Has Big Business Lost Its Influence In Westminster?

There's no question that big business has always had a close relationship with the Tories. Many fat cats regard them as their natural allies and the party hasn't made any secret of this. In fact, the Conservatives make a point at election times of saying they're the only ones that can really work with the City. So, what happens when their most steadfast supporter, the Confederation of British Industry (CBI), comes out saying Theresa May's "Hard Brexit" risks destroying the UK's open economy?

The CBI aren't officially attached to the Conservative Party in the way unions are to Labour, but they nevertheless have particular influence over them behind the scenes. "Big businesses like to think they will have direct access to politicians without necessarily having to lobby in public, so obviously here they will have tried, ever since the leave vote happened and even before then, to make sure it's done in a way that isn't detrimental to them," says Andrew Blick, lecturer in Politics and Contemporary History at King's College London.

Financial services and the car industry are two big sectors particularly concerned about lobbying for soft Brexit. Financial service providers currently have an EU "financial services passport" that allows them to operate in any member state. If we leave the EU Single Market they risk losing this. This means, more paperwork and higher costs for them operating in the EU. Similarly, if we leave the EU Single Market, the car industry risks facing higher tariffs or taxes when they sell to Europe. According to Emily Jones, Associate Professor at the Blavatnik School of Government at the University of Oxford, May can't please everyone. "On the one hand she needs to reassure big business but she also needs to appease popular sentiment on immigration controls. This trade-off is at the core of the question of soft or hard Brexit," she says.

With the Tories seemingly prioritising immigration controls over business interests, could Labour then be a friendly option? Although traditionally, Labour has been regarded as the party of the unions, an attempt to woo the City in the 1990s under Tony Blair, dubbed the "prawn cocktail offensive", and New Labour were consistently pro-business, furthering Thatcher's low-tax, low-regulation policies.

Obviously, that's changed under Jeremy Corbyn. The message from party HQ is essentially "small business good, big business bad". Shadow Chancellor, John McDonnell, has even questioned whether capitalism is working. As a result, the CBI chief, Carolyn Fairbairn, warned back in May that Corbyn's anti-business message is damaging Labour's links with companies.

So have the two main parties really stopped representing the interests of British business? Blick says that those with big business interests have got nowhere to turn: "All businesses can do is try and lobby the Conservative party to shift their position. They are showing increasing desperation, which is why they are going public on this, they will have already tried to bring all this home to the government internally. Appealing to business leaders is clearly not where the Labour party's at at the moment."

Iain Begg, research fellow at the LSE, agrees. "The business lobby will certainly have been speaking behind closed doors to Brexit ministers - particularly David Davis and Liam Fox - and if they are getting an inadequate response and being too readily dismissed then the obvious next step in any campaign is to go public," he said. "However, there will be bits of the Conservative Party that will be deeply uneasy about this and that's where they'll be putting their pressure - the Nicky Morgans and the Ken Clarks of this world."

But, Begg adds, the government may yet change their position on Brexit, particularly if the business lobby can persuade some MPs to rebel: "The PM is aware she only has a small majority of seats and it takes only a handful of MPs voting against her and she is in trouble on a vote of any kind. Rebels in the Party, many of whom are ex ministers – Team Cameron effectively – will be looking on from the sidelines for evidence of things going wrong and they'll probably see Philip Hammond as some kind of an ally, putting pressure on him personally in his capacity of as Chancellor."

For now at least is putting the issue of immigration above business interests and economic credibility. Perhaps recognising that the Tories are always going to be seen as more economically credible than Corbyn's Labour, she is instead reaching out to the Tory base, and party activists are increasingly motivated by nationalism and ideas of parliamentary sovereignty.

"By choosing to prioritise restrictions on immigration rather than seeking the best possible trade agreement with the EU, the UK government is allowing anti-immigrant sentiment to take precedent over the UK's best economic interests," says Thomas Sampson, professor of Economics at the LSE. "Opponents of a hard Brexit need to convince the people of Britain that this is not the best course for the country to take."

There are some business leaders, largely those that supported the Leave campaign, do want a hard Brexit. One of Britain's biggest exporters, yellow digger manufacturer JCB, owned by mega Tory donor Anthony Bamford, has announced it's going to quit the CBI in protest at its stance on Brexit.

"We ought to give the EU a trade agreement and control our borders," says Peter Hargreaves, founder of financial services firm Hargreaves Lansdown and another Brexiteer. "We hold all the aces in this - we buy more from the EU than they buy from us. Organisations like the CBI are just bureaucrats. Entrepreneurs want free trade, they want reduced regulation. If we did all that in this country and made it a fantastic environment for business we'd be the greatest country in the world."

There is sympathy to this position in the Conservative party. Charlie Elphicke, Tory MP and Government whip, told me that "people like Anthony Bamford and Peter Hargreaves are right to criticise the CBI. For too long the UK has worked in the interests of big businesses and the jet-set elite, rather than the small businesses and ordinary hard-working Brits. Many owners of small businesses I have spoken to want full Brexit. They want an end to paying billions to Brussels bureaucrats and to get rid of EU red tape to boot."

Elphicke's language is strangely similar to that of Corbyn's, prioritising small business and traditional firms over big multinational organisations and the financial sector.

Of course, from tax breaks to some of the most lax financial regulation in the world, there are plenty of ways that government still bends to the wishes of big business. But on the issue of Brexit at least, it seems groups like the CBI are finally being told "no" by Westminster.

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