There would be 700,000 extra businesses in Britain if our level of female entrepreneurship matched that of the USA, John Hutton told Progress last Tuesday in Westminster.

Hutton called for a new culture of business and enterprise irrespective of gender, race, age or social background and admitted that the lack of women’s entrepreneurship is caused by a deep structural fault in British society.

As Fabian women know only too well, this problem is in the long tradition of the undervaluation and under-use of women’s skills in the economy.

The government’s Women and Work Commission report found that 50 per cent of women are employed part-time work at below their skill level – and, so, of course, below their pay level too.

This is why Hutton’s call to celebrate huge salaries has a somewhat hollow ring for women in light of the 17 per cent full-time gender pay gap and the 41 per cent part-time gender pay gap. Over 54 per cent of women earn less than £15,000 a year.

The Fabian Women’s Network strongly welcome the government’s planned new provision of enterprise, knowledge and skills support for women through women’s business centre pilots, a national mentoring scheme for women, and measures to ensure equal access to finance and to corporate and public sector contracts for women-owned businesses.

Winning on Equality

This is a government which puts equality at the heart of its agenda and has a strong record of delivering on equality issues – starting with the arrival of the 101 new Labour Women MPs at Westminster in 1997, followed by the extension of maternity leave and pay, the introduction of paid paternity leave and the national minimum wage, the right to flexible working for parents and carers, child tax credit, and tackling child poverty and women’s pension reform. These and other equality measures were opposed by the Tories.

At the personal level, starting a business means that women can work flexibly and control their own work patterns to fit in with their unpaid caring commitments. Women still undertake the lion’s share of unpaid childcare and eldercare.

At the political level, delivering the ‘untapped economic dividend’ of women’s potential to business will enrich the country and go further to fulfil Labour’s twin achievements of social justice and economic efficiency.

I have known John Hutton for a long time. When I was Peter Mandelson’s assistant he was a new MP, clearly committed and talented. He has been a solid and loyal minister and I agree with much of what he says. Indeed I agreed with almost all of what he said at his infamous lecture. But some of what he said worried me a great deal.

In particular I don’t think that politics should be – or has to be – a moral free zone. How do we justify what political parties do – pass laws, raise taxes, use the power of government to try and change behaviour – indeed thinking – if we are not doing so on the basis of what we believe, and have convinced our fellow citizens – is right? More specifically, as I said to John that evening: how do we justify the top rate of tax if we don’t have a ‘moral’ objection to very high earnings?

Of course he is right that Labour must be the party of success and ambition. But we should also be able to say that we are worried when levels of rewards seem so out of kilter with what feels right to us – and crucially, what most voters feel is right. What is the point of positioning ourselves to the right of the Financial Times, many businessmen and, astonishingly, the Conservative front bench? If John Hutton had made his remarks as an anonymous focus group participant he would have had the whole room rounding on him in disbelief, opposition and anger. If he’s in doubt let him go to a super-marginal and argue it in a pub.

Darren Murphy, who also contributed to the discussion that night made a good point, as one would expect. He argued that we shouldn’t say we are against monster salaries because we can’t do anything about it. Well, leaving aside whether that is true – there probably is room for slightly more redistributive tax system – that is not the point. In the modern age, as David Cameron has clearly learnt, people don’t just want their politicians to issue laws, they want them to show some social, cultural, and yes, John and Darren, moral leadership. Just look at Obama in the USA.

Now, as social democrats we will never just believe in warm words, we will want political action to back up our sense of injustice but there is a balance. This time, I’m afraid, John got the balance wrong. We have to be identified with people getting on and doing well but not with no-limits, bugger to any notion of equality, greed is good capitalism. It isn’t in tune with our values and isn’t even popular, so its simply not Labour – old or new.