This week the Independent Business Network (the IBN) has published a meaty report defending businesses from the damaging distraction of ESG and “woke” Corporate Governance.
The drive to force businesses to focus on everything other than generating profits is becoming a menace.
It’s everything from avoiding upsetting people’s feelings, driving nonsensical Net Zero policies to suppressing free speech and free thought – these latter being the very things of human progress.
These forces are often driven by well-meaning people but, as the report shows, are very much enmeshed in Marxist theory, underpinned by the ever more powerful HR tyranny and enforced through measures which have no democratic scrutiny. They are the enemy of wealth creation and economic growth.
It is impossible to over-emphasise the importance of wealth creation and economic growth, there is almost no point in discussing any other policy until these matters are dealt with. They both depend on profit and in turn on the right sort of investment and innovation.
As the Labour Party conference gets underway, we are likely to see another avalanche of anti-growth “woke” policy proposals, bearing down upon already crushed family businesses of all sizes and particularly SME’s.
Family businesses represent at least 85 percent of enterprises and employ the majority of private sector workers. They also generate more than 65 percent of GDP. If they are to generate the wealth and growth upon which both Messrs Starmer and Reeves have declared everything else depends, business requires the same degree of freedom as the protection afforded to the woke and the green.
Of course, it is not just Labour that have lost the plot. The left-liberal mulch in the middle of politics, including in the Conservative Party, are in the thrall of the Green God and its woke handmaiden, a doubly dangerous agenda. Dangerous because anyone who travels the world outside of Europe as I do, on business or otherwise, can see that Britain is being left behind and has been for some time. Eventually, if the current policies are pursued, we will become a living museum, an economic backwater visited by curious tourists. All the things we take for granted, like healthcare, law and order and defence security will be a busted flush.
Britain, even in 1950, produced 25 percent of all the manufactured goods traded in the entire world and our GDP per capita as a measure of wealth was considerably higher than the vast majority of countries.
Since then we have steadily exported not the goods, but the means of manufacture, the jobs and the morals that go with them. Successive governments and lobby groups have contracted out workers’ rights, free speech and pollution so that they can feel justified and virtuous. As a consequence, dictatorships not democracies are now strong, increasingly wealthy and powerful.
Profit-making is vital and is the basis of the most successful system of delivery in
human history: capitalism. It is only capitalism that generated freedom for the vast majority of those who embraced it. Freedom from the autocratic rule of demagogues who presided over most of humanity throughout human history and who still hold sway in many parts of the world.
Capitalism also leads to the most efficient use of capital. Profit deriving from it provides the incentive for those with sufficient talent and prepared to work hard, to defer gratification, take risks and invest. It is this profit-driven endeavour that created human progress and economic growth and prosperity like never before.
Only with capital and profit can society develop the wealth necessary to improve those things which we all desire: healthcare, education, transport, defence and homes, for example. It follows that anything that detracts from the pursuit of profit – the main purpose of business – diminishes the creation of wealth, innovation and the development of humankind.
Lawmakers and lobby groups that seek to distract business owners from profit-making and to burden them with other costs need to think carefully of the consequences in relation to innovation, development and access to investment. In recent times businesses have been overwhelmed with distractions: not only the enormous burden of regulation but also quasi-regulatory distractions deriving from international treaties, taxation, financial and non-financial rules and governance standards.
The IBN has previously addressed regulatory burdens. It is these latter non-regulatory but equally burdensome matters that the IBN’s newly published report focuses upon. Arguably these are even more pernicious than regulation. At least regulation is subject to some democratic scrutiny, whereas the body of naysayers considered in the report are generally special interest groups, driven or derived from a technocratic civil service or “quangocracy” all too often operating to promote vested interests. Many other business groups turn a blind eye to this all-pervading and pernicious regime because of their dependence on government and “access”. Not so the IBN, the real voice of what business thinks.
There are many examples. Workers’ rights sound like an automatic good but can reduce flexibility to the detriment of profit and the workers themselves. Many of the “woke” policies around hurt feelings, working hours and place of work can be used as a weapon against legitimate business owners. Workers are not informally saints and while it is said that nobody comes to work to do a bad job, they do come to promote self-interest or not turn up at all.
The Green agenda is destroying prosperity and industry by creating high energy prices which do not “save the planet” given that the UK represents two percent of global emissions and we have exported pollution. There are many vested interests benefiting financially from this, benefiting from taxpayer subsidies and from price gouging against consumers.
In any event, should any of these burdens on business be thought necessary they should be pursued via legislation open to democratic scrutiny not via the shadowy world of interest groups.
Time is running out. Britain under Labour is on the verge of a vicious cycle of decline made much worse by the obstacles to business start up and growth. We need an opposition to this fashionable agenda and to return to the true purpose of business, to make profit and only that.
John Longworth is an entrepreneur and businessman, chairman of the Independent Network and a former MEP.