The Tories no longer understand the City

Simon Nixon says David Cameron’s Conservatives must stop sending out such mixed signals if they want to establish serious credibility with the business community

Gordon Brown has done many things to discombobulate the Tories since becoming Prime Minister three months ago. But none so effective as the creation of a new ‘business advisory council’ including many of the grandest names in British business, from Sir Terry Leahy of Tesco to buy-out baron Damon Buffini of Permira. This was a real coup — which is why he launched it on his first day. At a stroke, he quashed speculation he would lurch to the left, secured the implicit endorsement of some leading wealth-creators and signalled he would make economic growth his priority, in contrast to David Cameron’s fuzzy focus on GWB, or ‘General Well-Being’.

The groundwork had been carefully prepared over the previous 18 months. In a repeat of the prawn-cocktail offensive in the run-up to Labour’s first election victory, Brown dispatched his acolyte Ed Balls, then financial secretary to the Treasury, to woo the City. Brown’s reward has been a 25 per cent opinion poll lead over the Tories on the question of economic competence that persists despite (and may even have been reinforced by) the Northern Rock debacle.

Brown may not have forgotten the lessons of 1997, but their importance still seems lost on some Tories. Britain may be ambivalent about the City, but it is still the goose that lays the golden eggs and its endorsement is a vital test of political credibility. Yet senior Tories did not seem to appreciate the significance of Brown’s co-option of his new business buddies. The bosses were simply sucking up to power and would regret it when they realised they were being used, one shadow Cabinet minister told me. Another said contemptuously, ‘The City has never understood politics.’