At least until Jeremy Corbyn’s surprise late entry, the Labour leadership race had been marked by one significant point of agreement between the candidates: that the party must shake off the impression it is anti-business.
The near unanimity is reassuring. But how can the next leader build an agenda which is genuinely pro-business and authentically Labour?
The good news is that three elements of our approach are naturally in line with the needs of business.
First, Labour is the only major party firmly committed to the United Kingdom remaining in the European Union. Over the past year, whenever I have spoken to overseas business leaders and investors, their first question about the UK was not who would win the general election, but whether Britain would stay in the EU. It is a huge factor in decisions about whether to invest in the UK and Labour is resolutely on the right side of the argument.
Second, Labour has generally been more positive about immigration than the Conservatives. Business leaders frequently express frustration at the increasing difficulty they have faced under the Tories in obtaining visas for employees – and this increases the cost and bureaucracy associated with direct investment in the UK.
Third, businesses do not simply want low taxes and laissez faire. They also need high quality infrastructure, from transport to telecommunications. Labour’s view of an active state, which is willing to borrow to invest, is much more likely to generate the ecosystem in which businesses of all sizes can flourish.
But our recent defeat shows that these building blocks are not enough. Indeed, there is a strong chance that we will lose some of them by the next election.
By 2017, the referendum on Britain’s membership of the EU will have taken place and Europe might no longer be such a live political issue.
Immigration too could fall by the wayside if – as the leadership campaign so far suggests – Labour changes tack significantly in order to win votes back from Ukip.
That leaves only borrowing to invest in infrastructure, and it would be dangerous if Labour’s only positive message to business involves us creating more debt – even if it is for things that business might like.
So what must Labour do?
The first change is easy. We need to shift the tone in which Labour speaks about business.
It is not enough to praise small businesses or manufacturers who are ‘creating the right kind of jobs’. That still keeps us in the paradigm of ‘predators versus producers’.
What about big supermarkets, banks or outsourcers? They all fulfil the fundamental purpose of a business, which is to produce goods or services that customers choose to buy. If they are playing by the rules and they make a profit, Labour party should applaud them.
The second change is harder. It is to do with how Labour responds when we feel a business is not playing by the rules.
What worried so many investors in the past few years was that some of Labour’s announcements, for example on energy prices and the size of the banks, were on issues that they thought were the responsibility of independent regulators – not politicians.
If Labour stepped in, what was to stop the party intervening arbitrarily in any sector if something was unpopular, or if we thought someone was making too much profit? Could any investment really be secure?
Clarity and predictability are key for investment decisions. By all means, the new Labour leader should lead a review of competition and consumer protection law so that the rules under which businesses operate are up to date with the ways in which technology and our economy are changing. But when we have put that legislative framework in place, we should leave it up to the Competition and Markets Authority to assess how the law applies in individual cases.
We would not ask politicians to take the place of the Crown Prosecution Service in deciding whether to bring prosecutions under the criminal law. Neither should we ask ministers to take the place of the CMA.
If the next Labour government sets out transparently the circumstances in which intervention in markets will be justified – and then lets the regulators get on with the job – businesses will have greater confidence to invest in the jobs, skills and infrastructure that we all want to see.
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Stuart Hudson is a former adviser to Gordon Brown and a partner at the corporate advisory firm Brunswick
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The challenge expressed above is one that cuts to the very core of the Labour Party. Too often we allow ourselves to be portrayed as some historic and outdated opposition to those with aspiration and wealth. We often perpetuate this with the narrative we choose and the language we use. As a result, many in the Labour family are viewed as looking longingly back at a simpler story where “the bosses were against us and it was our job to fight them”. Truth is, today, we are the bosses. Self-employed, small business, local service providers – these are now the employers this ‘nation of shopkeepers’ is built upon. The days of big unionised manufacturing and local authority employers have faded away. So, why do we have a problem expressing our admiration and support for those in business? – Building your own enterprise, being able to compete locally, nationally and abroad, creating wealth and contributing to your community is what millions of Britons in business are doing – what could be more Labour than that?
Oldthinkers unbellyfeel Ingsoc
Some may say that if we are the bosses then we will curtail the large non – performance led rewards that key Director and CEO of multinational acquire on the backs of middle and junior managers and employees. The stifling effect of multinational dominance in markets curtail the growth and enterprise of small and medium businesses. The old characterisation of bosses can be accurately passed to Directors, Fund – holders, Bankers, Insurance companies and CEOs and the coterie of followers gaining rewards for failure.
This article, worthy in its way, emphasises something of secondary importance in what matters in winning an election.
Above all, Labour needs to be pro people, in particular, those entitled to vote and their dependants. Labour needs to cherish people, make them feel good, give them opportunities and so on, listen to them and act on what it hears. This is quite a different matter to tossing them the odd tax credit (or, even, busting the collective gut to get GDP up or the deficit down).
It is only by changing the present attitude completely round will Labour get anywhere. Pro people will spell out that business is the servant of the people and not an instrument to push them around and take their money off them. Yes, we want business to succeed, but that will come in good measure if it serves the people.
Pro people also means considering more than just “hard-working families”. It means considering savers, shareholders, property owners, renters, and even those who cannot or will not submit to the many unscrupulous employers out there.
How Labour party leadership can fail to promote “business” – and the positive and progressive attitude it brings to the UK – is an extraordinary misunderstanding of how such attitudes and focus can be the pillar upon which lives can be turned around. Simply put, without business, there are NO jobs!!!
Thus, Labour leadership and team members have ALL been out of step on this one – and many other issues confronting a market that remains in need of change, development of innovative & productive policies and people’s standard of living.
Labour leadership needs to be Bold and innovative in its engagement and delivery of new and refreshing empowerment tools for the British people. So that the big-thinkers and goal-orientated amongst us can feel empowered by support… as well as policies to back it up.
Let us not be fooled into believing that people who may be challenged right now don’t want to achieve goals – whether it be in employment & careers or business start-up.
Leadership needs to understand this fundamental balance between “caring” for vulnerabilities and taking a “dynamic and progressive” stance towards those who are able and desperately want to reinvent themselves…. and achieve goals.
When I asked on this site a few months ago whether there was a Labour MP who was linked to the Federation of Small Business I was rewarded with a load of bitching from Progress which implied that the FSB was beneath them. As a very rough estimate I would suggest that about 25% of my local “branch” are Labour voters whilst at the hustings event during the last election the Conservative and UKIP candidates managed to “lose” 15% of their vote as soon as they opened their mouths. Wouldn’t it be a good idea to come up with some constructive suggestions as to how to help people rather than solicit suggestions how to appear to be pro-business.
I thought Corbyn WAS pro-business? I just thought that he meant that the wealth creators, you know, us employees, investors and customers, shouldn’t be doormats.
Stuart Hudson has not got the balance right as the danger of his approach is we end up toadying up to big business such as banks and multi-national corporations who are hurting our economy by undermining workers rights, paying poverty wages and indifferent to the environment and the future of the country. We cannot turn a blind eye to corporate greed. What hurt us is that Miliband had no agenda for any business however, his attack on corporate greed did resonate.
Equally Stuart is wrong about immigration. I can see in my Ward, a Labour Ward since 1986, the problems caused by high immigration of EU migrants prepared to work long hours for peanuts and not complain about bad housing conditions. These issues are hurting our core vote and not developing tougher laws to deal with these issues and investing in community engagement will hurt us in 2020 and in the future.
After all Stuart, your man, Gordon Brown chased after approval from Paul Dacre. He cared more about that than whether the Party were happy with him which proves when you go for the wrong type of approval the whole movement suffers.