Theresa
May’s secret business love affair
Business
may find more to like in the UK prime minister’s actions than in
her words.
By TOM
MCTAGUE 11/2/16, 5:33 AM CET
LONDON – Theresa
May has finally agreed to meet Britain’s leading big business body,
after months of hostile rhetoric and cold-shouldering sparked
widespread industry alarm.
The U.K. prime
minister will hold clear-the-air talks with the head of the
Confederation of British Industry Carolyn Fairbairn in Downing Street
later this month, senior business and government sources confirmed.
The CBI’s mounting
frustration with Number 10 became public last month when Fairbairn,
its director general, publicly accused the prime minister of “closing
the door” on Britain’s open economy in an interview with the
Times.
The intervention
gave voice to broad industry concern that the new prime minister was
proving far less business friendly than her predecessor David
Cameron.
May entered Downing
Street with a promise to be guided “not by the interests of the
privileged few” but by the concerns of ordinary workers. A few
months later, her hardline rhetoric on immigration at the
Conservative Party conference, which suggested the government was
headed for a hard-Brexit outside the European single market, sparked
boardroom concern that 30 years of liberal economic consensus was
coming to an end.
It was also in stark
contrast to the vision laid out by the leading Brexiteers during the
referendum campaign, which promised to turn Britain into a
free-market dynamo outside the EU.
Fairburn’s public
attack on May infuriated Number 10, said one senior Tory source with
close connections to Downing Street. “She took a decision to go
nuclear,” the source said, before warning the prime minister’s
team continues to view Fairbairn’s close connection to George
Osborne, the former Chancellor of the Exchequer, with suspicion.
Industry insiders
privately acknowledge the interview was “intentional and
calculated” but insist it was necessary to check what they saw as
Number 10’s hostile rhetoric. “It was the kick up the arse they
needed,” one well-placed big business lobbyist said on condition of
anonymity.
Within a week, the
CBI secured a meeting with the prime minister, and talks with her
joint chiefs of staff Nick Timothy and Fiona Hill were also hastily
arranged.
“Things have been
tougher, there’s no doubt,” the big business lobbyist said.
“There isn’t the warmth there that we’re used to.”
The episode lifts
the lid on the fractious, uneasy relationship that has developed
between business and the new Conservative government. After Cameron’s
cosy embrace, May’s cold detachment has come as a shock to the
system.
More Cameron than
Cameron
On closer
inspection, however, it is hard to argue that May’s government
offers a sharp break from the pro-business agenda of Cameron and
Osborne.
Emboldened by
soaring opinion polls and the prospect of working class voters
abandoning the Labour Party and U.K. Independence Party, which are
both in disarray, it is clearly in May’s electoral interests to
pursue a “pro-workers” agenda.
But, in practice
rather than in rhetoric, May is already showing signs of being even
more friendly to business interests than the previous regime.
One of the
government’s first acts was to water down Cameron’s childhood
obesity strategy, which was opposed by much of the food and drink
industry.
Last week the
government also sneaked out changes to the apprenticeship levy on
business to answer some industry concerns, while it was reported in
the Financial Times that ministers were looking at ways to dilute the
PM’s pledge to put workers on company boards.
After a short delay,
May also signed off a new nuclear power plant at Hinkley Point and
broke years of political deadlock to back Heathrow’s extension. And
while it is the PM that has been criticized by business, it was
Cameron and Osborne who introduced the increased “living wage”
and, of course, agreed to hold the EU referendum in the first place.
“Theresa doesn’t
see many people – she doesn’t want to spend her evenings
hobnobbing.” – Government source
May is certainly not
an instinctive economic liberal like Cameron and Osborne, who used
their pro-business credentials as a wedge to differentiate the Tories
from Labour. But the prime minister isn’t an economic populist,
either, having spent her early career at the Bank of England.
In May’s inner
circle there is also far more real-world business experience than in
Cameron’s, including the Chancellor Philip Hammond, a self-made
millionaire.
City of London
veteran John Godfrey, who has spent 20 years in the Square Mile
including almost a decade at Legal & General, was quickly brought
across to head up Downing Street’s policy unit.
Katie Perrior, the
director of communication, was also persuaded to leave her job
running a successful PR firm. In contrast, Craig Oliver, Cameron’s
spin chief, was hired from the BBC.
May has also created
a business outreach team at the heart of Number 10, headed up by
former Bell Pottinger PR executive and business lobbyist James
McLoughlin, the son of Conservative Party chairman Patrick
McLoughlin. The outreach unit is strongly backed by Fiona Hill, one
of May’s joint chiefs of staff. It is tasked with regularly
consulting leading industry figures.
Business Secretary
Greg Clark and Brexit Secretary David Davis have also been meeting
business groups on a regular basis. Clark has even gone as far as to
set up formal, weekly meetings with the CBI and other lobbying
groups.
The Federation of
Small Businesses, unlike the CBI, has had regular dialogue with
Number 10 since May took office. Senior government sources said she
had also arranged two business dinners in Downing Street, hosted
financial services firms and investors in New York and held
one-to-one meetings with global CEOs in Number 10.
“Theresa doesn’t
see many people – she doesn’t want to spend her evenings
hobnobbing. But the City doesn’t have much to complain about,”
said one senior government source.
A Downing Street
source added: “We have constant, positive engagement with the
business community who, like us, want to grasp the opportunities that
Brexit provides. Whether it’s selling UK plc in India, attracting
investment from Nissan or taking a decision on Heathrow, where
politicians have frustrated businesses for decades, we’re getting
on with the job and ensuring the UK is a competitive place to set up
and run a business.”
Immigration worries
That said,
perceptions matter – particularly for the City of London.
The U.K.’s
financial services sector employs 2.2 million and generates £66
billion in tax revenues for the Treasury each year. Its ability to
continue attracting foreign investment is key to its success.
Fairbairn, the
director general, said it was the government’s “messages” that
were alarming.
“It’s very clear
from conversations we are having that the world is watching,” she
said. “International investors are watching. Companies here are
watching. And they are reading a lot into the signals of this
government about how committed they are to creating a strong
economy.”
The warning struck a
chord.
“It’s certainly
the most anti-business Tory government in a long, long while.” –
Lobbyist
One financial
services lobbyist in the City of London said it was “absolutely
true” that the government’s anti-business rhetoric was damaging
to U.K.’s international reputation.
A speech by Amber
Rudd, the home secretary, in which she said UK businesses hire too
many immigrants, in particular, didn’t go down well, the lobbyist
said, describing it as “a shock to a lot of businesses.”
“It was also very
noticeable how badly it went down in Europe,” he said. “The focus
seems to be on immigration and not access to the markets — security
over prosperity.
“In the City of
London, there is concern. It’s certainly the most anti-business
Tory government in a long, long while.”
But whatever tone
the prime minister takes, Number 10 is aware that the central demand
of business – to stay in the European Union – cannot be
delivered.
Nor can May
adequately offer industry the certainty is craves. While there is
high-level awareness of the frustration caused by the “no running
commentary” policy on Brexit, Number 10 is convinced it cannot
achieve a good deal for the U.K any other way.
Yet, beyond Brexit,
May is no radical.
The prime minister
has stolen UKIP’s clothes on Brexit and Labour’s on workers’
rights. But underneath she remains a traditional Tory, running a
traditional Tory government.
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