We have a clean slate – let’s make the most of it. What do we have to lose?

* Simon Thornley is a member in Greenwich and joined the party after the General Election 2015. He is originally from Darlington.

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21 Comments

  • Support for the big corporations is to be encouraged, not mocked. Additionally we should support further privatisation in the public sector. The police and armed forces should be handed over to G4S for starters.

    However a more progressive corporate taxation system would make sense.

  • Eddie Sammon 14th Sep '15 - 8:42pm

    You are right to mention the problem of unequal access to lobbying.

    A problem with the pro-enterprise crowd is for too long they have ignored the self-employed or only offered them crumbs. The self-employed are often smaller and weaker than some of the big co-ops, but it is the big co-ops that have been getting prioritised as shining examples of good behaviour.

  • Conor McGovern 14th Sep '15 - 8:44pm

    Stimpson, the last thing we need is more privatisation right now – let’s start to seriously champion mutuals. On the general theme of being pro-business, (as the article says) most people realise there’s a huge difference between a corner shop and a global corporation. We could and should be carving out an identity as a party that helps and represents small businesses, but I don’t see why you need to fawn over tax-evading, slave wage-paying multinational corporations in order to qualify as pro-business or pro-enterprise.

  • David Pollard 14th Sep '15 - 8:54pm

    Front and Cener for Government dealings with Business is CONSISTENCY. Introducing regulations then changing them just when business has adjusted is very destructive. An example is the devastation being brought on our renewables industry by the Tories slashing support, extending ‘carbon pollution’ tax on fossil fuels to renewables (you couldn’t make it up!) and abolishing the need for Zero Carbon homes on new build from 2016 onwards.

    You can see now how the LibDems stopped the Tories doing this during the Coalition.

  • Peter Davies 14th Sep '15 - 9:01pm

    Transparency, impartiality and the elimination of soft corruption should be top priorities in government dealings with business. Unfortunately, you can have all that and still have a tendering system that prevents any small business from doing business directly with public bodies.

  • Conor I assume Stimpson has his tongue well in cheek with his comment here!

  • Graham Evans 14th Sep '15 - 10:04pm

    It is impossible for governments to deal directly with SMEs. This is why trade associations are so important; so for instance organisations such as the EEF, CIA, and ABPI provide a mechanism for SMEs in the respective sectors to get their voice heard. Unfortunately the Chambers of Commerce, with which many small businesses are associated, do not seem to be able to fulfil the same function, except on a few issues which affect all small businesses, irrespective of industrial or commercial sector. Perhaps LDs should be promoting more sector specific trade bodies, which would also tie in with the idea of employers driving forward the structure of apprenticeship programmes.

  • Richard Underhill 14th Sep '15 - 10:24pm

    Graham Evans 14th Sep ’15 – 10:04pm “It is impossible for governments to deal directly with SMEs.” The use of the word “impossible” invites challenge/s whatever the issue/s.
    It was though to be impossible to put a man on the moon and bring him back alive, because:
    1) it would be very expensive
    2) he would need to escape Earth’s gravity
    3) satisfactory techniques had not been invented.

  • Conor McGovern 15th Sep '15 - 1:01am

    Tim13 – Hope so! Not the first time sarcasm is lost online 🙂

  • Conor McGovern 15th Sep '15 - 1:03am

    SMEs can be supported with the replacement of business rates with a land value tax. More efficient taxation, more progressive taxation. Not easy but right.

  • Why is a small business deemed better than a big business? Weird. It’s the same but smaller! And employs fewer people. Government should support innovation, entrepreneurial spirit and businesses of any size that can grow, employ more people and, through their taxes, fund our health and education systems.

  • @Stimpson

    Ah, yes, I look forward to the reaction of G4s when we are attacked:

    “Sorry, we just don’t seem to have recruited or trained enough soldiers! You had better bring in the army!” (oops! no army!)

  • Mark,

    One very good thing about small businesses is that they are not listed on the stock market and are not therefore part of the extremely damaging version of capitalism we have in this country, where the interests of managers and shareholders are put above those of all other stakeholders including workers, consumers and the environment.

    Try reading Ha-Joon Chang “23 things they don’t tell you about capitalism” He is a Cambridge Professor BTW, before people start accusing him of being a lightweight! Countries like Germany and Japan do capitalism much better than us an the USA…

  • Simon Thorley 15th Sep '15 - 9:14am

    To clarify some of my points (which were perhaps lost in the word count):

    1. I don’t think that small businesses are ‘better’ or necessarily more efficient (or less efficient) than large businesses. Successful economies have a mix of both, with the composition of that mix determined efficiently by market forces (at least in theory).

