Labour, UKIP, Conservative, Lib Dem

UKIP’s rise means the end of Britain's all party, pro-business policy

By: SA Mathieson
Published: Tuesday, June 3, 2014 - 11:38 GMT Jump to Comments

Many UK companies are dismayed at UKIP plans for an EU exit. Challenging "political" views can be hard for public sector suppliers but in this case it may be necessary.

Since Labour moved to the centre, Britain’s main political parties have generally supported businesses. Their reasons have varied: some politicians love capitalism, some love jobs for their constituents, and some love a reliable source of taxes. But all have been broadly pro-corporate.

That is no longer true, not because one of the major parties has changed its mind, but because Britain has a new big party – the United Kingdom Independence Party - which won the largest share of the vote in the European elections last month. UKIP is not against businesses as such, but the same cannot be said of its two defining policies.

UKIP’s main aim is to get Britain out of the European Union, something which has become a real possibility with the Conservative party’s promise of a referendum in 2017 if it wins the next general election.

Notwithstanding some daft regulations – and all bureaucracies produce these, including British bureaucracies – UK businesses have generally benefitted from membership of the EU, particularly the single market’s ironing out of national trade regulations and removal of tariffs.

Several multinationals have expressed horror at the idea of a ‘Brexit’ (British exit); the UK’s booming car manufacturing sector would almost certainly be hit, and life outside the EU would make life harder for any firm trading with its remaining members.

Ukip’s anti-immigration stance is also effectively its employment policy: not to encourage more jobs, but to reduce competition for those that already exist. Blaming immigration for squeezes on employment tends to cast businesses, including those supplying the state-sector with services, as unscrupulous skinflints who prefer cheap foreigners to locals.

All in all, it is tricky to see UKIP as a pro-business party, although it has some backing from City magnates who want to be rid of what they see as European interference. There are dangers for businesses that express political views, particularly when they are opposing policies derived from sentiment rather than facts.

The debate over Scottish independence has seen some nasty reactions: Edinburgh-based financial services firm Standard Life said in its annual report that, while Scotland is a great base, “if anything were to threaten this, we will take whatever action we consider necessary – including transferring parts of our operations from Scotland – in order to ensure continuity and to protect the interests of our stakeholders”.

It would be irresponsible for a public company to do otherwise, and Standard Life carefully avoided recommending anyone vote against independence. Nevertheless, it earned the firm an online blitzing from pro-independence ‘cybernats’.

Expressing a view is even harder for those supplying the state sector, as it can look like an attempt to lobby for specific gain. While legally it shouldn’t, it could make it harder to win business if those with opposing views are in charge of awarding contracts.

But the rise of UKIP – and, across Europe, anti-corporate politicians on both the left and right – shows why it is sometimes necessary for the private sector to argue its case. This should be done rationally and factually, rather than attacking specific people or parties, and can work better when it comes from trade associations rather than individual companies.

There are some good arguments available. UKIP’s complaints about cheap foreign labour could be undermined by firms pointing out that the minimum wage applies to all, that they advertise vacancies widely and– if they supply the public sector – that fulfilling its contracts in an efficient and effective fashion is good for service users and taxpayers as well as businesses.

As Standard Life found, stating a view even soberly can cause a nasty reaction. But that may well be better than losing arguments by failing to take part in them.

The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the official policy or position of The Information Daily, its parent company or any associated businesses.

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