And now down to business

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Politics is a profession, but it isn’t business. There is something they have in common, though, which may become very important now Britain’s election is over and won.

Over the last few weeks, I have heard many leaders of EEF member firms bemoaning an election campaign in which personal abuse and casual spending pledges have eclipsed real debate on how Britain can earn its living for the future. They are right when they draw attention to the real big questions the new government must now return to tackling.

But if the campaign felt unedifying, reflect on what really happened last night. The Conservatives’ strategists, of whom Chancellor George Osborne is the leading light, have given a masterclass in consistently sticking to a plan. Five years ago they decided the election story: the government fixes the public finances, oversees economic recovery, shows leadership, and goes to the country on a clear choice between that track record and the inconsistent policies of the Opposition. Five years on, the coalition government was still on that script and that consistency paid off.

Now here is the crossover with what business needs from the new government. EEF members have made it very clear that continuity and stability in business policy are crucial. The last government set a good path for infrastructure decisions and investment, by the end of the Parliament had begun to sort out skills policy, and had an industrial strategy and an approach to encouraging innovation that had traction. This gave firms some hope that Britain could address its productivity problem and export deficit, and that rebalancing the economy was doable.

The question now is whether the new government will show the same consistency and support in its approach to business policy it has shown in its political strategy. With the Conservatives no longer constrained by coalition, and the Lib Dem star Vince Cable no longer counterbalancing a suspicion of industrial strategy that runs deep in both the Treasury and important parts of the Conservative tradition, just how safe is the existing suite of policies when the coming Spending Review will be seeking billions in savings? And the new government will also, we assume, be proceeding with a referendum on Britain’s EU membership, with eurosceptical Conservative backbenchers feeling feistier than they have for a decade: there is still clearly potential for upheaval.

EEF members’ ask of this re-elected Prime Minister is more of the same. The paradox is that the circumstances of his re-election actually make policy stability harder. To keep things on track, it may be a pre-requisite for the business department BIS to be led by a Tory big beast who can take Treasury orthodoxy on and manage the Conservative eurosceptics. Michael Heseltine played that part once; now who might this generation’s Tarzan be?

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