Keeping business out of politics

“We should keep business out of politics” Professor John Kay from the London School of Economics told a High Pay Centre event on 19 November . “We can’t ask business leaders to determine what is good for the public.”  Professor Kay was speaking at the launch of a collection of essays the High Pay Centre has published on corporate power entitled “Whoever you vote for, big business gets in.”  Professor Kay pointed out that the opinions reflected in the corporate lobby are generally those of the business leaders, not the workforce as a whole.

In recent years, the views of big business have had huge sway at Westminster – often driving the political agenda on to territory that is at odds with the views of the voting public.  There are numerous policy issues from taxation to relations with the EU to immigration to cutting the gap between rich and poor where business has an agenda that is different from public opinion.

At the High Pay Centre, we focus on excessive executive pay and the enormous gap that has opened up with the rest of the workforce.  Our polling suggests that an overwhelming majority of people support proposals to cap bosses’ pay at a fixed multiple of their lowest-paid worker. However, whenever we press policymakers on this issue, they defer to the business lobby.

Some of our recommendations for tackling top pay came into law last year, but they were mostly watered down by corporate opposition.

Our experience with policies over top remuneration prompted us to look at corporate power in more detail and the impact this has on democracy.  In our collection of essays, Richard Murphy from Tax Research UK, presents evidence to show that tax policy is driven largely by corporate interests. For example, on the board of HM Revenue & Customs, the UK’s tax authority, there are five non-executive directors all of whom come from a corporate or financial background, with no other interest group represented.  “The result is that … a key element of democracy has been captured for the benefit of a limited but very powerful group in society.”  Mr Murphy believes democracy is threatened by financial interests driving the tax system. “This is why, for example, the UK’s budget deficit is being closed by cutting spending and not raising tax.”

Tamasin Cave from Spinwatch, highlights the investment made by businesses in lobbying parliament. “Lobbyists regularly shape public debates through the media, feeding it information they want politicians to see and keeping out inconvenient facts they would rather they didn’t.”

Trust in business and politicians among the public is at record lows. One of the reasons for this is that the public has lost faith in MPs to protect us from rapacious corporations.  In a poll conducted for the High Pay Centre in April, 74% of respondents – from all political persuasions – agreed that big business has too much power over government.

The power of big business needs to be tackled if we are to restore people’s faith in our politics and economy.

Download the essays    Watch the High Pay Centre video http://youtu.be/4ER9qYEoZDE

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