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Nick Clegg: Brexit is proving the Tories are no longer the party of business

October 4, 2016 11:38 AM
By Nick Clegg MP in The Evening Standard
Originally published by High Peak Liberal Democrats

New policy on City passporting rights, business rates and airport expansion will all harm the private sector

If you pay £16,500 you can have an advert on the canvas bags or lanyards issued to delegates. If you want an exhibition stand in a plum spot you'll pay anything up to £27,500. And, according to press reports, you'll need to cough up more than £3,000 to rub shoulders very briefly over lunch with national luminaries such as Liam Fox, Chris Grayling or even Theresa May herself.

Welcome to the great love-in between British business and the Conservative Party, which will be on ample - and expensive - display this week at the party conference in Birmingham.

I do not disapprove of businesses paying to participate in party conference events - indeed, I encouraged it when I was leader of my own party. Nor do I begrudge the Conservatives for raising their price tag to get as much into their party coffers as possible. As long as we're stuck with our opaque party funding rules - the reform of which has been repeatedly blocked by both the Conservative and Labour parties - it's just the way of the world.

No, my big query about the huge financial donations provided by British businesses to the Conservative Party is not based on sanctimony but simply this: why are businesses supporting a party which now poses such a serious threat to the long-term health of the British economy?

May's party is now poised to inflict more damage on the British economy in one Parliament than John McDonnell could manage in a decade.

The evidence accumulates by the day: just this week the Conservatives announced a sweeping increase in business rates for many high-street companies, especially in London, having buried the business rate review initiated by Danny Alexander in the last Government. The Financial Times has reported that the Government is poised to decide in favour of Heathrow expansion but will then, weirdly, refuse to advocate it in Parliament, preferring the lottery of a free vote instead. Since when was building a runway equivalent to matters of conscience such as abortion or war, the subjects normally reserved for free votes? And Government ministers have pretty well confirmed that they've given up seeking to protect the "passporting" rights of the City of London in the EU's Single Market when we quit the EU.

A Government that whacks up London business rates, fudges airport expansion again (Gatwick, incidentally, remains by far the most deliverable option) and kicks the financial sector - which has provided it with most of its donations - in the shins is not, you would have thought, a natural "party of business". And yet the longstanding cultural affinity between the boardroom and the Conservative Party lives on. Politics, I've discovered over the years, is not an especially logical process. People often vote for parties which do not necessarily help their own interests. Many people vote for social reasons - the feeling of being "one of us" is a powerful lure at election time. If you live in a commercial milieu for which voting Conservative is second nature, it's difficult to break the habit of a lifetime.

And yet I have had many conversations with lifelong, mainstream Conservative voters in recent months which suggest to me that things are beginning to change.

Interestingly, the early signs started well before the EU referendum. When George Osborne failed to get his budgets through Parliament - not just once but twice - serious doubts first emerged. In most mature democracies, when a Government can't pass a budget, it falls and elections are held. The fact that Cameron and Osborne managed to mess up so badly on two occasions shook the confidence of serious-minded business people in the City and beyond.

The patently daft economics of the Conservative Party manifesto last year didn't help either. There isn't a serious economist in the land who believes that there should be a blanket prohibition against the Government borrowing to fund housing and infrastructure projects, even though there is a strong case to be more wary of borrowing to fund day-to-day spending. Osborne relished his hardline "no borrowing for anything" stance in the general election - even as Government borrowing went up - as a contrast to both the Labour and Lib-Dem plans. It may have worked as a campaign tactic but it was rotten economics - and serious business people who know the value of quality transport, energy and telecoms infrastructure saw right through it.

So the Brexit referendum - triggered not because of an overwhelming public clamour but because of the Conservative Party's all-consuming obsession about Europe - is only the latest, if most significant, instalment in an increasingly business-unfriendly approach from the Conservatives. It is a sign of how much things have changed that Philip Hammond, who in Coalition was often the first to chip in during Cabinet discussions with some glib anti-European remark, is now regarded as a lone voice of sanity against "hard" Brexiteers such as Liam Fox and David Davis.

Business people look on aghast as Brexit hardliners in the Government gain the upper hand - as confirmed in Theresa May's announcement yesterday that she will end Britain's continued membership of the EU's Single Market altogether (we can't be part of a market the rules of which we will refuse to abide by).

Of the many Brexit voters I spoke to during the referendum campaign not one of them said they were voting Leave because they wanted to cut the City of London off from the continent and impose a raft of new border checks on all British exporters trading with the EU. Yet that is exactly the fate that now awaits us.

The Conservatives are now the party of 19th-century parliamentary nostalgia - not the party of 21st-century business.