The Queen will arrive in Westminster today to dissolve Parliament (presumably into some sort of primordial soundbite soup), which means the General Election campaigns are well and truly underway. While MPs and their challengers ardently serenade voters, their leaders will also attempt to woo business opinion, in an effort to prove they can be effective stewards of Britain’s economic recovery.
This is the most open and arguably unpredictable election in years, with any number of smaller parties potentially holding the balance of power. One thing that’s certain is that either the Conservatives or Labour will be in government, whether in a formal or informal coalition, a minority government or even winning an outright majority. Stranger things have happened.
So what are their respective policies on business, and how have they been received?
‘Red Ed’ Miliband famously talked about firms being ‘predators or producers’ back in 2011, a statement that he’s refused to take back. Business leaders have been wary ever since. Apprentice judge Karren Brady said the Labour leader 'doesn't understand business', while in a recent survey by the FT, some FTSE 100 bosses claimed that a Labour-SNP pact in particular would be a ‘nightmare’ scenario. Labour has ruled out a formal coalition with the Scottish nationalists, but this may not have assuaged those fears.
There aren’t likely to be many ‘Vote Labour’ placards to be found in the City. Miliband has called for a market share cap on high street banks to boost competition and has repeatedly struck a populist chord against the culture of bonuses in the sector, suggesting in February that employees be put on remuneration committees
Energy suppliers are also unlikely to be rooting for a Labour government. Though Miliband has ditched the energy price freeze he suggested in 2013 (because prices are now actually falling), the fact that he proposed such an intervention will cast a long shadow over his relations with suppliers.
Labour supports the living wage, and is committed to raising the minimum wage to £8 an hour before 2020, a pledge the Tories have recently matched. It also wants to abolish 'exploitative' zero hour contracts, such as those that demand exclusivity from employees or require them to be available on the off chance they'll be needed. Presumably all this will put pressure on some employers' costs, though plenty of business leaders support the idea of increasing the minimum wage, including former Tory minister and MT founder Lord Heseltine.
Though Miliband has said it will keep Britain’s corporate tax regime ‘the most competitive’ of the G7 nations, small businesses are perhaps more likely to be favourable than big ones. In February, Labour suggested a ‘cut and freeze’ on business rates, and strongly supports apprenticeships and vocational training, though in fairness, so does everyone else.
Miliband’s trump card is Europe. The uncertainty surrounding the Conservatives promised referendum on Britain’s EU membership (one of Sir Martin Sorrell’s sinister ‘grey swans’) has unsettled the business community, which mostly fears the consequences of a Brexit. Labour has ruled a referendum out, and – if the full page ad it took out in the FT criticising the Tories’ commitment to one is anything to go by - will pin its hopes of winning business support on this.
The Tories don’t just have business policies, they have a ‘long-term economic plan’. Though austerity hasn’t exactly been popular, the Conservatives have gained credibility among business leaders for the way they handled the downturn and nascent recovery. It wouldn’t be unreasonable to presume a Tory victory would mean more of the same.
Though widely seen as the more pro-business of the two main parties, the Tories have ruffled a few feathers. Pensions firms won’t have been happy with Chancellor George Osborne’s budget announcement allowing over-55s to sell their annuities or not to opt into them in the first place. Bankers also won’t have been entirely content at his raising of the bank levy, though it’s unlikely to cause them to shift camps.
PM David Cameron’s strongest weapon against Labour’s business credibility is the budget. Miliband et al make a lot of noise about protecting welfare and public service spending, but (other than a proposed income tax hike) don’t give much of an idea how they’d fund it without increasing either tax or the deficit.
There aren’t really enough CEOs for business opinion to translate directly into votes, but there’s a reason both sides are keen to court it. Credibility on the economy does swing voters, who haven’t forgotten the recession. On that front, the Tories have the edge, but it may not be enough to clinch it for them.
The current average of polls puts both parties on around 33%, which makes a majority government unlikely. The Lib Dems are largely sticking with the Coalition’s deficit-reducing and business records (unsurprisingly, given Vince Cable’s tenure as business secretary), but their polling performance (around 8%) means perhaps they aren’t the most likely minority partner in a future coalition.
As for UKIP, the SNP and the Greens, it’s likely business and economic policy will be far from the most important issue on their minds, should they get a sniff of power. For now, the jury's out on whether that probably disinterest will be good or bad for UK plc.