    2. What I do think is that political parties listen to large businesses far more than small businesses, simply because large businesses have the resources to ‘talk’. Trade associations representing a collection of small businesses have, by definition, a different mandate from single large businesses in terms of lobbying: trade associations present the interests of an industry, not of a company. Moreover, the impartiality of trade associations can be called into question, shall we say.

    3. The key argument I was (trying to) make was that it isn’t possible to support all businesses equally, and that consequently choosing which businesses to support is a political decision. Our beliefs – in freedom and equality of opportunity – should guide us in deciding our priorities. The tendency for political parties to treat businesses connections as a revenue source first and foremost is necessarily going to constrain the involvement of smaller organisations – we should do our best to address this and ensure that more resources =/= louder voice in political terms.

    4.I disagree with the idea that it is ‘impossible’ for governments to deal directly with SME’s – it’s simply harder – but either way we are far from government. We have local constituency organisations, and in each constituency are businesses. Perhaps instead of expending energy telling businesses what we think every few years in a mailshot we should expend energy asking what we can do for them?

    4. I should also add that I am in business myself, and a member of the new organisation Lib Dems in Business – launching at Conference! My name’s still not Thornley, either.

  • John Tilley 15th Sep '15 - 9:15am

    I hope I will be allowed to point out that the excellent photograph at the top of this article is out of date?

    It shows cigarettes on public display, which is against the law.

    I am sure this will be because the picture predates the legislation coming into force in the Spring of this year and not because the small business person in the photograph is breaking the law.

    After all we don”t want to give the impression that the only way small businesses can be profitable is to break the law. 🙂

    Small Business
    Credit: Alex Segre / Contributor
    Caption:Portrait of Indian off-licence owner inside his corner shop, London, UK

  • Neil Sandison 15th Sep '15 - 11:55am

    There is a lot we can do to help our genuinely small businesses ,independent traders and those who want to set up a social or community enterprise .We need to regenerate and repopulate our town centres and utilise those business rates from the out of town shopping malls to regrow the heritage sites in our communities .Town centre deserts should become living and thriving communities with new local residents using the town centre as their local shopping parade. Heritage is big business that runs into the billions in terms of visitor attractions .During the recession English tourism grew whilst the former high street brands abandoned our town centres. The town centre isn’t dead its in transition and should be fully utilised as part of a mixed economy community hub

  • I take it that Stimpson’s first observation “Support for the big corporations is to be encouraged, not mocked.” was semi serious. Because whilst it is very easy to demonise big corporations for things such as their tax arrangements and stomping on smaller businesses; we do place a much larger tax and social obligation on them than small business’es. Also if you want to do expensive things, like build military jets, submarines, power stations etc. only a fool would sign a contract with an SME; even though the construction of all of these will involve many SME’s; hence why small businesses are also important.

  • Stephen Donnelly 15th Sep '15 - 12:27pm

    Good contribution Simon. The distinction I make is that we should be pro-business but against financialisation.

  • Graham Evans 15th Sep '15 - 1:43pm

    Perhaps we need to distinguish between small and medium sized enterprises There is plenty of evidence from Germany that stronger sector based trade associations are the way forward for medium sized enterprises. For instance, it is normal practice in Germany for the trade association to negotiate with the relevant trade union to set minimum rates for the industry. It also means that the voice of the the sector is much stronger because of its combined strength. Moreover, one of the strengths of some trade associations is that they bring together both large and medium sized companies under a common umbrella, often enabling the smaller enterprises to piggy back on their big brothers in terms of financial resources and expertise. Historically this worked very well for the chemical industry in the form of the CIA. Similar considerations apply to the EEF. Really small businesses (say employing less than 20 people) are more difficult to deal with if by their very nature they are unlikely to grow, as is the case for many independent service providers such as hairdressers, small shop keepers, etc. However, in Germany the Handelskammer (equivalent to our Chambers of Commerce) are very successful. Moreover, it really isn’t good enough for small business people to complain that their needs are ignored by Government, when they are unwilling to devote any of their time and energy to working with others to promote their cause. After all this is why trade unions were originally formed to give negotiating strength to otherwise industrially weak and isolated workers.

  • @ Stimpson. Good joke, Stimmo……

    …….but you forgot about privatising the monarchy to the highest bidder. Can you imagine King Richard IV (Branson or Desmond), take your pick after Charlie has been declared unfit by ATOS . We could have an X Factor vote off……with a sponsored Coronation with ten minute advert breaks……… brought to you by an environmentally friendly Hedge Fund.

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