Are bullying MPs actually harming British business?
IT HAS become a national pastime. Once, before the financial crisis, select committee hearings were excellent cures for insomnia. Today, though, they have turned into Punch and Judy shows.
roll up, roll up, to watch the bankers being bashed! See executives squirm over their tiny tax payments! Enjoy the discomfort of the rich and powerful as they are quizzed about their wealth!
Few taxpayers, small shareholders or customers will shed a tear when they see a bank boss, or the leader of a tax-minimising US giant, being pilloried in public. But some MPs have indulged in ‘bullying’ and ‘grandstanding’ that could end up harming the economy, according to Simon Walker, the head of the Institute of Directors.
Most of the executives summoned for a grilling are used to being treated with exaggerated respect – not to being hectored, mocked and forced to justify themselves.
However, with the relationship between business and politicians at a sensitive point ahead of the Budget and the Brexit vote, some argue that the theatrics in select committee hearings are causing genuine damage. The maulings come at a time when business feels deeply aggrieved at the Conservative Government.
The hope was that, uncoupled from the Lib Dems, the Tory administration would be resoundingly pro-enterprise. Many firms feel they have been used instead as milch cows for costly and misguided policies.
The CBI this week said that business will end up paying £29bn over the course of this Parliament due to the National Living Wage and the Apprenticeship Levy, pension changes and inaction on business rates.
It is in this climate of mutual distrust that Walker has spoken out about what he sees as the intimidatory methods of certain MPs.
Walker suggested the interrogations of HSBC chief executive Stuart Gulliver and chairman Douglas Flint by the Treasury Select Committee may have played a part in the bank’s threat to move its headquarters out of London. The lender decided last Sunday to stay in the UK following a year-long review.
‘It is great HSBC is staying,’ Walker said. ‘But it did no credit to our par- liamentary system that the chief executive and chairman were publicly ripped apart on live TV by the select committee.’
When quizzed about his personal finances, Gulliver told the committee he placed £5m into a Swiss bank account through a Panamanian company because he wanted to conceal his earnings from colleagues.
Walker said the committees are in general a good thing because they can hold the executive in check. ‘But it is a question of balance. They can be spoilt by the bullying and selfaggrandisement of some MPs. I had better not name names.’
The IoD chief also singled out the treatment of Matt Brittin, Google’s European boss, at the hands of the Public Accounts Committee, which is chaired by Labour MP Margaret Hodge. Brittin was asked five times how much he earned before admitting that he did not have a figure.
Business leaders concede that the Treasury committee played a valuable role in the banking crisis. Similarly, the Business, Innovation and Skills committee called the Government to account over the steel industry by castigating Whitehall for not having effective warning systems in place and for failing to push for EU action to help the sector.
But Dr Adam Marshall, executive director of policy at the British Chambers of Commerce, says the showboating can overshadow the valuable role committees play. He adds: ‘It’s important to separate the political theatre from the hard-hitting work.’
Mark Swift of EEF, the manufacturers’ organisation, says: ‘On the positive side, select committees can find a way to dig into issues in depth and put ministers, regulators and executives on the spot.
‘But their effectiveness depends on the members and personality of the chairman.’
AGGRESSIVE select committees are just one element in an increasingly fraught relationship between business and the Government. Brexit is another: the big lobby groups are all keen for the UK to remain in the EU.
‘Business ought to say how it feels on Brexit but can’t tell people how to vote,’ says Walker. ‘It is counterproductive. People in the UK don’t like being told what to do.’
There is also deep discontent about the burdens on business. The CBI praises the Government for pushing down corporation tax rates and for its drive to reduce the deficit, but argues it must stop piling on costs such as the controversial National Living Wage.
Other lobby groups agree. ‘If it was Labour introducing these measures we would have been critical. It is a shock coming from the Tories. It feels like they are taking business for granted,’ said one.
‘We are one of the chorus of voices talking about a build-up of measures,’ says Adam Marshall.
‘Conversations ahead of the Budget need to result in no more business taxes, no more rises in the cost of employing people.
‘It is one thing to state one is pro-business, it is another thing to demonstrate that.’
Confrontations with Govern- ment are not the only problem facing the lobby groups, most of which started life at a time when British business was much more oriented to large industrial companies, and when executives were treated with deference.
The challenge, as Simon Walker admits, is how to appeal to a new breed of entrepreneur, who is quite likely to be young, in the tech industry, and even female.
The grandeur of the iod’s headquarters in Central London’s Pall Mall, designed by 19th century architect John Nash, are a world away from the trendy tech hubs of Shoreditch in the East End.
‘How do we appeal to tech entrepreneurs, that is the question,’ says Walker.
‘We can’t be a crusty old geezers’ club where people fade and crumple into the armchairs.’