Get closer to government

Businesses would be wise to examine their relationships with Whitehall during the recession

The financial crisis will drive business and politics ever closer together in an era of recession. Since the collapse of Northern Rock we have seen governments becoming involved in the economic structure of the global economy to an unpr­ecedented degree. It is now inevitable that the politics of frugality, born out
of fiscal restraint, will dominate the international political agenda.

Regulatory authorities will be under scrutiny as they manage relations with business and secure outcomes that are in the public interest. At the same time business will have to work more closely with government than at any time since the Second World War.

For more than 20 years, Gavin Anderson (now Kreab Gavin Anderson) has operated in world markets and advised businesses on communications.

Companies will have to learn some harsh lessons quickly if they wish to survive in an era of regulatory growth and fiscal frugality. From major corporations to sizeable SMEs, every business should be closely examining its exc­hanges with government and consid­ering how it can get better value.

Our response to this new era has been formed by a deliberative evaluation of the needs of our clients – whether they are mature corporations or those poised for development in the remaining growth sectors of the global economy, such as renewable energy.

Given the move from credit crunch to recession, it’s vital to draw answers from an assessment of how companies should act in key global markets.

In the UK, we believe that businesses should seek more from representative bodies such as the CBI and the Institute of Directors to ensure they are getting their message across to government and the opposition. With a general election looming, time is of the essence.

In Europe, Britain’s businesses may wish to take a hard look at European monetary convergence and evaluate whether membership of the Eurozone could be right for the UK at this stage in the economic cycle.

They could also call for a review of all rules and regulations and set the European Commission’s officials the task of putting anything that deters entrepreneurship through the biggest shredder in the Charlemagne Building.

Further afield, it is vital for UK businesses that US trade policy does not drift into any form of protectionism. Our entrepreneurs should encourage UK Trade and Investment to ‘kick-start’ transatlantic trade through bilateral meetings with US industry leaders.

Lord Mandelson might also be enc­ouraged to offer Silicon Valley in the US a ‘knowledge barter’ with the UK’s key technology leaders. Joint ventures could result from this approach, with businesses gaining the competitive edge in tough global markets.

In the Middle East, oil producers are feeling the pinch as global demand for energy plummets. UK businesses may wish to review major capital projects in the oil-producing states and discuss with Gulf governments how these might still be delivered with a ‘frugality’ review of costs.

The UK Government could also be asked to establish a ‘fuel for trade’ offset project that would help energy producers to plan production with greater confidence and offer opportunities for manufacturers to sell their products in the Gulf states.

We hope this range of initiatives provides food for thought and sparks further debate on the actions that policy-makers should take to restore growth. It’s an aspiration that all advisers in the public policy arena should share.

Views in brief
What effect would a compulsory register of lobbyists and clients have?
It is still up for debate whether a register would effectively serve the public interest. We should guard against ‘using a sledgehammer to crack a walnut’.

Your yacht is moored off Corfu but Mandelson, Osborne, Rothschild and Deripaska aren’t available. Who is on your fantasy guest list?
Aneurin Bevan (health minister in the post-war Labour government and ‘father of the NHS’), Alan Clark (a controversial figure who spanned the Thatcher and Major governments), John Lennon, Bill Clinton and George Soros – a man who knows a thing or two about the economic cycle.

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