Another day, another thread from Twitter:
In an interview with the Financial Times Shadow Chancellor Rachel Reeves MP has pledged that a government led by Sir Keir Starmer would be proudly “pro-business”. But what does that actually mean? A thread....
A party on the left saying that it wants to be “pro-business” always raises suspicions. The obvious suggestion implicit in the claim is that at its core the party in question is not pro-business, or has not been, or is at the very least seeking to change perception.
Reeves claim is as far as I can see admission of all those things. The reporting I have seen suggests that Reeves is contrasting her position with that of the Corbyn team. The suggestion is that they were not pro-business and that she will provide a contrast.
What is much more surprising is that the framing is not anti-Tory, as it's being reported. Johnson famously said “fuck business”. The Tory record on business has been dire, from Brexit to tax administration reform onwards, but Reeves does not focus on it.
Instead Reeves aligns with the Tories and Corbyn on what is by far the biggest issue of concern to every person in business, which is Brexit. She made clear Labour is opposed to rejoining the EU, aligning with the single market or allowing free movement of people.
It's my suggestion that given how dire the Brexit experience is now proving to be, and how much it is regretted in the country at large now, this is the single most important barometer of being pro-business now.
Business wants the enormous admin costs of Brexit reduced. It also wants the barriers to trade that it creates removed. And it wishes to recruit the best people for any job that it can. Unless Labour can say it will address these issues no one will see it as pro-business.
Reeves does not suggest how she will align rules with the single market to permit trade flows, let alone address the other issues, so at the first hurdle this pro-business policy fails.
What else is missing? Since little else was said on this theme, with the discussion focussing on fiscal rules and tax instead, let me suggest what I think business really wants to hear from Labour, Brexit apart.
For most businesses the issues are regulation, the cost of borrowing and taxation costs, assuming Brexit is resolved, which is fundamental to resolving the first of these for big business.
For smaller business the biggest regulatory imposition is the demand still on the table from HMRC that they submit quarterly accounting to HMRC under the Making Tax Digital programme. There is a straightforward response to this that Labour must supply. They must scrap it.
Making Tax Digital is a massive admin burden. It presumes that small businesses are run to pay tax, and not that tax is a consequence of successfully running a business. And there is no proven gain so far to HMRC, including any evidence that compliance rates improve.
Like so many government IT programmes Making Tax Digital is a solution seeking a problem where it can offer no beneficial outcome. There are better solutions to the problem of small business tax non-compliance.
First, to be business-friendly Labour must invest in HMRC. Business wants its tax dealt with quickly and efficiently. It is not right now, and that has nothing to do with Covid. It has to do with too few staff who are under-trained by penny-pinching management to do their jobs.
Second, HMRC must be even-handed. So, every single limited company in the UK must be treated in the same way to create a level playing field on which all businesses compete. That means all must be asked to do tax returns when only half are now.
This happens because HMRC accept assurances from the rest that that are not trading. My response to that is “pull the other one”. We know about 10% of VAT due in the UK each year is not paid. Much of it is due by these supposedly dormant companies.
So, we must tackle this fraud, and honest businesses want that. Tackling the fraudsters and being easier on those who try to comply and make honest mistakes is a pro-business policy. It is easy to deliver.
You make companies harder to buy. You require that proof of who owns and manages companies be filed every year. Right now owning a company in the UK can be like licensed identity theft. That has to end.
Then require that accountants, lawyers and bankers confirm to HMRC which companies they have acted for each year, and who they think owns them. They have to keep records on this. Sharing them with HMRC would make financial crime a lot harder, and root out the rotten advisers.
In addition, make banks report the amount they banked for each company that they act for each year. They have this data, and the systems to report it for overseas-owned companies. Do it for UK companies and the ones trading fraudulently and not declaring it would be found.
We would get more tax. Honest business would not be undermined by cheats. And if directors were personally liable for fraud then more money might be collected. Forget punishing honest business with Making Tax Digital. Do this instead.
There are two other taxes to address. One is business rates. Sort it! And make it fair. Second, there is employer's national insurance. It is absurd that business is penalised for employing people. An active search for alternatives is required, but that is another thread.
The next issue is the cost of borrowing. Business is in record debt because of Covid. They want to know the cost of borrowing will be kept low. Labour can do that by committing to using quantitative easing to achieve this goal. It should say so, now. That provides certainty.
What else matters? The N word, of course. This is where, I suspect, the clear blue water with Corbyn is being drawn. No nationalisation is in the agenda. My response is to say that's got nothing to do with a pro-business policy.
