Politics – bloody hell.
The past 12 months have been a period of sustained confusion for UK citizens and businesses alike. We have had three prime ministers, only one of whom was elected and one whose 44-day premiership was outlasted by a lettuce, four chancellors and three home secretaries. Cabinet reshuffles have become more like games of musical chairs.
Factor in the ongoing complexities of Brexit, which still isn’t ‘done’ by the way; the lingering effects of coronavirus lockdowns; the country’s biggest tax burden since the 1950s; 41-year-high inflation; Russia’s invasion of Ukraine and its knock-on effect for European energy bills; and it should be easy to understand why there is a cost-of-living crisis. Better yet, let’s call it a cost-of-everything crisis.
There’s an old adage: if you don’t do politics, politics will do you. This year has confirmed that business professionals, in particular, cannot afford to be passive. Every government policy, and every U-turn, has had a direct impact on revenue, profit margins, recruitment and retention and, perhaps most importantly, wages.
Trussonomics
In a crowded field, September’s disastrous mini-budget, which effectively lit the touchpaper for prime minister number two Liz Truss’s demise, was probably this year’s economic lowlight. Truss, along with her chancellor Kwasi Kwarteng, ushered in an ideologically ambitious but uncosted plan to cut corporation tax, stamp duty and national insurance.
It backfired catastrophically, causing sterling to plummet in value as well as a gilt market collapse. The trouble with trickle-down economics is that it rarely trickles down.
The culture wars
Away from the government, even working culture has been politicised. This year has seen clear battle lines drawn regarding remote or flexible working. Some companies, such as Airbnb, introduced supremely flexible work-from-anywhere policies. Others have introduced a four-day week. And others have insisted on presenteeism and a commitment to the traditional Monday to Friday 9 to 5 in the office.
Supporters of the latter, such as The Daily Telegraph, have suggested that too much working from home could have a damaging effect on the economy. This is supposedly because it will lead to less footfall and passing trade for cafes or high street shops.
Climate change
This year has also drawn the subject of climate change into sharp relief. On 19 July, the UK experienced its hottest temperature with 40.3°C (104.5°F) recorded in Coningsby, Lincolnshire. Throughout July, there were several wildfires caused by extreme heat in parts of Surrey, London, Dorset and Shropshire.
The amplified anxiety around carbon emissions and the human role in climate change has caused many companies to afford greater priority to their ESG credentials. But some political pressure groups, such as Extinction Rebellion and Just Stop Oil, who have staged multiple acts of vandalism and public disruption in 2022, have argued that many companies’ and indeed the UK government’s responses to climate change are simply not radical enough.
Roe v Wade
Elsewhere, in the US, 2022 has even seen politics have a direct impact on HR practices. When the landmark Roe v Wade case, which conferred a woman’s federal right to have an abortion, was overturned by the Supreme Court in June, it eradicated half a century’s worth of legal protection. It allowed individual states to dramatically reduce or even entirely remove their abortion rights.
Following the decision, several high-profile companies with global office locations including Disney, Google and JP Morgan, introduced financial support for any staff who might end up seeking an abortion but live in one of the affected areas. Progressive support such as this, it could be argued, is one of the better things to come out of 2022: a growing sense that companies have more of a duty to their staff than simply providing a salary.
Political engagement is no longer optional
Ultimately, there are two ways of understanding politics. The first is within the context of administration, in the pure sense of policy-making. The second is as an activity, in the sense of the causes and concerns that are shaping public discourse.
A strong understanding of both ways is essential to running a business. And in these challenging times, the most successful companies will be those which remain engaged and are adaptable.
