Andy Burnham’s Business Secretary Can’t Name Anyone in Cabinet with Business Experience
One of the most revealing moments in Andy Burnham’s new government may not have been a major policy announcement or a dramatic parliamentary confrontation. It was a much simpler question: can the Business Secretary name someone in the Cabinet with genuine business experience?
The difficulty in answering that question raises an uncomfortable issue for a government that claims to understand the needs of British businesses.
Andy Burnham has made economic renewal one of the central themes of his premiership. His government says it wants to reduce the cost of doing business, support smaller firms, encourage investment and create growth outside London. Burnham has also acknowledged that businesses are struggling with high costs and has promised that the forthcoming Budget will look again at business rates.
Yet there is an obvious contradiction.
If business is supposed to be at the heart of Britain’s economic recovery, where is the business experience inside the Cabinet?
This is not an argument that every minister should have spent twenty years running a company. Government is not a boardroom, and running a country is fundamentally different from running a business. Ministers need political judgement, social awareness and an understanding of public institutions. A successful entrepreneur would not automatically make a successful minister.
But experience matters.
A government that is trying to reform the economy should understand how its policies are experienced by the people who actually employ workers, invest money, pay taxes and take financial risks. There is a difference between reading about business in policy papers and having personally experienced the consequences of a bad cash-flow decision, a failed investment, a difficult recruitment process or an unexpected rise in operating costs.
That difference becomes particularly important when politicians design policies for small and medium-sized businesses.
For a large corporation, a change in taxation or regulation can be absorbed by a large organisation with specialist lawyers, accountants and government-relations teams. For a small business, the same change can determine whether the owner employs another person, postpones an investment or closes altogether.
Burnham’s government says it wants to help businesses with precisely these pressures. The Prime Minister has already introduced measures affecting business rates and has argued that the cost of doing business is too high. At the same time, however, he has been careful not to promise that every problem can be solved immediately, acknowledging the difficult financial outlook facing the government.
That caution is welcome.
But it also makes the question of expertise more important.
If ministers are going to ask businesses to accept major changes to taxation, regulation, employment policy and public ownership, they need to understand not just the theory but the practical consequences.
Burnham’s economic philosophy is also distinctive. He believes that greater public control over essential services can help reduce household costs and stimulate economic growth. His government is considering a long-term programme involving greater public ownership of areas such as energy and water, while also pursuing reforms in transport and other public services.
This is a perfectly legitimate political argument.
But it is also an argument that requires serious economic scrutiny.
Public ownership does not automatically mean lower prices. Nor does private ownership automatically mean efficiency. The real question is whether an organisation is well managed, properly regulated, financially sustainable and capable of delivering value to consumers.
That is where business experience could make a difference.
A minister with experience of actually running an organisation might instinctively ask different questions. How much will the reform cost? What are the transition costs? Who carries the risk? What happens if the assumptions prove wrong? How will productivity be improved? What incentives will employees and managers have? How will investment be financed?
These questions are not ideological.
They are practical.
And politics desperately needs more practical thinking.
The danger for Burnham is that his government could become too comfortable with the language of political ambition. Public ownership, cheaper transport, better services, regional growth and higher living standards are all attractive ideas. But attractive ideas are not the same thing as workable economic programmes.
This is particularly relevant because Burnham’s political appeal is based heavily on the idea of doing politics differently.
As mayor of Greater Manchester, he developed a reputation for regional activism and for challenging the traditional concentration of power in Westminster. Now, as Prime Minister, he is attempting to translate that approach into national government.
His summer programme has already been designed to demonstrate action. The government has introduced measures intended to reduce pressure on households and businesses, including changes affecting electricity costs, bus fares and business rates for certain hospitality and entertainment businesses. It has also announced a crackdown on misleading discounts and subscription traps.
Politically, this is clever.
Each individual measure is relatively easy for voters to understand.
But governing Britain requires more than a collection of visible interventions.
Eventually, the government has to produce economic growth.
And growth requires businesses.
This is where Burnham’s rhetoric towards the private sector will be tested.
There is a danger that the government may treat business primarily as something to regulate rather than something to understand. Businesses can be powerful institutions, and some have undoubtedly behaved irresponsibly. Consumers need protection from exploitation, and markets sometimes require strong regulation.
