James Moore: Big business does not understand it has a problem

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The Independent Online

Is Britain anti-business? That is a view in corporate circles as the debate about executive pay rages. The City and the wider business community feels unloved and this was apparently expressed to David Cameron at a meeting of his business advisory group yesterday.

Have the chief executives got a case, though? What has made business leaders particularly unhappy is the debate about pay, and the political response to it which came to a head over Royal Bank of Scotland's (RBS) proposed bonus for Stephen Hester. The feeling is that having agreed to a deal he was "bullied" out of taking a bonus that was rightfully his.

Then there is the view that Mr Hester's predecessor, Fred Goodwin, lost his knighthood thanks to an attack by the mob.

These are the issues making people angry together with a general unhappiness at the tone of recent rhetoric, particularly over executive pay. The trouble is, once again, this opens business leaders up to the charge of moaning and acting out of self-interest.

Sir Richard Lambert, in one of his last speeches as director-general of the CBI, argued that business leaders risked being seen as "aliens" who were "living in a different galaxy" to the rest of the public given the increasing gap between executive pay and everybody else's.

That risk is becoming reality. The current debate is not really being driven by Westminster or even the dreaded "meeja". It is coming from the grass roots up. If some of those from the business advisory group cared to spend a few hours in a pub, as opposed to the more rarefied surroundings they are used to, they might well hear it.

And it is not as if business has done badly out of the Coalition. Yes the top rate of tax remains high, but corporation tax is coming down to a level that is significantly lower than in the European Union's other "big" economies (and the US). The debate is becoming toxic. But this isn't being helped by the lack of any acknowledgement from the business community that, on the issue of executive pay, it has a problem.

It is also not as if there weren't other, quite justified criticisms business could make. This country's distressingly poor skills base, for example. The crass decision to downgrade various vocational qualifications. Then there are the immigration policies that businesses feel will deny them employees with the skills they need.

People need to face an uncomfortable fact. There is no manufacturing Mittelstand in Britain to fuel an economic revival as there is in Germany. This country needs big businesses to create jobs and spearhead our recovery.

The leaders of those businesses appear, however, not to see that in the stance they are taking they are making it harder for the Government to make life easier for them.

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