Douglas Carswell

23 SEP 2016

Is Theresa May prepared to fight corporatism?

City AM reports that Theresa May is scrapping David Cameron's Business Advisory Group – a forum for the PM to be lobbied by corporate cronies. I hope it's true. Less corporatism can only be a good thing.

Britain may not have a corporate lobbying industry on the scale of K Street in the United States, but it's still pretty extensive.

Whitehall is never short of corporate affairs executives seeking official audiences. Ex-ministers are routinely recruited to lucrative "advisory roles" in big corporations.

Those bidding for government contracts or patronage aren't even shy about currying favour. It's no coincidence Westminster station is plastered with adverts for defence contractors and runway-hungry airports.

The influence of vested interests creates conflicts of interest. MPs – including ministers – are there to stand up for their constituents. It's impossible to represent Big Business simultaneously. Lobbying directly undermines democracy.

"But what's the alternative?" You might say. "Surely businesses would be stupid not to lobby government."

That's true. But only because government makes lobbying profitable.

Our supposedly free-market economy is really a permission-based system. Unless you have official approval – whether from regulators, local authorities, Whitehall, or Brussels – you can't sell your product.

Markets depend less on what buyers want than what mandarins permit.

For big corporations, that creates a huge opportunity. The reason they put so much money into lobbying isn't just to get their products permitted. It's to get their competitors' products prohibited.

Which is why, when leftists say the way to constrain corporatism is more regulation, they're playing right into the hands of the CEOs. Regulation isn't a threat to the biggest players. It's what keeps them in business.

Our permissions-based economy is what allows big corporations to rig the market against upstart rivals, and shut out wealth-creating disruptive innovation. Maybe that's why productivity is stagnating.

To end lobbying culture, we'd need to get rid of the gains lobbying generates. That requires less government intervention, and more regulatory competition.

Closing one cosy corporatist club won't reform our economy. But it's good to see this government might be less beholden to vested interests than the last.

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