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The choice of Chancellor is the key in 2010 election

08 December 2009

For business confidence to return, the country needs confident political leadership that understands the difference between creating the right framework for success, rather than simply pandering to popular opinion. Mark Fox assesses the state of play as an election year approaches

Gordon Brown is obsessed with drawing clear lines between the Government and the Conservative Party, instead of smothering his opponents as Tony Blair was so successful at doing. Brown prefers to highlight the differences. So far this technique has not been notably successful.
But as this General Election year moves on business and the wider electorate will start to really focus on what a next Labour or Conservative government will look like and what they will actually have to do. Drawing sharp lines of distinction will either prove to be a masterful tactic or a catastrophic error of judgement – only time will tell.
To succeed and compete British business needs economic and political stability. Currently it has neither. The BSA is dedicated to promoting and explaining the UK outsourcing and business service industry. Politicians of all parties agree the industry will have an ever increasing role in delivering services across the private and public sectors.
There is huge opportunity for the industry but also risk as well. It will be subject to ever increasing media and political attention – and it needs to be prepared to handle that in as open and a transparent way as possible. The industry has a good record of delivering services across all sectors and should be energetically on the front foot promoting itself and what it does.
Business is an easy target for political pot-shots. In a General Election season with so much up for grabs it is irresistible for politicians to follow what they think is the public mood. And in the public arena where politicians are seasoned professionals they will nearly always get the better of business leaders – whatever the merits of their case might be.
Two recent examples spring to mind. Caused by public policy and regulatory failures the blame for the banking crisis has somehow been successfully landed on greedy bankers and their excessive bonuses. Of course, bankers have responsibility here, but it is the politicians who created the policy and regulatory environment that allowed this crisis to happen.
Before the banks it was the private equity industry that was held up for a public thrashing by politicians apparently enraged at the way they do their business and the amounts of tax they pay. But it was those same politicians that actively encouraged the industry by creating the tax and regulatory environment in which it could grow so rapidly.
Other industries have suffered in the past and others will suffer in the future. A disturbing trend has emerged in recent times where senior politicians from across the political spectrum seem to judge it more expedient to ride the wave of popular fury rather than do the hard work or developing new policy.
But politicians who hold, or expect to hold, office need to be very careful about attacking industries and businesses just because they think it is popular. It is all too easy to drive businesses out of the country or offshore. We need to avoid a culture of complacency and arrogance creeping in to the way politicians regard British business.
To help tackle the twin crises of huge public debt and rising unemployment Britain needs confident small, medium and large businesses – competing successfully at home and around the world. For business confidence to return British business desperately needs confident political leadership.Leadership that understands the difference between creating the right framework for success, as opposed to simply pandering to popular opinion.
Business will certainly breathe a sigh of relief once the party politicking is over the result of the election known. For all the talk of hung Parliaments they are rare in British politics. Even minority governments can govern for a period in a reasonably robust way if forced to do so. A coalition seems unlikely whoever forms the largest minority party.
Between now and then though are crucial months for business of all sizes. Confidence is fragile and the recovery by no means assured. Business knows that the character of the person in Number 11 Downing Street will be especially important in the coming months. Alistair Darling has proved to be a tougher and more politically adept politician than many thought when he first arrived in the Treasury. George Osborne is political to his finger tips and is fleet of foot around the ring.  What both men have to show is that they have the courage and political clout inside and outside their own parties to drive through all the tough measures that will need to be taken.
In the next month or two there will be a final Budget before the Election is called.
Whether it is credible or not will shape the debate of the campaign. The run up to that process and the response to it will give the Chancellor and his Shadow the chance to win or lose the Election for their party. The leaders may be the stars of the show but the principal Treasury spokesmen are the ones that carry the real burden of victory or defeat.
● Mark Fox is Chief Executive of the Business Services Association

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