Labour’s “anti-business” storm disguises how much control business already has over the party

If you want to know what the highest circle of any political party is thinking, ignore the press releases and the ‘public debate’ and listen to the stakeholders.

March 16. 2015

submit to reddit

Labour’s “anti-business” storm disguises how much control business already has over the party

If you want to know what the highest circle of any political party is thinking, ignore the press releases and the ‘public debate’ and listen to the stakeholders.

Labour’s current trouble with public accusations of “anti-business” posturing is not so much about standing up to their enemies as standing up to their friends. The problem for ‘Red Ed’ Miliband, the man who won the Labour leadership by wooing the unions, is that he can’t face this rising tide of McCarthyite sewage without upsetting the financiers and tycoons that he’s spent the past four years getting into bed with.

The CEO of Boots started it off when the Telegraph interviewed him for his views on Miliband. With the Telegraph’s famous irreverence towards the rich and powerful, they began the article by reminding readers that Boots boss Stefano Pessina is “worth £7.5 billion” and is “one of the country’s largest private sector employers”, managing to refer to his personal fortune and the number of people working for him only three or four more times throughout the article.

Pessina’s argument, essentially that Labour’s recent rhetoric about the social responsibility of big business is “not helpful” for the UK’s economy, reflects the standard argument of powerful men (for it is almost always men) like him that business is already doing society a huge favour by being ‘wealth creators’. Miliband has made several speeches since 2010 warning against “predatory” capitalists, and recently stated that “there is nothing pro-business about defending tax avoidance.”

The Telegraph’s courageous investigators couldn’t find space in their article to mention the fact that Pessina is domiciled in Monaco to avoid paying tax, or that his company employs several thousand people on zero hours contracts, but Pessina is technically right: wealth is surely being created by these British jobs. The fact that it is being siphoned to Monaco rather than to taxpayer it is owed or the precarious workers who produce the value in the first place is apparently irrelevant.

Miliband’s week-long media battle against Pessina and his Conservative allies, in which he argued that “I don’t think people in Britain are going to take kindly to being lectured by someone who’s avoiding his taxes on how they should be voting in the UK general election”, showed that he had found some good high ground for the election campaign. At the same time he pledged to close tax loopholes with crown dependencies such as Bermuda, and linked Pessina’s “unholy alliance” with the Conservatives to the issue of tax evasion. It paid off in the form of a two point poll bounce the following weekend.

But outside of this exchange of bruising rhetoric, some of Labour’s more recent campaign donors – the less traditional ones – have been making similar complaints about Miliband’s “anti-business” agenda, and here the stupid tragedy is that Labour is being constricted by a straitjacket entirely of its own making.

Lord Haskins, who has made significant past donations to both Labour and the Liberal Democrats, told interviewers that politicians had to reach “an accommodation with business”, that it was not sensible for the Labour Party to “go out after the business community” and that Miliband’s proposals for an energy price freeze and a tax on homes worth more than £2 million were “nonsense” policies. Haskins was a Labour donor and “curse of the farming community” who served as a special advisor to Tony Blair’s rural policy, an appointment he received a decade before selling his company Northern Foods for over £300 million.

Another Blairite donor, Lord Paul of Marylebone, also expressed “shock” at the row between Labour and business interests, and suggested that Labour’s recent language – for instance referring to some capitalist firms as ‘predatory’ – was not part of the “real [work] of trying to win votes on your merit.”

Labour’s capitulation to business interests has been a long process of ideological erosion over the past thirty years, and Miliband has been less than idle in contributing to this. Goaded by a coordinated attack by the right wing media into reforming party funding in 2013, Miliband cut Labour’s union ties from the party constitution, an act which led to the UK’s second largest trade union, GMB, to withdraw £1.5 million of Labour funding (90% of its contribution).

Unite, the largest union, also cut its donation in half, withdrawing another £1.5 million amidst a backdrop of policy disagreements with the party leadership. The RMT union had already left the Labour party during Blair’s government, accusing New Labour of “betraying workers”

Immediately following Miliband’s party funding own-goal, Tony Blair, who now takes millions a year in ‘advisory work’ from a grateful Wall Street in return for the financial deregulation he oversaw as Prime Minister, immediately congratulated Miliband and publicly announced that he would make a “big donation” to Labour as a result. At the same time, Lord Levy, a heavyweight Blairite peer, told Miliband that there is no shame in approaching private interests to pay for “something you believe in”.

Ed Miliband’s problem is not that he is being shouted down by an ideological enemy – that is the kind of opposition that he thrives on, gives him a good underdog pose. He is instead being reminded by the paymasters he invited to the party that he was already on their side when he went into politics.

The supposedly ‘radical’ swing to the left of Miliband’s Labour begs some questioning. The best example: when he offered voters a price freeze on energy bills – a popular policy morsel, it turned out – David Cameron accused him in a session of Prime Minister’s Questions of wanting to “live in some sort of Marxist universe where you can control [energy prices]”. The unfortunate souls who didn’t read much at Eton and don’t know how to use Wikipedia might have a slightly skewed idea of the implications of Marxism. Workers of the world unite, you have nothing to lose but two quid a month off your gas bill! Renationalisation was not even on the table.

More worrying is Labour’s almost totally unconditional support for the Transatlantic Trade and Investment Partnership (TTIP). The secretive trade deal between the EU and USA would give corporations the power to sue democratic governments for billions of dollars for ‘threatening future profits’ in unaccountable offshore courts, and which would drive down wages and destroy hundreds of thousands of small businesses.

Labour’s position on the TTIP, which appears to already be bending the knee to Wall Street, is simply to bargain for an exemption of privatisation of the NHS. All other related abuses – the privatisation of any other services, the disastrous environmental impact, the overruling of democracy, the removal of worker protections and the destruction of food safety, are, in Labour’s book, perfectly acceptable.

On the note of their NHS exception, it is worth highlighting the mismanagement of healthcare in the name of corporate and private interests that has already been carried out by Labour. Tony Blair’s government did plenty of work handing the NHS over to private interests, with their disastrous PFI investments that cost the taxpayer billions in unmoveable and overpriced debt obligations to the financial sector.

Meanwhile Labour’s electioneering ‘save the NHS’ posture masks the fact that their current shadow Health Secretary, Andy Burnham, personally profits as a consultant to private healthcare interests, for instance PriceWaterhouseCooper to whom he promised “strong opportunities for growth”. Burnham also sits on the strategic advisory board for WellDoc and has over a decade-long relationship with the USA’s less than exemplary healthcare sector.

Both Labour and the Conservatives benefit from the ‘anti-business’ argument.  The Tories get to set the agenda so that Labour has to respond rather than lead the conversation; and Labour gets to pretend it still has a megaphone and a barricade to shout from, without all the effort of challenging the Establishment in a meaningful way.

Labour’s historical roots as the political wing of a mass movement of workers, representing millions of union members, has slipped to the point where the institutions on which the party was founded are deserting it en masse. The modern Labour party now owes not just its campaign cash but its intellectual core to the class of people responsible for the financial crisis – we now know that Tony Blair ended up donating £106,000 to support candidates in the most important swing seats, and we already knew both what he thinks and where his money comes from.  When the party leadership tells you that a vote for them is a vote against big business, they’re hoping you won’t ask too much about just how interested the party’s vested interests are.

March 16. 2015