Party conference season is renowned for throwing up surprises. So far, this year has been no exception.
Unfortunately for those of us involved in enterprise, an entire Labour conference passed without mention of the value business brings to communities and workers across the UK.
The simple truth is that prosperity can be created and shared more equally by politicians and business working together. Policymaking in isolation from businesses will only lead into a cul-de-sac of untested ideas, which, in the worst case, will harm those they’re meant to help.
Let’s look briefly at three Labour policies: inclusive ownership, renationalisation and the party’s plans for the UK’s world-beating life sciences sector.
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Employee engagement is hugely important for increasing productivity. Indeed, the CBI’s own Great Job report, released earlier this year, found that improving people practices and creating the right incentives for companies to ensure staff can share in their success could add £110bn to the UK economy.
But forcing companies with more than 250 staff to transfer 10 per cent of their shares to workers could see around £300bn in shares being wiped out, according to research by Clifford Chance.
And, against the backdrop of Brexit, should this scheme proceed it will repel rather than attract investors. This matters as investment is the bedrock of productivity, the only sustainable route to higher wages and living standards.
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Put simply, Labour’s plans to take a tithe from businesses sends the wrong signal at precisely the wrong time. Yes, the policy grabs headlines, but the bottom line is that it amounts to a tax on workers, pensions and savings.
Secondly, renationalising utilities and abolishing outsourcing are ideas based on ideology, not evidence, and risk turning back the clock decades to the bad old days of the past.
As a starting point, millions of people with money invested in infrastructure would see the value of their retirement savings dwindle if Labour refuses to pay market value for companies it wants absorbed by the state.
Moreover, renationalisation will hugely disrupt the investment needed to de-carbonise the energy sector. Whilst businesses agree with Labour about the need to transition to a net-zero carbon economy, there is no credible pathway to achieving it by 2030.
Firms have already helped drive forward record-breaking levels of renewable energy, and are on course to deliver subsidy-free offshore wind power in the next decade. If you’ve not already taken a closer look at what is happening in the Humber. By working with business Labour can make its plans match reality.
The final example is a policy affected firms learned about in the hastily rescheduled leader’s speech. The intervention in the UK’s life sciences sector, through measures such as compulsory licensing, would ride roughshod over an established eco-system of innovation and development if implemented.
It is yet another worrying instance of the party prioritising ideology over what works. The UK’s life science sector is world- leading, and includes a growing number of jobs in Yorkshire and the Humber. The idea that the very basis on which it operates could be removed on a whim has understandably sent shockwaves through the sector.
Given the challenges presented by the UK’s exit from the EU, it is essential politicians – of all parties and none – work with business, not against them. Rejecting evidence and relying on failed policies from the past won’t help tackle the challenges we face, nor make the most of future opportunities presented by technology.
Business has the ideas and ambition to match Labour. Firms have consistently offered to help shape an economy where prosperity is shared more widely. That offer still stands. It is now time for Labour to root its polices in reality, not ideology.