The Bad, the Worse and the Ugly: Labour’s toxic relationship with business

Businesses back the Tories. This is obvious, so obvious that we rarely pause to consider whether it makes sense. But when you do think about it, Labour’s policy prospectus ought to be very attractive: Rate cuts for small businesses; higher, growth stimulating, government spending; less hostility to immigration; unequivocal support for Britain’s EU membership. In my view this adds up to a far better business offer than what is now being delivered by the Conservatives.

So it is worth looking at why the business community’s perception of Labour is overwhelmingly negative, especially for the large companies which drive the media narrative. Some of this is unavoidable (The Bad); and some is our fault, though difficult to change quickly (The Worse). Regrettably, there is also an element of simple incompetence (The Ugly).

The Bad

It would be easy to blame class solidarity. The executives of large companies are hardly representative of society, and like other members of the 1% they exhibit disproportionately Conservative views. That the people who would be paying the 50p top rate and the mansion tax object to their imposition is almost even less surprising than the Telegraph’s big-business-opposes-tax-on-big-business ‘story’.

A similar worldview will often pervade among less senior staff too. As a ‘big four’ professional, I rarely witness the office chat venture left of the newest of New Labour. Alternatively, observe the split between academic economists, who think austerity has been a horrendous failure; and those employed by financial institutions, who think it was essential.

The Worse

However, rather than bemoan the electorate’s ignorance, we should recognise the mistakes Labour has been making for years.

For a start, we don’t have nearly enough politicians with a business background, and we make no show of celebrating those who do. People tend to support parties that they see as representative of them (or ‘on their side’ in some broad sense) rather than examining manifestos and picking the policies they most like. The Conservatives are more than happy to tell businesses how appreciated they are, whereas many in our party treat wealth creation with contempt.

Jeremy Corbyn aside, the leadership candidates all accept the need to be seen as pro-business. Unfortunately, merely stating this aim will change little. Our innate suspicion of the profit motive has fostered an impression that whenever a choice needs to be made between business and anything the Labour Party actually cares about, business will always lose.

Even the four policies listed above have failed to dispel this concern, as only the rate cut is primarily associated with a commitment to successful businesses. In simple terms, when we trumpet our support for the EU people think ‘I suppose that policy will help my business’. When the Tories promise to cut corporation tax they think ‘of course, the Conservatives are still the party of enterprise’. Unfortunately there aren’t any obvious shortcuts. If we want to reset the image, we will need pro-business policies that aren’t just by-products of social-democratic principles.

The Ugly

Over the last five years problematic rhetoric went right to the top. Ed Miliband wanted to separate “predators and producers”, but no one seemed to know who the “predators” actually were. The effect was to make enemies of many businesses who should have had nothing to fear from a Labour government.

When we finally did decide which companies we disliked, our policy solutions were often similarly inadequate. For an example it is difficult to see past the energy price freeze. However well meaning, it was based on flawed analysis of profits; would have decreased competition and infrastructure investment; and probably lead to higher rather than lower energy bills – the exact opposite of its intention. Labour did move to remedy the latter problem, but having to revise the policy weeks before the election (and 18 months after it was first announced) only made us look more clueless.

Businesses are rarely delighted by new regulation, but they are considerably less enamoured when it’s driven by politicians (rather than an expert independent regulator) reacting to ill-informed public outcry. If our approach to the energy sector is seen as ‘shoot first and ask questions later’, how can other industries know the same won’t apply to them?

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I don’t offer any solutions here beyond the obvious: Adopt less antagonistic rhetoric; promote some business people; stop making incompetent policy… etc. Nor do I pretend that, even with the most business friendly policies, it would be easy for a Labour opposition to gain significant support. As well as their culturally Conservative leanings, businesses gravitate towards power. However, we should be wary of false dichotomies. Having a small amount of support is better than having none, and moderate criticism is better than the barrage of opposition we currently face.

It is also difficult to know just how useful business backing is in winning votes. But this is true of most things, and somehow these factors add up to decisive election results. Like it or not, a neoliberal consensus holds that what is good for big business is good for their workers and good for the economy as a whole. Given how far Labour is behind on this most important of metrics, we could use all the help we can get.

KBF

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