Business as an influence on government - Business Environment

Both individually and collectively, business organisations in a market economy are an important influence on government decision making; they are an essential partof what has been termed the ‘negotiated environment’ in which individuals and groups bargain with one another and with governments over the form of regulation of the environment that a government may be seeking to impose.

At an individual level, it tends to be large companies and in particular multinational corporations that are in the strongest position to influence government thinking, by dint of their economic and political power, and many of them have direct contacts with government ministers and officials for a variety of reasons (e.g. large defence contractors supply equipment to the Ministry of Defence). In addition, many large businesses use professional lobbyists, or create their own specialist units, whose role is to liaise directly with government agencies and to represent the interest of the organisation at national and/or supranational level (e.g. in Brussels), using the kind of techniques described in Chapter. While such activities do not ensure that governments will abandon or amend their proposals or will pursue policies favourable to a particular company’s position, they normally guarantee that the views of the organisation are considered alongside those of the other vested interests. Added weight tends to be given to these views when they are supported by all the leading firms in an industry (e.g. the tobacco lobby’s fight against a complete ban on tobacco advertising).

The voice of business is also heard in political circles through various voluntary representative organisations such as Chambers of Commerce, employers’ associations, trade associations and the Confederation of British Industry (CBI). Chambers of Commerce, for example, largely represent the views and interests of small businesses at local level, but also have a national organisation that lobbies in Whitehall and Brussels. In contrast, trade associations which are sometimes combined with employers’ associations are usually organised on an industry basis (e.g. the Society of Motor Manufacturers and Traders) and handle consultations with appropriate government agencies, as well as providing information and advice to members about legislation and administration pertinent to the industry concerned.

The Confederation of British Industry (CBI)
The largest employers’ association overall, representing thousands of companies employing millions of workers, is the CBI, whose members are drawn from businesses of all types and sizes and from all sectors, but especially manufacturing.Through its director-general and councils and supported by a network of regional offices and a permanent staff which has representation in Brussels the organization promotes the interests of the business community in discussions with governments and with national and international organisations, as well as seeking to shape public opinion. Part of its influence stems from its regular contacts with politicians, the media and leading academics and from the encouragement it gives to businesses to take a proactive approach to government legislation and policy.Additionally, through its authoritative publications including the Industrial Trends Surveys and reports the CBI has become an important part of the debate on government economic policy generally, as well as a central influence on legislation affecting the interests of its members.

A good example of its more proactive approach in recent years was its attempt to shape government thinking on environmental policy in the 1990s and to harmonize the work of both government and businesses in this area by promoting its own ‘Action Plan’. To this end the CBI established a group of staff dedicated especially to work on environmental issues of interest to business and set up a policy unit and a management unit to provide information, contacts and advice to the various parties involved. The policy unit’s role was to monitor developments in legislation, liaise with government departments and enforcement agencies (e.g. the former NationalRivers Authority), lobby government and other organisations, provide information and advice, and help to formulate CBI policy on vital environmental issues. The management unit produced promotional literature for businesses, organised conferences and seminars on specific topics, conducted surveys and provided advice on financial and other assistance available to its members to help them develop good environmental management practices within their organisation.

In a report published in late 1998, entitled ‘Worth the Risk Improving Environmental Legislation’, the CBI launched an attack on what it called an over prescriptive approach to environmental laws. It called upon government to listen to industry and to concentrate pollution control on the biggest risk areas. According to the chairman of the CBI’s environmental protection panel, the existing approach to legislation did not take account of the cost of regulation and its impact on the competitiveness of industry. By using a risk-based approach, the CBI argued that the government could achieve a better system of regulation without compromising business competitiveness.

In the last few years the CBI’s views and position on environmental issues and a host of matters from transport to taxation have become more widely articulated through its comprehensive website and through its information and research services. The easily accessible policy briefs on topics of interest and concern to the CBI are a useful resource for students of business, as are its ‘policy briefs’, which summarize the CBI’s policy positions on key business topics.

While it is impossible to say with any degree of certainty how influential industry is in shaping government policy in this or other areas, there is little doubt that the views of leading industrialists and their representative bodies and associations have received increased attention, particularly under recent Conservative administrations. Regular pronouncements by senior government ministers, including the former Prime Minister and Chancellor of the Exchequer, frequently refer to the fact that a particular policy or piece of legislation has been framed ‘with industry in mind’ and there are clear signs that the current Labour government under Tony Blair has sympathies in the same direction. It is not without just cause that the CBI claims that it has ‘unparalleled access to decision-makers in White hall, Westminster and Brussels’ and that it is often consulted informally before new proposals are published for full public debate.


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