When nationalisation is needed now it will be about business failure. Train privatisation has failed. We all know water is failing. So too is energy privatisation. As is the private sector in schools and the NHS, and elsewhere.
Being pro-business is about helping genuine commercial enterprises meet public demand. It is not about supporting quasi-monopolies extract reward from consumers by failing at excessive cost using crumbling infrastructure as dividends are prioritised over investment.
Just because something is run by a private company does not make it a valuable business. Sometimes it is just exploitation. To be pro-business Labour has to spot the difference. And, when essential services that have been privatised are failing people want a government to step in.
This is important. Labour cannot just be pro-business. It has to be pro-consumer and pro-electorate too.
It has to provide honest businesses with clear rules that minimise cost and the risk of penalties. It has to focus penalties, especially, on those who deliberately cheat, so it has to find them. And it has to keep markets open, which means being open to Europe.
Couple that with certainty on interest rates and by providing underpinning for the essential services like water, energy and transport on which business also relies and you have a pro-business, light regulation, fair tax agenda.
That's what I want to hear from Labour. I suspect that is what many in business would like too.
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In my view, Labour operates purely on soundbites. I wonder where they learnt that from?
What is needed is concrete plans rather than waffle, based on a forensic analysis of the three planning questions:
Where are we?
Where do we want to be (and when)?
How are we going to get there?
…and that is the problem, soundbites have worked for the Tories. It seems that serious plans are just there to be shot down and/or mocked.
We DO need serious plans from Labour but the reality is that they don’t need to be in the foreground.
The slogans “Rebuild the NHS” and “Fairness and respect” are probably all that is needed on the campaign trail…. but I do accept that this needs to be backed by policies.
I fear that the plans are not there at all. At a recent local grilling of Labour party members, I asked what the SPECIFIC policies were for primary care (95% of contact with the NHS) and social care. None were forthcoming.
Wet, weak and wittering were my conclusions.
Labour just don’t seem remotely confident or open minded enough to look at any of these ideas. Same as their unwillingness to look at public spending options outside the ‘taxpayers money ‘ mantra. It’s all along with their refusal to understand the kind of fight they are in – for the future of democracy itself – timidly accepting to fight on the ground the govt have defined.
Quite right. Labour is being poorly led by Starmer, who lacks any sense of purpose and is clinging onto the advice of his advisors. He cannot mention the B-word, because he’s boxed himself in by rejecting any major reforms such as SM or CU. As you say, he also seems oblivious to the dismantling of democracy going on around him – or he doesn’t care – and is happy to ignore controversy. He has a 10pt lead but because he has done nothing to project Labour as a viable alternative, it could vanish as quickly as it came.
I have pointed out via numerous channels that on the Labour website, the link to “Labour Business” on the page https://labour.org.uk/people/societies/ (and the only thing I can find that references any kind of business interest group within the party) is broken and has been for a long time. It points to http://www.lfig.org/ – which appears to stand for Labour Finance and Industry Group. This apparently has been rebranded to “Labour Business” which does have a site at https://labourbusiness.org/ – but no-one has bothered to a) check the site regularly for broken links, or b) respond to messages via email and otherwise reporting the problem.
So I guess the party has a long long way to go.
Labour is heading in the right direction. It has to sideline the hard left and completely disassociate itself with Corbyn to win the centre ground voter – which ultimately determines who forms a Government.
The “centre ground” mostly want: (i.e. polls find that these are what 60%++ of people want – which I guess would be “middle of the road”)
Privatisation of the NHS reversed & NHS funded at a level that is fit for purpose
Nationalisation of energy networks
Nationalisation of Rail
Nationalisation of water & sewage (& clean rivers)
More funds to local government
More funds to state education
Many of these points do not feature in Liebore policy (or thought). All these points (or elements thereof) were contained in Labour mainfestos under Corbyn. Far from Liebore being middle of the road, I’d suggest that they are turning into a less extreme version of toryscum. As for Reeves, I agree with Pilgrim.
No one is serving these people
Which is staggering…
Yes ,Starmer is heading in the ‘right direction’ ! The labour left must embrace M.M.T to ensure any policy and manifesto will benefit all voters.
Is it not a category error to refer to Labour as a “party on the left”?
They can’t really be characterized as such (ignoring the Corbyn wilderness tenure which achieved little and ignited internecine warfare) since becoming ‘New Labour’. Left of the Tories? Of course. That’s not particularly hard though.
