Big business has no business poking into EU debate
As some large businesses will doubtless still wish to tell the UK whether to stay in the EU or not, we do need to examine the bad record of these large companies who have spoken out in the past on these big issues. If many had had their way we'd now be in the euro!
I awoke this morning to a garbled version of my views on the BBC on why big business should stay out of referendum debates. They did not phone me to check my views, nor invite me on to explain them. Readers will remember my advice to big business to keep out of the Scottish referendum campaign, where I was on the same side as most of the businesses. Let me have another go at explaining it.
I have been the chairman of a large quoted industrial company. When in that post I never once associated the business with my own political views. I knew that I had shareholders, customers and employees who did not agree with my political stance on various issues.
My job as Chairman was to represent the company and the best interests of its stakeholders, not to pursue my own or my party’s political agenda through the company.
One issue came up which was going to have a substantial impact on the business – joining the Exchange Rate Mechanism. Even though I was sure such a policy would slash jobs, profits and output for the economy as a whole, I still didn't feel it would be wise to associate the company’s name with my judgement on that issue.
Some other companies and business organisations, including the CBI, campaigned for membership of the Exchange Rate Mechanism, only to discover how much damage it did when their wishes were granted. I set out my own views on the ERM and watched in disbelief as big business as a whole got it comprehensively wrong.
I am told that in Scotland it is difficult calming things down after the intense and heated debates of the Scottish referendum. Those companies that did take a very public stance now have to deal with shareholders, employees and customers who are unhappy that their company spoke against their political wishes.
If the CEO has just a small proportion of the shares, how can he or she speak for all the shareholders when pushing a partisan view on a very emotive issue? What does he say to those in the company or who part own the company who disagree with him?
Most senior business people know that expressing a corporate political view can be damaging to the company’s interests. We do not usually see large multinationals telling shareholders and employees how to vote in General Elections.
We do not have lists of big companies declaring for Labour or Conservative. They do not do so for the reasons I have set out above. We therefore need to ask them why they think a referendum about people’s very identity and about who should govern them is cause for breaking this simple unwritten rule of chairing or leading a great company.
As some large businesses will doubtless still wish to tell the UK whether to stay in the EU or not, we do need to examine the bad record of these large companies who have spoken out in the past on these big issues.
They spoke for the Exchange Rate Mechanism. That dreadful scheme led to a recession which destroyed people’s jobs and company trading success in the UK. These same political companies then decided to recommend that we surrender the pound and join the Euro. They had clearly learned nothing from the ERM experience.
I have not heard them apologising for the damage their advice on the Exchange Rate Mechanism did. I have not heard most of them confess they got the Euro wrong.
We were told that the City of London would be badly damaged if we did not join. Instead, it flourished. We were told some industrial companies would pull out and go to a Euro area country. I do not recall any major investor in the UK doing that.
So please, big business, recognise you have not been good at judging the best interests of the UK. More importantly, it is your job to keep all your shareholders, employees and customers happy. Why not try doing that by keeping out of the next referendum?
Mr. Redwood's writing is re-posted here by his kind permission. This and other articles are available at johnredwoodsdiary.com
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