Artwork for FTWeekend Comment - issue dated 09.06.18

The single market is absolutely vital to Lucas,” declared Brian Pearse, chairman of the engineering group. “We have to be very much a global company.” Deeply concerned by the seeming hostility of much of the Conservative government’s attitude towards Europe, Sir Brian cancelled Lucas’s donation to the party.

That was in 1995. Much has changed since then. Lucas industries now trades only as an offshoot of a German company. Since 2000, legislation has demanded that shareholders should approve corporate donations to political parties and such donations are effectively outlawed for quoted companies. But the issue of the UK’s relationship with the EU remains troublesome. On Tuesday it will reach another crisis point as the House of Commons votes on whether to avoid the hardest of Brexits.

Sir Brian feared the government was not listening to the concerns of business 20 years ago, but in recent years the sound barrier seems to have become almost impenetrable. Business has been cast as the political pantomime villain. In July 2016, as she set out her personal manifesto for party leadership, Theresa May attacked “unscrupulous bosses” and “corporate irresponsibility” and was adamant that: “Under my leadership, the Conservative party will put itself completely, absolutely, unequivocally at the service of ordinary working people.” The trade union bosses of old would have applauded the resurrection of such “us and them” language.

It has become commonplace for ministers. Only this week, Michael Gove was roundly condemning “crony capitalists who have rigged the system in their favour and against the rest of us”. The secretary of state for environment, food and rural affairs managed glancing references to the water industry and sustainability in his speech to the Policy Exchange think-tank, but it was largely a tirade against the corporate world.

Few would argue that modern capitalism is without failings. From the financial crisis of 2008 to the collapse of Carillion (according to the National Audit Office, this will cost the taxpayer at least £148m), colossal mistakes have been made. Executive remuneration is widely, and not unjustly, perceived to be unfairly generous. That perception has been the driving force behind the rise of populism on both sides of the Atlantic. It is a big reason why the UK is mired in a potentially disastrous breach from Europe.

Yet, for all its inadequacies, business remains a force for good. Politicians on all sides are now loath to even whisper such a thought. Business leaders, conscious of the zeitgeist, have not been keen to make the defence case publicly for fear of being shot down as stooges for the transgressors. So their efforts towards being responsible corporate citizens go unremarked, except in annual reports. Businesses are still perceived as using charitable giving as a cover for securing tickets for the opera rather than providing training and jobs for ex-offenders or breakfasts for children in deprived areas. Apart from the small matter of wealth creation, business today has extensive involvement in education, fosters volunteering among its staff and generally, in the interests of longer term survival, endeavours to keep its customers happy.

Politicians, however, tend to make a distinction between big business, equating it to crony capitalism, and plucky entrepreneurs who deserve support and encouragement. Knowing this, most big businesses ask little of government beyond a stable environment, an educated and skilled workforce, effective infrastructure and a degree of regulatory and legal certainty. That enables them to get on with creating jobs and generating tax revenue to keep the country going.

Traditionally, they have found the Conservative party the most supportive of these needs, although the Blair administration, with its embrace of free markets, was an exception. What now causes real concern is that the May government also confounds the norm. According to Paul Drechsler, president of the CBI employers group: “There are more anti-business Conservatives in the party than at any time in recent history.” Fortunately, he adds, there have been enough in the cabinet, including the prime minister, “to do just enough to prevent immense damage so far”.

But significant damage has already been inflicted. The long-delayed decision over a third runway for Heathrow means that transport links to foster trade with China, for instance, will be inadequate for many years to come. The difficulty in obtaining visas for skilled workers is a problem for business, just as it is for a National Health Service desperate to recruit doctors.

Above all, though, we face Brexit. It is glaringly apparent that the government triggered Article 50 and the process of EU withdrawal without any inkling of the implications. What was true for Lucas in 1995 is even more the case today, when business has integrated European supply chains and multinational workforces. Without the frictionless trade that membership of the single market and customs union provides, our economy will shrink drastically.

For many months, business leaders tried to get that message across to government but they could barely get over the threshold of Downing Street. Only as they have become more vocal, and the difficulties of engineering a smooth Brexit become apparent, have some ministers begun to pay attention.

Mrs May would not wish to be perceived as making the Conservatives the party of business, but perhaps there is just time for the government to realise that unless business thrives, everyone will suffer.

The writer is a Conservative peer and chairs the FT’s appointments and oversight committee

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