Labour’s leadership has decided that it must be centrist to the point of having the fence firmly and immutably wedged in the proverbial. It wants to appease the right-wing newspaper proprietors (e.g. Starmer writing a piece for The S*n, which was inflammatory – to say the least – to a lot of traditional Labour supporters) whilst also hitching its wagon to navel-gazing identity politics, which plays into the hands of the nationalist, myopic, “us versus others” Middle England.
See below this political own goal of a stance (Apologies that it’s a G(hastly)B(ollocks) News submission):
https://www.youtube.com/watch?v=nYujgQogxvg
We have a generation coming through who have complex feelings about themselves and what defines them. That’s fine. But it’s going to take older generations time to come to terms with, and comprehend this. However, the pursuit of disparate, identity politics is a symptom of an atomized, hyperindividualized (non-)society; the Thatcherite’s wet dream. Divide and rule performed by the underclasses on themselves.
While chasing their own tails, these groups cannot or will not find the solidarity needed to fight in the wider class struggle which still exists, and worsens by the day.
The trade unions are openly withdrawing support and, crucially, funding. Bizarrely, they have also shot down PR, which is the only hope for them and their cause at this stage.
And Starmer is ignoring the fact that Labour is up the creek without a paddle if it has, as appears to be the case, lost Scotland for good.
‘Bleak’ is an understatement.
Rachael Reeves is vacuous as far as I am concerned – she’s the epitome of reactionary conservativism in the Labour party – trying to too hard to look too different from John McD.
But you are right Richard – the country can ill afford such timidity. Last night on R4 even one Tory MP was talking about a possible split over Boris mentioning that there was a part of the Tory party who see sense in re-joining Europe. Boris’ latest insult is just causing some in the Tory party to revisit this issue – the latest in a long line of lies and deceits – and fault lines in the party – that signifies that the Tories have actually been taken over by extremists.
And Labour? Well , they seem to have been taken over by pacifists.
I’ve just read the Wiki page on the political positions of Corbyn. There’s nothing there that I would consider remotely hard left. And nothing much I would disagree with. His positions sound a bit like socialism to me, returning, in principle, to pre-Thatcher days when utilities were publicly owned, tax rates were highish on high earners and business, Councils were still building houses, were still in charge of education, the NHS wasn’t privatised, unions weren’t emasculated by repressive legislation etc. if these are hard left principles then count me in.
So much damage has been done by the Tories since 2010 and there’s probably worse to come (as in yesterday’s blog). I see no desire from the current Labour Party to address much of this. And I think we’re stuck with Johnson’s Brexit disaster. or does Starmer have a plan for renegotiation?
I am very impressed by both Richard’s elaborated response to Reeves sloganeering and by the universal contempt expressed by contributors. I have followed fairly closely public statements on a range of unrelated issues by the shadow front bench and the common theme is slogans unaccompanied by specific policy proposals. This in coordinated by presumably Starmer personally, given the small number involved, although the discipline required is made simple by the mediocrity of the personnel, untrammelled by commitment to any obvious guiding principles. We are dealing here with fully paid up members of the ‘political class’, by which I mean those people choosing politics as a career by selecting that Party offering them as individuals the perceived best opportunities at the time of their decision. This is how you end up with Blairs, Starmers and Reeves. Expect no consistency of ideals or policy. Expect only vacuous opportunism. Labour only wants power on the basis of despair about individuals, not on a programme of reform.
How does a political party get it’s policies?
Are they dreamed up by the leadership or do it’s members have any say? From 2015 Labour tried to move to the latter not the former and quite a few of it’s policies in both 2017 and 2019 were on our New Year resolution list. Including Nationalisation. All were Jettisoned and blamed for why the Tories got a majority of 80 off 29% of the vote. But the effects of Brexit and the crises in energy and water with the harm it will do on real lives in real terms will generate ‘soundbites’ from the media itself. No policy. No response.
There’s an aspect of Corbyn which rather gets swept under the carpet but which I suspect massively undermined a set of policies, most of which I’m sure would have had strong public support. Indeed Johnson’s Conservatives have stolen some of them!
Corbyn spent his life being deeply hostile to the West, the EU and to the UK. Partly why his lukewarm support for Remain convinced very few. Of course he was right on some issues (I was on the Iraq march) but at the same time he was conspicuously silent on activities by Russia and other brutal, authoritarian states. Defending Putin over the Skripals. Silence over Russian bombing of Syria and support for Assad whilst condemning NATO or US support for the Kurds in Northern Syria. His close friends at Stop the War now saying its all the West’s fault that the Russians have lined up 100,000+ troops on the border of Ukraine ready to invade. Add Georgia, Chechnya, Armenia/Azerbajan, MH17 et al. Western imperialism bad, Russian imperialism just fine. And the Soviet empire was just that – an empire – in terms of the brutal hegemonic control it exerted over its ‘colonies’. Go to the Baltic states or Poland and ask how they feel about Russian occupation.
