The civil service needs an actual industry bigwig, not a mid-rank mandarin, if it wants to properly engage with business, writes Matthew Elliott
On my morning scroll through Linkedin, I spotted an interesting job vacancy – Business Engagement Lead for the Chancellor of the Exchequer. To be based either in Darlington or London, the job commands a salary of between £55,760 and £65,000 and, at the time of writing, has had 56 applicants. Whilst undoubtedly a respectable salary, it would be a stretch to think that it could attract a bigwig from the world of industry or finance, with the expertise and contacts they’d bring to the role.
It might seem ironic that I, as the founder of the Taxpayers’ Alliance, am making a point about civil service salaries being too low, but it seems sensible that we should strive to recruit someone more experienced than a mid-ranking official when it comes to a matter as important as spearheading the relationship between the government minister in charge of our economy and the business community.
Labour has swapped the voice of business for the voice of the civil service
The Labour Party was extremely successful at wooing the business community before the last election, with Rachel Reeves’ smoked salmon and scrambled eggs breakfasts winning a string of senior endorsements and commencing a battle amongst lobbyists to secure access to future-ministers. Indeed, at the 2023 Labour Conference, Keir Starmer told business leaders, “if we do come into government, you will be coming into government with us.”
However, since the election, the relationship between Labour and business leaders has come under strain, to put it mildly. Part of this is the consequence of decisions like the increase to Employer NICs and anxieties about aspects of the Employment Rights Bill, but it’s worth also examining the structural relationship between government and Business, and the impact that this has on policy.
In opposition, Labour was reliant on engagement with industry to help develop policy. In government, the expertise of business has been replaced by the machine of the Civil Service, where investment in business relations has long been lacking.
It is telling that whilst the Foreign Office has roughly 122 members of staff in the British High Commission in Pretoria, South Africa, it is unclear whether the UK still has a single tech envoy to North America – a position created under the last government. With Google’s market cap alone being about five times the size of South Africa’s economy, it seems bizarre that our country’s external affairs personnel are being appointed to fit the needs of the UK in the 19th century rather than the 21st century.
It doesn’t have to be this way…
Competitor countries have stolen a march on the UK in this regard, where engaging with businesses and selling your country as an attractive investment location is considered a key part of the job of being a senior minister. Until recently, international investors frequently complained about not even receiving responses to enquiries to British ministers, and compared the UK unfavourably to countries like France, where ministers roll out the carpet to those looking to invest and create jobs.
A recent Centre for Policy Studies report gave the example of when Unilever was deciding whether to base their global HQ in the Netherlands or the UK, with Mark Rutte in near-daily contact with Unilever executives, compared to just one call from then-Prime Minister, Theresa May.
Things have improved in recent years. Franck Petitgas, now Lord Petitgas, did a fantastic job of channelling the voice of business into the heart of Downing Street under Rishi Sunak, and his successor, Varun Chandra, is also highly capable. But we must find a way to hard-wire the insight, expertise and needs of the business community into decision making across government, so that it is not dependent on the efforts of any one individual.
Morgan McSweeney and Pat McFadden have made much about their drive to reform the civil service, to improve performance and value for money. The Labour Growth Group has noted the need to bring more external talent into the civil service. And Iain Anderson, now a NED at the Department for Business and Trade, drafted an excellent plan for how we can improve the representation of business in government. The ground is fertile.
Whilst it may seem initially counterintuitive, and cost slightly more in the short run, investing in the senior officials who engage with businesses would have untold rewards in terms of making sure that the policy environment for businesses is shaped around the measures that would allow them to get on and thrive, and in turn, generate more jobs for people to fill and more revenue for the Exchequer.
When businesses thrive, society at large can thrive too. It’s time that we back businesses by making sure that their voice can be heard loud and clear in government.
Matthew Elliott is President of the Jobs Foundation and a member of the House of Lords