Few other issues have proven as divisive in modern times as Brexit. As an issue it’s stoked tension among friends and family, between colleagues, political parties and even the business community. Yet, the latter is perhaps unique in its portrayal.
Through the guise of multinational corporations and big business groups – themselves riven with self-interest – the media and establishment has continued to project the community as ‘speaking with one voice’, sympathetic to the EU cause. Scratch beneath this veneer, however, and it has always been clear that the notion of a ‘single voice’ was a falsehood.
The CBI’s membership is overwhelmingly dominated by larger corporations and multinationals; those most content with their pro-EU, crony-capital, managerialist approach.
It may seem counterintuitive that when Boris Johnson, in frustration at what appeared to be the business community’s refusal to acknowledge the opportunities Brexit would create, said “Fxxx Business”, that there were many in the business community, myself included, who were sympathetic to his frustration. The problem these businesses face is that their voice is not represented or at best under-represented in both Government circles and the media. The natural go-to for a ‘view from business’ is the CBI; yet the CBI only has 1,500 members out of a total of almost six million UK businesses. Its membership is overwhelmingly dominated by larger corporations and multinationals; those most content with the CBIs pro-EU, crony-capital, managerialist approach.
I often find myself cringing when I hear CBI representatives spouting on the media, claiming they speak for the business community and thinking, not me ‘sir’ or ‘ma’am’. Looking back there have been so many crucial decisions where history has shown them to have been on the wrong side of the fence. In the early 80’s they fought Thatcherite reforms to the economy and by the end of that decade supported joining the disastrous Exchange Rate Mechanism. In the late 90’s the CBI was begging for us to join the Euro and, now, having lost the battle to keep us in the EU, argues for an extension to the transition for an ‘unspecified period’ on the basis that this will provide more ‘certainty’ to business! Oh dear.
None of this is surprising to me. The people who run the CBI are not what I would call ‘businesspeople’; people who have skin in the game, risking their house to take a loan to start or grow a business. Instead they represent the professional corporate class. Well educated folk, with the right connections, who think they know what’s best for us and are often rewarded with a gong by others who also seem to know what’s best for us. Only they don’t. In the last 15 years the organisation has been led by Sir Richard Lambert who made his career as a financial journalist for the Financial Times. He was followed by John Cridland, a policy adviser to the CBI itself and on various quangos such as the Low Pay Commission and ACAS. Now we have Dame Carolyn Fairbairn, a former management consultant with McKinsey and the Director of Strategy for BBC Worldwide. Brilliant. There is nothing like a Dame. Of course, Dame Carolyn is notable for another reason – last Thursday she made clear the CBI’s new official stance was for a deal but against an extension. First, she championed the uncertainty of extension, now the certainty of no delay. One wonders how certain she is at all…
Contrast the antics of big business and the CBI with those of family businesses. Cumulatively, they represent ninety percent of all businesses in the UK and collectively employ half the workforce. Their turnover represents 35 per cent of the private sector and they contribute over 20 per cent of total government revenues in tax. Aside from the odd exception, like Dyson and Bamford at JCB, you rarely hear from them.
Unlike private equity funded corporates and public companies with outside shareholders, family-run businesses don’t have to impress shareholders with ever increasing returns. They take a much longer sustainable approach to their businesses thinking in terms of a generation or more. In a corporate, your average CEO will remain in post perhaps five to seven years and typically arrange his or her remuneration with bonuses to reflect this short-term stint; politicians also think in terms of what can be achieved in five years. But owners of family businesses have a more mature outlook. They might be ambitious business founders looking to develop and grow a business to pass on to a future generation, or they may be second or third generation owners who also have a desire to protect a legacy. They don’t think in terms of one year’s results but are content to take the rough years with the smooth, provided the long-term trajectory is positive. Consequently, and especially among the more established ones, they tend to build reserves to see them through tougher times. They don’t all live hand-to-mouth, a strategy seemingly encouraged by the Treasury and Bank of England. Perhaps encouraging others to overstretch themselves makes you feel better about your own historic indebtedness?
Family businesses tend to be more entrepreneurial and they identify opportunity in change, such as Brexit, the biggest democratic change of our generation. They also tend to be more philanthropic and supportive of their own communities. For corporations, corporate and social responsibility is often no more than virtue signalling or a box-ticking exercise as part of a marketing campaign.
Family businesses don’t generally set up headquarters in tax havens offshore, reorganizing their profits through complex structures to avoid UK business taxes. They tend to be loyal to the UK recognising the need to pay tax, as long as it’s not overburdensome. And they get on and do this quietly and independently, despite the uneven playing field, while protecting their families. They are the real long-term drivers of the British economy and the proprietors are often so busy trying to make a decent living and focusing on the day-to-day challenges of running their businesses, they don’t have time to waste lobbying Government, who they often think screw things up anyway.
But, as a rule, they don’t often want Government to do stuff for them. They’d rather have Government out of their hair completely. They want the freedom to run their business unburdened by pettifogging regulations coupled with a low tax environment to encourage them to reinvest and to reward them for the risks they have taken.
This time last year, I became an MEP for the Brexit Party before switching back to supporting the Tories, paradoxically joining the realms of European politics on a journey to help Britain remove itself from the EU. A year on I have joined the newly formed and non-partisan Independent Business Network (IBN) which aims to become an alternative voice for businesses in Government and media; one which reflects the vast majority of business people in this country. We will represent those whose voice has not been heard and the general message to Government will be simple: if you really want to help business, steer clear, fix the economic potholes and remove the speedbumps. We’ll drive the economy, so trust us – we mean business.
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