View from the Street: Britain cannot afford politicians who duck every hard decision

One occasionally hears politicians say that ‘money does not grow on trees’.

Then, much of what they then say and do suggests that they do think that money grows on trees. Or perhaps that it is harvested from the soil or falls from the sky?

In recent weeks, I have watched hours of parliamentary committees in Westminster and Holyrood, in which business people have been challenged on what politicians believe to be controversial decisions made by the leaders of private companies.

The general theme of the questioning, and the parliamentarians’ barely disguised annoyance, is that difficult questions of financial viability should really be avoided, presumably in much the same way as many politicians now avoid every difficult decision.

Never mind that consumer habits are changing fundamentally and forever, that AI is devouring jobs before our very eyes, or – to simplify matters – that the money going out of many businesses is more than they are bringing in. To some of our elected representatives, these are seemingly modest irritations to be ignored.

Dividends to shareholders are derided, as if those who have invested in companies – in many cases employees and pensioners – are simply donating that money and not that they might see that investment grow in value to ease the cost of living or fund a long retirement.

Our former chairman, the late Sir Angus Grossart, never tired of telling me that ‘capital deserves a wage’.

What he meant was that money invested in a company performs an important function, in much the same way as any executive or employee does. Therefore, he contended, it deserves to be paid a wage. Is that wrong, and if it is, where else might a business find the money it needs to employ people, pay them and the ever-increasing bills, and grow their businesses to do more of that and contribute greater sums to society through taxation?

There is, I fear – and this is hardly an earth-shattering statement – a sizeable gulf opening between the institutions of politics and business, and that should concern us all.

The two should be working hand in glove, each with an intimate understanding of the respective challenges of the other, to establish the policy and regulatory environment that facilitates a growing economy, fuelled in large part by the profits of companies large and small.

That in turn provides more tax revenue to the state, allowing politicians to decide how and where that money is invested and the resulting wealth redistributed.

One of the least-appealing hallmarks of some politicians today is the apparent lack of any courage to make hard, long-term decisions, particularly to reduce the national outgoings and debt and have us live within our means.

Where there is the slightest hint of dissent or criticism, those with their hands on the levers of power take fright and retreat.

The comfort zone of too many modern-day politicians is to talk only about spending money, but rarely do they discuss the obviously too-thorny issue of how it is raised in the first place.

Any business doing the same would fail quickly, and just because politicians are increasingly unable or unwilling to control or reduce spending (the UK’s cost of borrowing is a useful proxy for the lack of confidence in our politicians), should businesses somehow be forced to take the same short-sighted and irresponsible approach?

This situation is completely unsustainable, and it can’t be left solely to the politicians to change things.

Business and businesses must engage more intensively and assertively with politics and policymaking. It might at times feel like there’s little point and that politicians exist in some distant bubble, but we’re all in trouble if there is no fundamental reset of the relationship between the public and private sectors.

As private businesses, we should of course be accountable to politicians from time to time and confidently articulate the rationale for the decisions we take, but so too should politicians be accountable for the things they say and do and the intelligence or otherwise of the questions they ask.

We’re voters too, as are our employees and customers, and we have every right to demand better understanding of business and economics, meaningful and respectful dialogue and partnerships and, above all, the courage from our leaders to take brave, far-sighted decisions.

On the eve of what promises to be a difficult UK Budget, it would be a good start for us all to accept a simple truth: money does not grow on trees.