When one is so consistently critical of one side and silent about the other, then its about ideology and not a genuine concern for humanity and democracy. I don’t think this has escaped the British public who saw him as deeply anti-patriotic – and I mean that in the positive sense rather than the nationalism that is all too current. It tarnished Labour with an anti-British brush and goes some way to explain the loathing that he inspired in many. I experienced it on the door-step. At the same time, people I know well who know him personally and as a local MP, would say he is basically a decent man and a good constituency MP. However, he has taken on board some ideological views and a hostility to the West and UK that have offended many.
Starmer has a tricky job to do, to steer a line between the flag waving nationalists who probably belong on the right and people who are just pro-British and maybe pro the West in general, if not uncritically. Over time I suspect many of those policies from previous manifestos will come back in but he has to avoid ‘frightening the horses’. On macroeconomics the party has to be much more radical (along the lines often covered here) if it is to do all that is needed. Rebuilding public services and tackling climate change for starters. Taking on the economic and financial establishment is a whole different challenge. It will become easier as he sheds historic baggage.
… ducks behind sofa…
I think your characterisation is too crude. I absolutely do not support Putin, but Corbyn did not support Russia over the Skipals- he just said that more evidence was needed. There are still some significant oddities in the whole affair.
Russia in the past has been invaded several times and had horrific wars as a consequence. This doesn’t excuse Putin’s appalling behaviour in Chechnya, Armenia/Azerbajan etc. but perhaps it does help to understand why they are paranoid about the idea of a NATO country being on their immediate border.
I don’t profess to remember all of Corbyn’s statements, but he is and was anti war, so I am sure he did not condone Russia’s bombing of Syria. Meanwhile we and others in the West and most especially America feel it perfectly acceptable to interfere in untold number of conflicts and at the very least supply the weapons. I suggest that is what we should be focusing on as in theory we could influence what is done in our name by our Government, even if a lot of it is kept fairly well hidden from jo public.
It means “electable” – nothing more, nothing less
Johnson was electable.
Perhaps folk need reminding about the 50s and 60s? And it wasn’t just in the UK but across the US, Germany, France etc. I was born in 1962 but I remember in the early 1970s there was a new motorway opening practically every month, rail electrification reached Glasgow, 100,000 council houses built every year, the CEGB (central electricity generating board (which was just England)) on a massive power station building program that actually kept us going until a few years ago, the New Towns programme, the regional development programme, the Office Decentralisation Board (to move things out of London), and of course the top rate of Income Tax was 90%. Nobody left or refused to work. For the young free Uni and grants for living costs for those that could not afford it.
I wonder if the aging society means we have all just got very selfish? Not me personally I hope as I still only manage to pay myself less than median wages while donating to all sorts of Indy Scotland causes (says he virtue signalling furiously).
I really think nobody has a clue as to what a ‘hard left’ policy is. To my mind ‘hard left’ is Rees Mogg admiring the view from the top of the nearest lamp post while his tax payer £6m restored Georgian mansion is reduced to a smoking pyre. Nobody is suggesting that. In what way could anyone characterise nationalising an entirely failed rail system, for example, as ‘hard left’? It failed before many times hence the ‘Groupings’ of 1922 and then the nationalisation of the clapped out remnants in 1947. In the UK context ‘nationalising’ was generally the state taking over whatever the private sector had given up on as not worth the effort.
Any idiot that uses the term “pro-business”, never has small business in mind.
That would certainly seem to be true in this case
Its always just a euphemism that really means pro-corporate.
I am bemused as to why you permitted a diatribe against Corbyn’s alleged failure to sing a Western song over a list of historical foreign affairs issues on this website, all of which were far more complex and nuanced than the soundbites suggest. I question both motive and relevance. My only surprise was not to include the anti Semitic stuff. I think the political aspects of discussion on this site have been largely relevant and without rancour. It would be good to keep that.
Sometimes I have to moderate in a hurry and make mistakes
Sorry
Sanity. If only. It’s so obvious.
Labour had actual policies in 2017 & 2019, now Labour has none – just mood music.
That is too simplistic
We do not live in a binary world
And what about Labour’s “Fiscal Rules”. Neoclassical neoliberal nonsense I think , yes?
Yes
Completely, and they still seem absurdly dedicated to them