Is Political Risk at An All-Time High? When Economics & Politics Collide
As a respected economist, founder of her own research company and a former Government Minister, Kitty Ussher is perfectly placed at the convergence of economics and politics. She talks to us about how political risk is affecting business decisions in today's unpredictable climate, how she entered the world of politics, and what she aims to share with audiences during her public speaking sessions.
Hi Kitty. Are there any noticeable differences between the ‘language’ and goals of those working within these two fields? If so, how do you break down the barrier in your speaking?
Politics is about achieving tangible change, and so uses the language of vision and action, whereas economics is a social science, and so uses the language of analysis, description and interpretation of events.
But, of course, the two are inextricably linked - particularly on the national stage where macroeconomics and governmental politics collide. So much of what politics tries to achieve at a national level either relies on the tools that the discipline of economics has developed, or is judged through the lens of economic analysis.
As a speaker, I use the language of social sciences in both, because commercial speaking is not (usually) a rallying cry to achieve change. Instead, I try to use my knowledge of how politics works, and its interrelationship with economic forces to make sense of what is happening and provide a framework to think about it.
Given the unpredictability of politics recently, could it be said that political risk at an all-time high for UK businesses? Can you define this risk in terms of the major political events/situations that have taken places recently?
It's certainly high, and, more importantly, it's persistent.
But I'm not sure that it's an all-time high. There have been other spikes in recent memory: the second half of 2008 was particularly notable, and there was also a time of acute uncertainty in the summer of 2012. Businesses hate it when their operations are affected by things outside their control, and the nature of the future trading environment of the UK is now unknown, and likely to remain so for a while as a result of the Brexit vote. On the upside, however, the economy as a whole was (finally) in a pretty strong cyclical position prior to the vote, so it could be worse.
Kitty helps companies calculate political risk
How does this political risk affect businesses and their strategies – large and small? Importantly, how can it be managed by business owners going forward?
Risks can always be managed through hedging, preparation and strategy. The problem comes with the broader concept of uncertainty - when the prospect of change is either so large, or so unanticipated, that it cannot be planned for. That's what is so difficult to deal with.
At the moment we don't know what will change, or, if it does change, when it will happen and how the overall business environment, even for smaller non-trading companies, will then react. So we really have uncertainty rather than a quantifiable risk, and it weighs down on everything in a nebulous negative way.
How did you get into speaking, and who are your main audiences? What are the key messages that you aim for them take away from a session with you?
I'm no stranger to performance.
Earlier in my career, I used to write speeches for other ministers and then gave many myself when I was in government. If you can deal with the baying crowds in parliament, or hostile BNP candidates in a local political hustings, the after-dinner and conference crowd is a positive joy!
When I left parliament, I got a lot of invitations to speak to corporate and academic audiences. I enjoyed it and so decided to pursue it a bit more systematically. Separately, I also enjoy speaking to sixth-formers through the pro-bono Speakers for Schools initiative. I like people to take away a framework in their minds that helps them to view the current economic and political situation so that can identify the key trends and forces that are in operation and get it to work for them.
The former MP for Burnley
You were the MP for Burnley from 2005 to 2010. What did you learn from this experience?
It was the best thing I have ever done. I loved my constituency and was proud to be able to champion it and to support the community as well as any individuals who needed assistance. I'm particularly proud of the regeneration we managed to bring; for example, a new university campus and the campaign that eventually led to a direct train line to Manchester.
The lifestyle of living in two places was less fun and, with two small children, it eventually got the better of me. However, we remain committed to the community - and are bringing the children up to support Burnley Football Club!
What have you been up to since stepping down from Parliament in 2010, and what’s next for you?
I've been working in the field of public policy research, first through established think tanks and then by setting up my own company with friends to pursue our own "thought leadership" content ideas. I consider myself immensely lucky to be able to earn a living exploring public policy questions that feel very relevant to everyday life, particularly around poverty and inequality in Britain. On the side, I'm also a member of the FCA financial services consumer panel, which continues an interest I've always had in the financial services sector (I was City minister from 2007-08). I also enjoy public speaking.
This is all working well for me for now but I am sure that at some point I will want to return to public service in some form, but I have no plans to seek an elected role for the foreseeable future!
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