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In an age of austerity can capitalism really be popular?

When even David Cameron has his doubts, backing business is a thankless task

Banging the drum for British business can be a thankless job at the best of times; but now, as politicians across the spectrum vie to offer searing critiques of capitalism, it’s hardly surprising many firms feel unloved. In London this week, a new campaign will be launched, aimed at persuading the recession-scarred public that “Business is Good for Britain”.

John Longworth, director general of the British Chambers of Commerce (BCC), which came up with the idea, is keen to separate his members – typically smaller companies – from the bonus-wielding City fat cats and boardroom bosses whose behaviour so infuriates the public.

“These are businesses that are civically minded; they’re businesses that are part of the local community; they care about what they’re doing,” he says. “They’re passionate about creating wealth and jobs, and doing the right thing.”

And it is creating jobs that most of the British public regard as the main responsibility of business, judging by a survey carried out by polling group ComRes for the BCC. More than two-thirds (72%) of the 2,000 people surveyed thought that a company’s first priority should be to its workforce; less than a third said its shareholders should come first. “We have got to get business-focused in the UK,” Longworth says.

But the problem for him and his members is that at a time when falling living standards and rising unemployment are making life hard, many of the public have come to associate business with the get-rich-quick “predators” attacked by Labour leader Ed Miliband in his party conference speech last autumn; and even Cameron has admitted that something has gone awry.

Chuka Umunna, Labour’s shadow business secretary, says: “I’m extremely worried that business is being depicted as being in the naughty corner. Business relies on society to provide the talent and skills they need, and society relies on business to create wealth and prosperity.”

Andrew Cave, spokesman for the Federation of Small Businesses, says many smaller firms would agree with the argument that something has gone wrong with the system.

“Our members are the victims of many of the practices that are now being picked on by politicians,” he says. Small British firms – with an average of four employees – often remain small: “There’s a very strong argument to get back to the kind of capitalism that allows companies to grow from the smallest businesses to the biggest.”

British entrepreneurs tend to expand their firm to a certain size and then sell out, often to an overseas investor – or, in more recent years, a private equity house. So Cave says one of the things that may need a rethink is the government’s role in nurturing the growth of firms. The Department for Business, Innovation and Skills, and its predecessor, the DTI, have traditionally taken a hands-off, laissez-faire approach, championing foreign investment and deregulation; but even in the US, cradle of no-holds-barred capitalism, the government has often intervened to block takeovers and champion domestic firms.

President Obama has proudly cited the resurgence of American carmakers GM and Chrysler, which were bailed out by Congress at the height of the credit crisis, but have since bounced back.

“When you actually go to the States, there’s a huge amount of protectionism: it stems from a pride in having a business that grows out of its local community, and has roots in its community,” says Cave.

Under Lord Mandelson, and now Vince Cable, the department for business has tried to take a more activist approach, and the government’s new Enterprise Zones are meant to encourage business expansion, by granting tax breaks to firms that create jobs. But with corporate tax avoidance, bumper bonuses and rising unemployment hitting the headlines, teaching Britain to love business will be a hard sell. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds