Corporate treasurers in the last three years have lived through some pretty hairy times as the financial markets and the world economy have both endured some extraordinarily hard knocks.
It would be good to believe that some of the lessons emerging out of this crisis will be taken to heart and acted on by whoever forms the next British government. As the country’s political parties square up to each other for the general election the campaigns will inevitably concentrate on the more headline-grabbing elements of the political process. Column inches will be taken up with bankers’ bonuses rather than Basel III.
But once the election is over, the victor will have the hard and detailed job of working out a sustainable future. One of the key tasks will be to provide the wealth-creating sector of the economy with the conditions it needs to generate the resources that will then give all of us the public services and standard of living to which we aspire.
Away from the electioneering razzmatazz, if corporate treasurers could have a quiet word with the chancellor of the exchequer and those who work with HM Treasury their wish list would not be particularly onerous.
The key points would be stability and certainty. Wherever government or its agencies touches business – the myriad of business and financial regulation, taxation, the overseeing of the financial system – the best outcome for treasurers is to know that politicians will not abruptly change policies, adding complexity and uncertainty.
Businesses need to be able to plan but that is hard to do if the law on issues such as pensions or taxation is in a seemingly perpetual state of flux. Treasurers accept that regulations will change, reflecting altered circumstances and priorities, but all have a responsibility to ensure they are sensible, workable and measured.
Businesses and governments need to work hard to ensure there is trust and belief in one another. The banking crisis has cast a pall over the whole of the relationship between public and private sector but this now has to lift and relationships rebuilt. The experience of the ACT shows there can be a dialogue and that lawmakers can be open to changing their mind if they understand the concerns. The financial crisis has seen the ACT become a constant source of advice for government and regulators, and treasurers’
work on influencing European over-the-counter derivatives reform is a prime example of the possible depth and detail of co-operation.
In a democracy governments have to answer to the people, and in a market economy business has to answer to the consumer. Perhaps in that sense politicians and treasurers have more in common than both would like to think. In any case a general election is an opportunity for a pause for thought and then a determination to work again for the common good.
