Why government and business don't really mix

'No right-thinking person would these days feel comfortable with the idea of un-elected trade unionists running the country. Why should we feel any happier if it is businessmen pulling the levers of power?'

Businessmen and industrialists are cropping up in Government all over the place these days. It's all part of Tony Blair's new "inclusive" approach to running the country. Nobody would argue too much about the idea of this, even if New Labour's beholden view of the "can do" attributes of successful businessmen sometimes seems a trifle naive. Business can teach government a lot about effective decision-making, problem-solving and the needs of the economy.

But in the end public policy is for civil servants and the politicians who control them, and business is for businessmen; the two usually and rightly make uneasy bedfellows. No right-thinking person would these days feel comfortable with the idea of un-elected trade unionists running the country. Why should we feel any happier if it is businessmen pulling the levers of power? Within their own organisations their control is already almost absolute. Do we really want them dictating public policy, too?

Even accepting that they do have a valuable contribution to make to formulating policy (which they plainly do), the appointment of particular individuals to key positions carries obvious dangers. The potential for conflict of interest and embarrassment is already apparent.

One of Mr Blair's business buddies - Robert Ayling, chief executive of British Airways - already finds himself embroiled in strike action, his handling of which has so far proved questionable, to put it at its most charitable. Now Martin Taylor, chief executive of Barclays Bank and recently appointed to head the Government's review of tax and benefit, finds himself facing strike action, too. It would be silly to suggest Mr Blair's association with these two people means the Government is wholly in support of whatever they do in their own businesses. Crony-ism nonetheless invariably involves a set of shared views, attitudes and a high degree of mutual support. One man's inclusion is another's exclusion.

Nor is it just the forces of Old Labour that feel disturbed by it all. John Redwood's attack on Lord Simon, minister for competitiveness in Europe, may seem nit-picking and petty, but the former BP chairman was indeed less open than he should have been about his substantial shareholding in BP, and arguably he shouldn't have the shares at all now that he is a government minister. Furthermore, the wider potential for conflict of interest in Lord Simon's position is only too obvious in a world where the power and influence of the oil companies is a constant source of controversy and friction.

The same sort of niggling doubt might be expressed about the appointment of Peter Davis to head up the welfare to work review. He's the man from the Pru, which lest it be forgotten has one of the worst records in the industry in clearing up the pensions mis-selling scandal. Strangely, the Pru has been largely untouched by the "name and shame" campaign to force the industry into action launched by Helen Liddell, Economic Secretary to the Treasury.

The Government may also have underestimated the degree to which these appointments would anger businessmen not summoned to the burdens of public office. The latest example of this effect is the grandly named "Music industry and new Creative Industries Task Force" being established by Chris Smith, the Heritage Secretary. Mr Smith announced the task force at the same time as changing the name of his department to the Stalinist- sounding Department of Culture, Media and Sport. "My department's old name was backward-looking and did not do justice to the range of work we cover," Mr Smith insisted. Tee-hee, went everyone in the music industry.

Until they learnt who was going to be on the task force, that is. With Richard Branson, Sir David Puttnam, Alan McGee (of Creation Records) and various other assembled luvvies nicely tucked in to the action, the task force begins to look more like an opportunity for the promotion of self- interest than anything else. This observation would seem a little unfair but for the fact that the task force's objective has been defined as that of increasing "creative activity and excellence in the UK". Wooliness like this rather invites such cynicism. That's certainly how much of the music industry views it.

I shouldn't perhaps be overly critical about all this. The Government is at least showing willing in attempting to establish a partnership with business. Moreover, the attempt to engage traditionally detached business people in finding solutions to complex social and economic problems is one that obviously deserves support. On the other hand, the Government may be storing up all kinds of trouble for itself with its business-led task forces. You can hardly blame business people for getting upset when their main competitor is helping to set government policy.

What ever happened to "irrational exuberance". You remember. That was the thing Alan Greenspan went on about late last year when the Dow Jones Industrial Average was at just 6,400. If the chairman of the Federal Reserve Board thought the market was too high then, what does he think now with the Dow more than 25 per cent higher at more than 8,000.

Whatever it is, he's not saying. He was silent on the matter during his Congressional testimony this week. There was no talk of a stock market bubble, or of pricking it with a sharp rise in rates. Indeed, he had nothing but praise for the US economy, which seems to be jogging along with the ease of a highly trained long-distance runner.

