Perspectives

Stop bashing business

Mark Wilson asks when did beating up business become the national sport?

Published in the Daily Mail, 9 July 2017

We stand at a moment of huge national significance. Our economy is fragile. We are beset by inequalities dividing young from old, North from South, rich from poor. We need major investment in housing and transport infrastructure. And then, of course, there is Brexit, a process which will determine all our futures for generations to come.

 So where, then, is the recognition of the role business, whether that be a small business or multinational company? All too often, the answer is nowhere to be heard - not from the government, and not from the opposition.

Yet without the essential oil of commerce, our national engine will shudder to a halt. Without government backing for our trade and industry, Britain will falter.

Which leads me to ask this: when did beating up business become the national sport in this country? When did we begin to revel in the grievous self-harm inflicted by our apparent disdain for enterprise and commerce?

Business should be up front and centre yet it is not even in the squad let alone on the playing field. And already the results of this omission are worryingly clear..

It should be obvious to everyone that this is a time in which we need strong leadership and brave policy-making to instil consumer confidence and to back British companies. Instead, as we plot our way through these difficult times, the mood is of palpable uncertainty.

That’s why the lack of that support from both government and opposition is so utterly baffling. I’ve worked all around the world and, in most countries, business success is celebrated.  Good companies are rightly seen as champions of the national interest.

Of course it’s true that businesses and business people have made mistakes – on occasion with serious consequences to individuals, and even to the nation as a whole. There is understandable anger when business gets it wrong. Do we need to continue working to earn the trust of our customers? Yes. Do we also have a vital role employing people, supporting the economy and binding people together? Without a doubt.

Yet here in the UK, we love to bash commerce. For some time now, virtually all political rhetoric about business has been negative or during the recent election campaign, entirely missing. In some quarters ‘big business’ is a pejorative term.

Since the referendum a year ago, the Government has become curiously detached from business. I can only assume it’s because the pollsters have decided that there are no votes in supporting our companies or working alongside them. 

Here is just one frustrating example: for years companies like mine have wanted to invest in our national infrastructure - transport, energy and so on. For years, government has said it would like to help.   The positive intent is there but the results are not.

And it’s not just big business that feels left out in the cold. Many of Aviva’s 15 million UK customers are small businesses, sole traders and others trying to create jobs and prosperity. I hear regularly about the difficulties presented to them by, among other issues, recruiting the best people, which ever country they’re from, getting access to funding, and ever-abundant red tape.

Whether the shopkeeper in Norwich, the small business owner in York or the tech entrepreneur in Hoxton, they want government to understand the impact on business of the big decisions they’re making, whether on Brexit, trade or regulation. Yet too often they feel our leaders at best are unsympathetic. 

Surely, you might think, the dangerous waters of Brexit would concentrate political minds. The uncertainty is like kryptonite to investment.

Research by Aviva, the company I run, shows that families’ monthly income has now dropped to its lowest level in two and a half years. At the same time, household debt is up by a third to a record high and household savings are at a 50-year low.

In the short term, at least, the UK faces difficult economic challenges that need to be addressed urgently.

Full disclosure: I’m a New Zealander. But as a Kiwi who loves living in the UK I want this country to thrive. I voted Remain but I’m not a ‘remoaner’. It is no longer about whether we leave the EU but about how we leave it.

So here is my three point plan for a better post-Brexit Britain. First, we need to focus less on what we don’t want. The danger with the current Brexit approach is that both sides’ obsession with ‘red lines’ makes much needed flexibility and compromise so much harder to attain. Dogmatic negotiating positions, before the real discussions have commenced, simply don’t make sense. For example, both sides would benefit from sensible market access for services as well as goods. Services account for nearly half of everything Britain sells to the EU. It makes no sense to cut off our nose to spite our face by not seeking to preserve this access.

 Second, we need our leaders to be bold and promote confidence, just as President Macron has in France. Such national self-confidence is crucial for the trade deals we must strike with other countries in parallel to the Brexit negotiations. It may be tough for our Government’s trade negotiators but we simply can’t afford to wait until we leave the EU to start free trade talks with other markets. Only, last week the EU announced that it had formally agreed an outline free trade deal with Japan, the world’s third largest economy.

We’re being left behind. We have to get to work now and urgently explore trade deals with the US and other willing partners to secure new opportunities to sell British products and services. Consider China. The government was far-sighted enough to support a Chinese-backed development bank against the wishes of the US. I have lost count of the number of times senior Chinese officials have approvingly mentioned this to me. It stands us in good stead with that country. Let’s start a dialogue.

The Government should also prioritise trade missions that open doors for our small and medium sized businesses to expand by selling more overseas.

Third, we need a new deal for greater infrastructure investment, whether that’s mega-projects like extra airport capacity or further investment in the country’s social fabric such as schools and hospitals. Such investment will support the near term health of the UK economy and provide long-term strategic benefit. UK life insurers and pension funds have been investing in the real economy for centuries but at the moment a series of policy and regulatory own goals are stopping UK PLC kick starting a new era of major investment.

I know from my own experience that major social problems can be addressed when business and Government work together. Aviva, a 321-year-old British insurance company which last year paid out £34 billion in benefits and claims to customers, has worked with Government to put the brakes on the whiplash and fraud epidemic which costs motorists more and more every year. Last month’s Queen’s Speech includes proposals to bring this fraudulent activity to an end, which will save motorists £40 annually. It’s a good example of what can be achieved when business and Government cooperate.

In recent days, at long last, we’ve heard encouraging noises of a fresh Government approach - an apparent willingness to listen more and to try to understand business better.

That’s the only way Britain will make Brexit work and see economic growth and rising living standards in the tricky years ahead.

Perhaps we’ll stop beating up business for sport. We’d do well to embrace the lessons of a different sport. I am, as you might expect of a Kiwi, a rugby fan. Yesterday, the All Blacks and British Lions showed what exceptional performances can be achieved with national pride, passion, teamwork and a plan. I hope the Government was watching.

Mark Wilson, Aviva Group CEO