The approach of business to general elections is not what it was.
Not that long ago, it was common for big corporates to make donations to political parties, including big FTSE 100 names such as SmithKline Beecham, United Biscuits, General Accident and Whitbread.
Most of these donations would go to the Conservatives but there were some companies, such as Marks & Spencer and Pearson, which also made donations to other parties.
Some, such as Hanson – whose founder Lord Hanson was a loyal supporter of Margaret Thatcher – continued to do so even after the 1992 Cadbury Report recommended companies stop making contributions to political parties.
Even after the political contributions dried up, FTSE 100 chief executives were not shy about endorsing or criticising politicians at election time.
In 1997, a number of well-known business people including Robert Ayling of British Airways, Bob Bauman of the old British Aerospace (now BAE Systems) and George Simpson of GEC endorsed Tony Blair’s Labour ahead of that year’s election, while John Major’s Conservatives also had plenty of backers.
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Business people were also happy to speak out about particular policies. Ahead of the 1997 election, BT’s chairman, Sir Iain Vallance, lashed out at Labour’s proposals for a windfall tax on the privatised utilities while Brian Stewart, chief executive of the pubs and brewing giant Scottish & Newcastle, criticised Labour’s plans to create a Scottish Parliament with tax-raising powers.
None of that happens any more. Most CEOs, while having their own political opinions like the rest of us, prefer to keep them to themselves. The more astute, realising that it makes sense to speak to politicians, are careful to ensure they are seen to be behaving even-handedly and not expressing a preference for one side or the other.
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Business wish-lists
That does not mean businesses do not have their own wish-lists of policies.
This is particularly true of small businesses. Their wish-list has not changed in the last couple of decades and is topped by wanting a change in the law to enforce prompt payments from larger businesses to their suppliers and the reform of business rates, which is also a bugbear for larger companies in sectors such as retail and hospitality.
Higher up the corporate food chain, what big businesses crave most is clarity and consistency in policy.
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4:45
Why has an election been called?
As Dame Amanda Blanc, chief executive of insurance, savings and pensions giant Aviva, told Sky News today: “Obviously we’re apolitical. What we want is for the environment to be one where we can invest, with certainty. You know, we want consistency and stability and so that whoever is the winner of the election, we want the election to be decisive, and we really want there to be certainty for us to be able to invest in things like UK infrastructure.”
Dame Amanda, who has served on both the prime minister’s business council and on the business taskforce put together by shadow chancellor Rachel Reeves, added: “We’ve invested £9.5bn in UK infrastructure in the last three years.
Image: Dame Amanda Blanc has been chief executive of Aviva since July 2020.
“Our commitment is £25bn over the next 10 years. In order to do that, you have to have a more certain environment. And so that’s what we look forward to.”
That desire for stability and consistency was why the brief tenure of Liz Truss in 10 Downing Street was so damaging and why, off the record, a lot of business executives will admit to being grateful to Rishi Sunak and Jeremy Hunt for restoring order to public finances after the firestorm created by Kwasi Kwarteng’s mini-budget in September 2022.
They feel it is the first time, since David Cameron was in office, that a PM had the corporate world’s back. Theresa May alienated a lot of globe-trotting CEOs with her infamous 2016 speech in which she said “if you believe you are a citizen of the world, you are a citizen of nowhere”. She was replaced by Boris Johnson who, as foreign secretary in 2018, infamously said “f*** business.” And then came Ms Truss.
If business leaders are grateful to Messrs Sunak and Hunt, there is also warmth towards Sir Keir Starmer and Ms Reeves for their constructive approach.
Yes, there is some unease about deputy Labour leader Angela Rayner’s proposals to ban zero-hours contracts, end fire and rehire and to give workers full rights and protections from day one of their employment.
But there is a sense that after the leadership of Gordon Brown, Ed Miliband and Jeremy Corbyn, who went into the 2019 election campaign threatening to nationalise much of the energy industry, the water industry and BT’s broadband network, this is the most pro-business Labour leadership since the days of the much-missed Tony Blair.
While big businesses chiefly seek stability and consistency of policy, that is not to say they do not have specific wish-lists of their own.
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Sky News election studio unveiled
The big leisure, hospitality and luxury goods companies would like the restoration of VAT-free shopping for international visitors, the loss of which, they argue, has driven business away from the UK to destinations like Paris and Milan.
Most businesses with property interests – which is nearly all of them – would like to see a more coherent planning regime. Housebuilders would like a relaxation of rules requiring a proportion of housing developments are devoted to affordable homes.
Shoplifting scourge
Retailers would like the police to be required to make tackling the scourge of shoplifting a greater priority.
Manufacturers, in particular, would like to see an easing to some trade frictions that have built up since Brexit.
And carmakers – currently under threat of being fined if a certain proportion of their sales are not electric vehicles – would like to see a restoration of government incentives to buy EVs and for the roll-out of EV charging points.
Businesses, it is often pointed out, do not have votes.
But they do create the jobs and wealth on which this country relies. Those hitting the campaign trail over the next six weeks will need no reminding of that.
Weekly wages have increased by just £16 in 14 years when inflation is factored in, according to research from living-standards think tank the Resolution Foundation.
Workers have experienced an “unprecedented” pay squeeze since 2010 with real weekly wage growth of £16 due to two crises and Brexit, the foundation said.
The sum factors in price rises across the time period.
Economic challenges in the form of the financial crisis of the late 2000s and the current cost of living crisis coupled with Brexit’s economic effects have acted to suppress wage growth, it said.
