Introduction

This chapter considers the national picture, examining the role that business has played in British social policy since 1979. It focuses on the views of organised business on social policy and its influence on the policy process and institutions of the welfare state. It also considers the role played by central government in creating a more influential and prominent role for business interests, and the private sector more generally, in social policy development and delivery. The chapter looks primarily at the Confederation of British Industry (CBI), the most important of the UK’s business interest associations (BIAs), although the views of other BIAs, including the Institute of Directors (IoD) and the Engineering Employers Federation (EEF), are considered where appropriate. As the UK’s only peak-level BIA, the CBI incorporates a national membership of firms of different sizes, originating from a range of different sectors, as well as smaller business associations. Peak-level BIAs tend to be the most influential of business organisations since they represent a diverse range of business opinion, drawn from the largest and most important national companies (Offe and Wiesenthal, 1980).

Corporate power and national politics from 1979

The period immediately before the election of the Conservative government in 1979 was marred by economic weakness, high levels of inflation, increased government borrowing, growing unemployment and recession. Although economic crisis was not confined to the UK, relative economic decline over several decades placed Britain in a particularly vulnerable position (Gamble, 1990). High inflation, accompanied by high levels of unemployment, posed a challenge to Keynesian demand management that the Labour government felt it could not resolve. The priorities for government spending gradually shifted over the 1970s from state investment, geared towards boosting consumer spending and promoting economic equality, to investment in order to boost private sector competitiveness and productivity. So began the ascendance of neoliberal ideas.

The victory of neoliberal ideas was not firmly established, however, until after the election of the Conservative government in 1979. According to the Conservative’s brand of neoliberalism, economic growth could best be guaranteed through free market principles underpinned by private rather than public investment. Accordingly, regulations on the free movement of capital were relaxed and a concerted effort was made to ensure that the interests of the business community were placed centre-stage.