Mark Leftly: The City can’t toe the party line. It must talk to all the election contenders


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The Independent Online

Westminster Outlook This column was launched in January with the aim of illustrating the point that business and politics are “inextricably linked” as never before. Importantly, the financial crisis had changed everything: politicians could no longer let the City look after itself and there were, rightly or wrongly, an increasing number of votes in bashing the Square Mile.

Newspaper business sections have become noticeably more focused on politics over the past few years. House of Commons select committees, for example, have developed a remarkable profile, and they tease out detailed information from business executives through written evidence and theatrical public hearings.

Yet the lingering myth that business should only talk to the Conservatives remains.

No advantage will accrue to anyone who snubs any elected party, let alone Labour, the second most successful one that we have – nor, in the case of the Liberal Democrats, the second most powerful party in the UK right now.

Big business must start talking to all the political parties, particularly ahead of a general election where any number of outcomes are possible.

For example, should Labour’s Chuka Umunna become business secretary in a new government, it will be no use saying his party is against the City. Chief executives must talk to the shadow business secretary and understand why he feels, for example, so passionate about issues such as racial inequality on blue-chip boards.

His views are not simply derived from his Nigerian ancestry, they are merely influenced by that fact.

For example, the City might well be able to persuade the Streatham MP that notions such as quotas are unworkable. He is not inflexible on this argument and he could well conclude that setting a low target, similar to Vince Cable’s idea, is more practical.

In an era of increasingly multi-party politics, it’s also worth meeting MPs from the smallest parties as they start wielding real influence. Take Plaid Cymru: it has only three MPs, but they are intimately involved in devolution negotiations with the Welsh secretary Stephen Crabb and his Labour shadow Owen Smith.

Share a bottle of wine with Plaid Cymru’s Westminster leader, Elfyn Llwyd, and the Square Mile might understand the significance of the referendum on devolving income tax powers to Wales. I seriously doubt whether many executives in the FTSE 350 realise that this vote is likely to take place in 2017 – and why handing decisions on income tax to Cardiff will ignite the debate on whether Wales should also set its own corporation tax levies.

As for the Conservatives, the party under David Cameron is a far more reforming beast than is widely believed – with City attention focused on its almost endless ambition to contract out the state.

A Tory victory in May would mean a drive to honour the pledge to get Britain’s finances back into the black by 2018-19. That would result in all manner of opportunities for outsourcers and their sub-contractors, though it could also mean deflated wages that stifle spending.

In May, we will see one of the most fascinating national elections ever fought on these shores. No one believed that a coalition government would happen in 2010, given how rare they are, even though most polls suggested just that result in the months leading up to the election.

And if picking a winner was hard then, the polls are all over the place now. 

Business as a whole might know which side it wants to emerge victorious, but it must also grasp that different outcomes are possible and that relationships need to be forged. That means talking to all of the parties in the long election build-up, including the Tories but not to the exclusion of everyone else.

The City must be better prepared for whichever party, or combination of parties, takes power on 8 May, because one thing is for sure: political scrutiny of the City will continue to intensify no matter who is in power.