But businesses are also where investment happens, where people are employed and where new products and services are created.
A government that wants higher wages and better public services ultimately needs a productive economy capable of generating the wealth required to pay for them.
That creates a fundamental question for Burnham.
Does his government see business as a partner in economic renewal, or mainly as an obstacle to social reform?
The answer will matter enormously.
Burnham has tried to reassure companies that he understands the pressures they face. He has spoken about reducing the cost of doing business and has indicated that he does not want to promise measures that cannot be fully funded.
Those are sensible instincts.
But credibility is built not only through speeches. It is built through the people appointed to make economic policy.
This is why the Business Secretary’s inability to identify Cabinet colleagues with substantial business backgrounds is politically significant.
It creates an image problem.
Even if the government has good policies, voters and business leaders may reasonably ask whether the people designing those policies understand the world they are trying to change.
Of course, business experience is not a magic qualification.
Britain has had ministers with impressive corporate résumés who nevertheless made poor decisions. A business executive can understand balance sheets while completely misunderstanding public policy. Equally, a politician who has never run a company can become an excellent economic minister.
The argument, therefore, should not be that only businessmen should govern Britain.
It is that a government should have a healthy mixture of experiences.
Doctors should be represented in health policy. Teachers should have a voice in education. People with military experience can contribute to defence. And people who have built and managed businesses can contribute valuable knowledge to economic policy.
Diversity of experience is not a weakness.
It is a strength.
Burnham therefore faces a choice.
He can dismiss the criticism as another attempt by the opposition to portray Labour as anti-business. Or he can recognise that the criticism contains a legitimate warning.
If his government genuinely wants to become the government of growth, it needs to demonstrate that it understands how growth actually happens.
That means listening to entrepreneurs, manufacturers, retailers, investors, small-business owners and workers. It means understanding why companies choose to invest in one place rather than another. It means recognising that every additional regulation has a cost, even when the objective behind it is reasonable.
It also means being prepared to admit that government cannot create prosperity on its own.
The state can build infrastructure.
It can regulate markets.
It can educate workers.
It can provide public services.
It can create incentives.
But businesses and entrepreneurs ultimately make many of the investment decisions that determine whether an economy expands or stagnates.
Burnham’s government therefore needs a serious relationship with the private sector.
Not a relationship based on unconditional support.
Not one based on hostility.
A relationship based on realism.
This is where the question about Cabinet experience becomes bigger than a single minister’s awkward interview.
It is really a question about the identity of the Burnham government.
Is it a government that wants to transform Britain’s economic model while understanding the realities of modern capitalism?
Or is it a government that believes the state can simply take control of more areas of the economy and assume that better outcomes will follow?
The answer will become clearer as Burnham’s promises encounter the hard realities of government.
His programme is already ambitious. He wants to reduce household costs, reform public services, strengthen regional government and expand public control over essential services. At the same time, he must respect fiscal constraints and confront difficult spending choices.
That is an enormous political challenge.
And it makes business competence more important, not less.
The coming months will therefore be crucial.
If Burnham can show that his government understands both the social purpose of government and the economic realities faced by businesses, the criticism about Cabinet experience may eventually disappear.
But if businesses begin to feel that policies are being designed by people who have never truly understood the consequences of those policies, the accusation of being “anti-business” could become much harder to dismiss.
The irony is that Burnham does not need to become a Conservative-style champion of unrestricted markets to avoid this problem.
He simply needs to demonstrate that he understands business.
A Labour government can believe strongly in public services, workers’ rights, redistribution and public ownership while still recognising that profitable, productive and innovative businesses are essential to national prosperity.
That balance may ultimately determine whether Burnham’s economic experiment succeeds.
The question is not whether there are enough businessmen in the Cabinet.
The question is whether there is enough business understanding in the government.
And if the Business Secretary cannot convincingly point to that understanding among his colleagues, then critics are entitled to ask a much larger question:
How can a government promise to rebuild Britain’s economy if it does not appear to have enough people around the Cabinet table who know what it takes to build a business in the first place?
For Andy Burnham, that question may prove far more important than one awkward interview.
Because elections are ultimately won not by promises, but by results.
And businesses will be watching closely to see whether Burnham’s economic revolution creates real growth — or w