So has he changed his mind? Or is it simply that he doesn't want to be the cause of a stock market crash, as he nearly was last time he opened his mouth on the matter? It is probably a combination of the two. Mr Greenspan has already qualified his remarks about irrational exuberance in markets by suggesting the exuberance could be justified by strong earnings growth.That is what corporate US seems to be delivering right now.

Even so, you have to believe the business cycle has been abolished for good to think stock prices justified at these levels. Perhaps because the US is the US - easily capable of accommodating the whackiest of sects and ideas - there are some quite respectable economists who actually believe this. Most of us will continue to take a rather more sceptical view, however, and for us, awaiting a big stock market correction has become a bit like waiting for the death of Deng Xiaoping. Everyone knows it will happen eventually. It is just a question of when.

Personally I'm rather hoping it won't be for fortnight or so yet, because I wouldn't want to miss the fun. I'm off to France for a few weeks to take advantage of the soaraway pound, another phenomenon lamentably unlikely to last for long. Unless, of course, you believe that Britain too has discovered economic nirvana. Mmmm.

Premier League Live
footballLIVE Follow all the Premier League action as it happens
The slice of Prince Charles and Princess Diana's wedding cake and the original box from 29 July 1981
newsPiece of Charles and Diana's wedding cake sold at auction in US
Life and Style
3D printed bump keys can access almost any lock
gadgets + echSoftware needs photo of lock and not much more
James Argent from Towie is missing, police say
peopleTV star had been reported missing
Arts and Entertainment
Gregg Wallace in Summer's Supermarket Secrets
tv All of this year's 15 contestants have now been named
i100(and it's got nothing to do with the Great British Bake Off)
Arts and Entertainment
Inside the gallery at Frederick Bremer School in Walthamstow
tvSimon Usborne goes behind the scenes to watch the latest series
Life and Style
A picture taken on January 12, 2011 shows sex shops at the Paris district of Pigalle.
newsThe industry's trade body issued the moratorium on Friday
Arts and Entertainment
Could we see Iain back in the Bake Off tent next week?
tv Contestant teased Newsnight viewers on potential reappearance
Life and Style
Silvia says of her famous creation: 'I never stopped wearing it. Because I like to wear things when they are off the radar'
fashionThe fashion house celebrated fifteen years of the punchy pouch with a weighty tome
ebooksAn evocation of the conflict through the eyes of those who lived through it
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
Arts and Entertainment
Cara Delevingne made her acting debut in Anna Karenina in 2012
film Cara Delevingne 'in talks' to star in Zoolander sequel
Mario Balotelli pictured in his Liverpool shirt for the first time
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Network Engineer (CCNP, CCNA, Linux, OSPF, BGP, Multicast, WAN)

£35000 per annum: Harrington Starr: Network Engineer (CCNP, CCNA, Linux, OSPF,...

DevOps Engineer (Systems Administration, Linux, Shell, Bash)

£50000 per annum: Harrington Starr: DevOps Engineer (Systems Administration, L...

Data Scientist (SQL, PHP, RSPSS, CPLEX, SARS, AI) - London

£60000 - £70000 per annum: Harrington Starr: A prestigious leading professiona...

Financial Technical Consultant (C++, C#, Finance, MSc, PhD)

£50000 per annum: Harrington Starr: Financial Technical Consultant (C++, C#, F...

Day In a Page

Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

The phoney war is over

Russian troops and armour pour into Ukraine
Potatoes could be off the menu as crop pests threaten UK

Potatoes could be off the menu as crop pests threaten UK

The world’s entire food system is under attack - and Britain is most at risk, according to a new study
Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
From Mozart to Orson Welles: Creative geniuses who peaked too soon

Creative geniuses who peaked too soon

After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
Caught in the crossfire of a cyber Cold War

Caught in the crossfire of a cyber Cold War

Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

Salomé: A head for seduction

Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

British Library celebrates all things Gothic

Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

Is the Hard Rock Café worth fighting for?

The restaurant chain's owners are currently embroiled in a bitter legal dispute
Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

In search of Caribbean soul food

Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
11 best face powders

11 best face powders

Sweep away shiny skin with our pick of the best pressed and loose powder bases
England vs Norway: Roy Hodgson's hands tied by exploding top flight

Roy Hodgson's hands tied by exploding top flight

Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

Di Maria and Ronaldo: A tale of two Manchester United No 7s

They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone