Anthony Hilton: Media trivia masks business problems

Over the past few years a sustained campaign by the CBI has put red tape and the prospect of tax increases at the centre of attention – so much so that Gordon Brown sought in his speech at a CBI dinner last Monday to establish his deregulation credentials (albeit by threatening to spike another department’s pet project rather than one of his own).

Two cheers then for the CBI for success gained through sustained lobbying. But not a third cheer, because it is probably the wrong battleground.  As David Willetts MP said a few months ago, there is far more to economic reform than cutting taxes and red tape – a display of  common sense that sadly ruled him out as a credible Tory leadership candidate. The fact is that most CBI members are big enough to take regulation in their stride:  it is small firms that suffer, and they tend not to be CBI members. More to the point, however, and to echo FT columnist Sir Sam Brittan, the economic prosperity of this country is far more bound up in maintaining and extending free trade rules,  encouraging the immigration of skilled workers,  and becoming more energy efficient.

These issues are far more important than getting a penny or two off the basic rate of income tax, or persuading Surrey County Council that it really shouldn't produce more rules than Brussels does. But the Chancellor knows no one is going to put him through the wringer on the aforementioned, more vital topics. PR and the media have created a world in which it is so much easier to focus on the trivial.  Peter Montagnon of the Association of British Insurers recently said
there had been far fewer rows about executive pay this year because companies were consulting their shareholders more.
Indeed, they talked more about pay than any other issue.

This is another symptom of the same disease.  There is huge media attention paid to executive pay,  something that matters much less than company strategy, research and development, innovation, threats, succession, and ability to plan for and cope with change.

These are things companies are much less willing to talk about, and the misplaced PR and media obsession with pay means they are not made to.

anthony.hilton@haynet.com

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