It’s a significant slowdown from the rises seen in the 14 years up to 2010 when wages rose £145 a week. It’s also small when compared to other large economies.
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If wage growth had been at the level of Germany and the US, people would be earning £3,600 more a year, equivalent to £69.23 a week.
While wages have been rising faster than inflation in the past few months they haven’t been high enough to overcome a nearly two-year period where the price of goods was going up more quickly than pay packets.
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While the latest official inflation reading showed prices rose 2% and wages rose 6%, price rises fuelled by high energy bills after the invasion of Ukraine had been eroding the benefits of salary increases.
Those high energy costs followed pandemic-era price hikes after lockdowns caused problems in product supply chains. Households have been struggling with high bills particularly since energy bills skyrocketed in the early months of 2022.
Improvements for the lowest-paid
Wages have, however, increased more for the lowest earners as the minimum wage has been raised, the Resolution Foundation said.
Those in traditionally low-paying jobs such as cleaners, bar staff and shop workers have seen their typical hourly pay rise against inflation and is now 20% higher than in 2010. It’s significantly higher than the typical pay growth across the workforce, which is 1.6%, the thinktank said.
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2:04
IFS director: Voters in the dark on tax and spending plans.
A rise in the minimum wage in 2016 was credited for this.
It’s resulted in hourly wage inequality between low and median earners reaching the lowest level since the mid-1970s.
The minimum wage is now one of the highest in the world, the foundation added.
Employment gains and losses
Gains were also made in the number of people at work in the UK, though it is one of just six countries in the Organisation for Economic Co-operation and Development (OECD) group of nations that has yet to return to its pre-pandemic employment rate.
Of the 38 OECD countries only the UK, Latvia, Iceland, Chile, Colombia and South Africa have fewer people in employment than before the COVID-19 pandemic outbreak.
Investors in Getir, the food delivery group which is abandoning its UK operations, have approved a break-up of the company that will trigger a fresh capital injection of up to $250m (£197.5m).
Sky News has learnt that Getir, which is based in Turkey, held an extraordinary general meeting on Sunday at which shareholders backed plans to split it into two independent companies.
The first will consist of its food and grocery delivery operations in Turkey, and will be majority-owned and controlled by Mubadala, the Abu Dhabi state investment fund.
This business will be led by Batuhan Gultakan, a current Getir executive, while Nazim Salur, the company’s founder, will have no active involvement in it.
Instead, Mr Salur will run the other standalone business, comprising Getir’s other assets, including Getir Drive and BiTaksi, the ride-hailing services.
Getir’s withdrawal from the UK and other European markets, confirmed in the spring, represented a full-scale retreat for a company once-valued at nearly £10bn.
Insiders said that as part of the restructuring, Mubadala had agreed to inject up to $250m into the company, both to facilitate the orderly wind-down of its UK and European arm and to invest in growing its Turkish food delivery business.
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Mubadala is said to be optimistic about the outlook for the Turkish market, and that the restructuring would leave the company in a much stronger position, according to another source close to the situation.
Voters have been left in the dark over how the major parties will be able to fund their spending commitments, a respected thinktank has said, offering just “thin gruel”.
The Institute for Fiscal Studies (IFS) took further aim at what it described as a “conspiracy of silence” from both the Conservatives and Labour on how they could meet the challenges they identify, such as reducing NHS waiting lists.
Launching its report on the crucial documents, IFS director Paul Johnson warned that spending on many public services would likely need to be cut over the next parliament unless government debt was to rise or taxes increased further.
He pointed to pressure from a 60-year high in government debt levels at a time of a near-record tax burden.
Much of the blame for this was a £50bn a year increase in debt interest spending relative to forecasts, he explained, and a growing welfare budget in the wake of the COVID pandemic and cost of living crisis that followed Russia’s invasion of Ukraine.
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5:19
Labour manifesto versus the rest
“We have rising health spending, a defence budget which for the first time in decades will likely grow rather than shrink, and the reality of demographic change and the need to transition to net zero,” Mr Johnson said.
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“Add in low growth and the after-effects of the pandemic and energy price crisis and you have a toxic mix indeed when it comes to the public finances.”
“These raw facts are largely ignored by the two main parties in their manifestos”, he declared, describing the information presented to voters as a “knowledge vacuum”.
“In line with their unwillingness to face up to the real challenges, neither main party makes any serious new proposals to increase taxes”, Mr Johnson said.
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6:21
What is in the Conservative Party manifesto?
“Consistent with their conspiracy of silence, both are keeping entirely silent about their commitment to a £10bn a year tax rise through a further three years of freezes to personal tax allowances and thresholds.
“Both have tied their hands on income tax, NICs, VAT and corporation tax. The Conservatives have a long list of other tax rises, and reforms, that they wouldn’t do. Labour have ruled out more tax options since the publication of the manifestos.
“Taken at face value, Labour’s promise of no tax increases on working people” rules out essentially all tax rises. There is no tax paid exclusively by those who don’t work. Who knows what this pledge is really supposed to mean,” he concluded.
What about the other parties?
The IFS said the Liberal Democrats had bigger tax and spend policies than Labour or the Conservatives.
It also determined that Reform UK and the Greens offered much bigger numbers but declared that what they propose is “wholly unattainable”, helping to “poison the entire political debate”.
Mr Johnson concluded: “The choices in front of us are hard. High taxes, high debt, struggling public services, make them so.
“Pressures from health, defence, welfare, ageing will not make them easier. That is not a reason to hide the choices or to duck them. Quite the reverse. Yet hidden and ducked they have been.”