On the whole, British small businesses are unimpressed by the Confederation of British Industry (CBI), the organisation the media trots out when it wants someone to “represent business”. The CBI is actually the voice of big business, and it is dominated by people are too frightened of rocking the boat – lest it endanger their firms’ government contracts and their personal hopes for knighthoods or peerages – to speak out boldly.

So it is a pleasant surprise to read the outgoing President of the CBI, Sir Richard Lambert, telling the truth very bluntly indeed. It is perhaps significant that he is the outgoing president, that it was his last major speech in office, and that he is already a knight. Perhaps he felt he had nothing to lose. Clearly there will be no Lord Lambert.

Sir Richard, as he will remain, started by reaffirming that business supported the British government’s spending cuts. However, he went on to say it was “not enough just to slam on the spending brakes”.

If government wants the private sector to generate employment – not least to replace jobs lost in the public sector through cuts – then government should be “making it easier to employ people, not harder”.

The opposite is happening. Politically motivated initiatives are actually damaging the private sector, says Sir Richard. Although, typically, the government-owned and centre-left BBC report neglects to mention it, this is clearly a reference to the generally despised Equality Act, and to the proposal to extend paternity leave, among other things.

It seems that the current British government, like its predecessor, will pay lip service to the needs of private business, because it knows it needs it, but has no real sympathy for it. Given a choice between increasing the nation’s wealth and engaging in populist stunts, no matter how damaging, it chooses the latter every time.

Sir Richard sums up the problem by saying that the British government lacks a broader vision of what the economy should be.

This is a fair criticism – but it applies to more than just the current British government. The same can be said of its predecessor, and of the American government, and of most of Western governments of the last twenty years.

To find governments that really cared about productivity, we have to go back to the Cold War period. It cannot be denied that the socialist regimes of the East had a vision of their economic ideal, albeit a nightmare vision. What the West needs are governments that share the obsession of totalitarian states with increasing production figures, but which realise that liberal free-market policies are the best way to attain them.

Britain’s new economic strategy is sound: cut the wealth-consuming public sector and expand the wealth-producing private sector.

This is no more than simple common sense. Yet the UK’s public sector has been expanding for years while the private sector has not been growing as it ought. The laws of mathematics tell us that the inevitable consequence of increased expenditure and insufficient income is debt. It is a shame that it took a recession to force Britain to face that reality and try, at last, to reverse both trends.

The problem is that, in adopting this laudable strategic objective, Britain’s new Coalition government has no idea how to achieve it.

Here is how to do it. Do not try. Just let business get on with it. If the politicians and bureaucrats would leave us alone – and by that we mean take away all their meddling, interfering regulations, rules and compliance burdens – the private sector would not only achieve their objective of taking up the slack of the reduced public sector but would go on to expand far more than their narrow little minds could ever imagine. History proves this.

However, the politicians do not really have faith in this. Unless they are prepared to act on their words, business will not be able to take up the slack. The strategy will then be perceived to be failing, then blamed, then abandoned – without really having been tried.

If they rely on business, they must trust it. They must take us seriously when we say that legislative interference like the “Equality Act” in the UK, the maternity proposals of the EU, and the poorly drafted healthcare reforms in the USA, will prevent us from completing the tasks they have assigned us, to generate income and employment.

They must also understand that no government schemes or spending programmes designed to “help” business can make up for that interference. For President Obama to tout a “Small Business Bill” after approving the pork barrel of the stimulus package and federal healthcare is like shooting a man in the guts and then offering him a Band Aid.

Similarly, the language of the new British government is suspiciously reminiscent of its unlamented predecessor, which thought a few handouts to selected businesses – its friends – could compensate for increased tax and regulation that drove businesses and jobs abroad.

Message from Business to Government: Yes, we can take up your slack for you – but only so long as you do not try to “help” us – just get out of our way.

A controversial candidate in this year’s US Senate elections feels that the media are not portraying her as she really is, so she came up with a clever little advertisement in which she looks at the camera and says “I’m You”

...only to be met with entirely predictable chorus of “Oh No, You’re Not”.

Yet the question implied in the advertisement is a good one. Who in government is “Us”? In particular, who among our hundreds of thousands of bureaucrats and politicians really identifies with the millions of hard-working entrepreneurs who generate all the wealth and pay all the taxes to fund our rulers’ expensive lifestyles?

