IN CASE you have not noticed, this is the week when the party conferences begin to come into full cry: the Liberal Democrats now, Labour next week and the Tories after that. What should the business community try to learn from them?
Party conferences are for party activists rather than the world at large, and they are certainly not for the business community. There is a chasm between what the top brass of a party does and what their foot soldiers want them to do. But while ministers and shadow ministers are far from prisoners of their constituencies, the way they package and present their ideas to the other ranks does give a feel for the way policy will develop. So what should business look for?
The most important signals will come, or not come, from the Government. Early warnings will be hints of what could become policy in the next term, now we are probably little more than 18 months from the next election. As far as business is concerned, nothing significant, will happen in the present term, because there will be no major new policies affecting business. Inevitably, company taxation tops the list of concerns. The Government has cut some rates (particularly for smaller companies) but engineered these so that the actual tax take from the corporate sector has risen sharply. What the Chancellor presented as tax cuts are actually tax increases.
So a distinguishing line must be drawn between words and deeds. Are there any signs that the Government is concerned it is taking too much from the company sector and thereby damaging its performance internationally? Is there concern about the increased complexity of the tax system under Labour? Remember, there will be no definite statements of policy - we are not looking for that - merely hints about the direction.
Next, regulation: governments of both parties have repeatedly declared wars on red tape. In practice, both added to the administrative burden on companies. This disadvantages small firms, because larger ones can hire people to cope.
By world standards, UK com-panies are not heavily regulated, which is one reason the business start-up rate is high by European standards. But it is low in comparison with the United States, and this should remain a concern. So look for policies on regulation under a new Labour government. Rhetoric about compelling companies to do this, that or the other is a bad sign for employment. As continental European governments found, you can compel companies to do more or less anything, but you cannot make them create jobs.
There is one further specific thing to look for: comment or concern about the social implications of electronic commerce. Last week Tony Blair himself pledged support for e-commerce here, but such trade can flit more or less anywhere in the world. Attracting business that can go anywhere means creating what will legally be an "off-shore" zone here for it, which will be less regulated than conventional trade. Many Labour supporters will feel ambivalent about that.
Two final points for the Labour conference: listen for the detail and try to influence the debate. The run-up to an election is an excellent time for industries to lobby for their particular concerns. Making sure individual MPs and union representatives are properly briefed about such concerns should be a key element of company policy.
Better still, companies should learn to use the foot soldiers of the conference, particularly union representatives, to argue their case. The attention span of ministers is very short and the background noise in their lives tends to obscure the signals they need to hear. The conference is an opportunity to push messages through the noise with a chance of being heard.
For the Tories, the game is different. As far as current policy is concerned the party does not matter, so listening for signals is less important. What matters are new ideas. Business people need to know whether there are radical, pro-business ideas in the party that might become runners during the next parliament. The Tories do not need to win the election for this to matter. All they need to do is develop ideas with electoral appeal, and if the appeal is powerful enough the ideas will be pinched by Labour.
Where might these ideas lurk? They will not be grand macro-economic themes, or position statements about policy on the euro. The interesting areas will be in practical policies towards business, particularly small ones. These form a natural constituency for the Conservatives but they have been a neglected one.
Are any Conservative thinkers focusing on the financing gap that seems to exist between the pounds 100,000 of capital (which can come from savings, family and friends) and the pounds 500,000 or so minimum of the venture capital firms? Are there ideas about cutting regulation, beyond, say, lifting the VAT threshold, which does not seem to be a serious deterrent to business growth?
More significantly, are there new vote-winning policies towards smaller businesses that can be developed well before the next election - and can be used to nudge Labour into something similar in its policies for the coming term?
The most important message for the business community is that party conferences are an ideal opportunity to identify and build support. Politics do not matter as much as they used to, partly because both parties are nominally (and to a large extent actually) pro-business, and partly because globalisation is reducing the power of national governments in commercial fields as in others. But the views and demands of big business, not small, inevitably attract most political attention.
Big business can hire the professional lobbyists to talk to the ministers. Small businesses have to rely on individual delegates - the local MP, or maybe a union official. Party conferences are one of the few moments where the individual gets noticed. Time for a quick call to your local MP?Reuse content