In the UK, we are ruled by an independent political class that is increasingly divorced from the real world. The leaders of all three major political parties look like clones – all thin, dark-haired males in their early forties with the same privileged background, Oxbridge degrees, and not a single day of real business experience between them.

The same description, sometimes with slight variation, applies to most of the people around them. The fact that they know nothing about business does not stop them interfering with it. Indeed, the more ignorant they are, the more they want to interfere.

Real businessmen are, of course, too busy running their own businesses to respond in kind. At best they might take a break long enough to write a letter to the newspapers, like the one signed by 35 leading British businessmen urging the government to be firm on cutting state spending. These letters can do some good. A similar letter just before the May general election stimulated a long overdue debate on payroll taxes.

Yet it would be a mistake to think that 35 of the highest paid executives in the country speak for all five million British businesses – some of whom are frightened by the prospect of cuts because they depend on government contracts. Nor are the five million represented by Sir Philip Green, Chairman of the Arcadia Group, who spoilt an excellent report on government waste by suggesting the state should delay payments due to private business. Late payment by government has long been identified as a major source of cash flow crises.

Big business and the banks have a fairly loud voice, but who speaks for the vast majority of those five million, who are small businesses or self-employed entrepreneurs?  We do not trust the fat cats of the CBI to speak for us, nor moribund Chambers of Commerce, nor the ineffective FSB, nor a celebrity “czar” ...

nor the bankers who are always being brought into government – our second worst enemies joining our worst! Where is our voice?

It seems sometimes that half of modern business life is complaining about bankers – and the other half is complaining about government.

Yet surely the notion that the two are working together to serve their own ends at the expense of everyone else is nothing but the stuff of extreme left-wing conspiracy theory?

We can no longer be certain about that. At a time when one would imagine that bankers would be hiding their faces, after the irrational greed of the banking sector turned an overdue but predictable recession into a near catastrophe, the links between government and big bankers are stronger than ever.

The new British government has just appointed Stephen Green, Chairman of HSBC, as its new Minister of State for Trade. His predecessor in that office, under another political party, was Lord Davies of Abersoch, who was previously Chairman of Standard Chartered.

It seems that, as far as British trade policy is concerned, political parties come and go but the influence of the big banks remains constant.

If that is not enough, surely it is odd that the British government was apparently informed of the appointment of Bob Diamond as Chairman of Barclays before it was announced to shareholders. The Chancellor of the Exchequer, the UK’s Minister of Finance, says he looks forward to working with Mr Diamond – a strange way to express the relationship between a chief regulator and his supposed adversary.

It should be stressed that this blog is not criticising Messers Green and Diamond as individuals, and that HSBC and Barclays were not among the worst run banks that had to be bailed out by direction injections of taxpayers’ money.

However, this chumminess between big government and big banks does strike a sour note at a time when millions of small businesses are still struggling to deal with the consequences of their combined incompetence.

It is also bad for Britain that the “voice of business” in British government circles is the voice of the big banks – who do not have the interests of other businesses at heart.

Where, we ask, in all this is the voice of five million small businesses?

We had no sooner posted our last blog entry than we read official confirmation of everything we said about governments not listening to people.

Britain’s new Coalition Government made a great show of asking for public “input” on a range of issues. Almost ten thousand people took the time and trouble to send in their thoughts, but there have been no substantial changes to government policy as a result of them.

The whole thing was a public relations exercise.

We should not pretend to be outraged or even surprised by this. In any organisation, from a government to a small business, power belongs to those who control policy. No one in their right mind is going to give up that control or their own power.

Even ideas can be instruments of power. An idea has no value unless it is owned by someone with authority within the organisation. If he can call it “his” idea, then it increases his own power and he will promote it. If he cannot call it “his”, then it is in his personal interest to block it in favour of some idea of his own. Whether the idea in question is good or bad is of secondary importance.

In the case of the Coalition Government, power lies with those who agreed its programme. It is absurd to imagine that some suggestion off the street would ever be allowed to alter that programme.

In the case of a small business, power lies with the entrepreneur. Requests for customer feedback and suggestion boxes are never going to take the place of the entrepreneur’s own vision for the business.

If the entrepreneur has no such vision, so that he actually depends on customer feedback and suggestion boxes because he has nothing else, he will not be an entrepreneur for long. The same is true of a government.

So the whole point of any consultation process is not to generate ideas, and certainly not to make policy, but to make the consulted feel happy and important because they have been allowed to have their say.    

As the Nobel Laureate novelist John Steinbeck put it, “You do not want advice – only agreement”.