Why is Labour not using the business community against the Tories?

20th November, 2012 9:48 am

There are three key areas where Labour should be making common cause with British businesses against this government. If done effectively, they could undermine David Cameron’s central narrative that he knows what is best for Britain over Ed Miliband.

Broadly speaking, British businesses are opposed to Cameron’s highly restrictive and bungling immigration policies; they want a sustainable energy policy that also deals with climate change by investing in renewable energy; they fear Britain’s exit from the EU would hurt their prospects.

Each of these areas has huge implications for job creation, national infrastructure and energy, and economic growth. Businesses are increasingly frustrated that this government is putting narrow ideology over jobs and growth.

The financial press is full of scorn and ridicule. In October The Economist called immigration the Tories’ barmiest policy and told Cameron to “wake up”. The Financial Times has similarly railed against restrictive immigration policies and pointed out how they’re harming growth.

On the environment too there is similar anguish. In opposition Cameron told the press: “I want to make my position on this absolutely clear. We are not going to drop the environmental agenda in an economic downturn.” Yet that is precisely what Cameron has done, lamented The Economist.

‘Go green or we quit Britain’, splashed the front page of The Times in October. Today, 21 major investors controlling over $21 trillion of assets tell George Osborne to take climate change seriously. Business leaders in the United States have also been saying the same to President Obama. The Economist too has lamented Cameron abandoning his promises before the election on green energy.

The same applies to Europe. Yesterday’s speech by Ed Miliband to the CBI on the EU was warmly received because they almost entirely agree with them. Business leaders are now getting agitated over the EU-exit talk too.

In each case Labour’s approach is sensible, driven by evidence and morally right. Conservative policy in contrast is muddled, hinders our economy and driven by narrow ideology. It illustrates Cameron in his true nature: a man who has broken promises and put British jobs and economic security at risk because he is too weak to face down rebellious backbenchers.

And yet… something is missing. Despite the cacophony of anguish amongst British businesses, it doesn’t feel like Labour is taking full advantage of these opportunities. Ed Miliband has belatedly made a speech about the EU and the economy, and has said little about the energy bill and restrictive immigration policies.

Don’t get me wrong: there has been a constant barrage of press releases from shadow ministers on these areas. But they are not breaking through. It doesn’t look like the party is leading the charge and constantly hammering the government over them.

Criticisms of the government, such as those mentioned above, feel very sporadic and ad hoc. Plus, the Libdems always manage to place themselves firmly against the Tories on these issues without doing any heavy lifting in practice. They have been out-manoeuvred and pushed aside every step of the way without consequence.

It’s time for Labour to lead the charge more strongly on these issues, and work with businesses to drive them forward. It would not only benefit the country but also help Labour’s agenda immensely.

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  • “British businesses fear Britain’s exit from the EU would hurt their prospects.”

    To be fair it is really only big businesses who are pro-EU. The SME sector is largely opposed (in the same way as the general population).

    The CBI and FTSE100 CEOs have always been pro-EU and they are probably the only group in the UK that would still consider joining the Euro.

    Basically the raft of EU legislation on maternity leave, dismissal etc that causes small businesses such a cost and a headache is of no consequence to the likes of Vodafone with its tens of thousands of staff to fill gaps and HR depts to do the paperwork.

    However FTSE100 CEOs with their still ridiculously large salaries (for poor performance) and questionable tax policies probably aren’t the people Labour want to be seen to be associated with at the moment.

  • Forlornehope

    The problem is quite simply credibility. Nobody would really believe in Ed Miliband mounting a white charger on behalf of business; it just won’t wash. Labour needs a straightforward message which should be that we will spend more on public services and benefits than the LibCons. We have to accept that we cannot do this by borrowing or just by taxing “the rich”; it means that people on and above media income will have to pay more tax. That choice needs to be put to the British people and until Labour starts putting it, everything else is just hot air.

  • David B

    The SME sector is terrified of the massive increase in borrowing required by the “Plan B” of Ed Balls. This will require the UK banks to lend money to the government, restricting further the borrowing to those SME’S and will ultimately lead to a rise in interest rates. This will restrict economic growth and force more of those SME’s out of business

    Ed is also playing a two faced game over the EU. Displaying his pro EU thinking to audiences who are already bought into that policy while playing games for political advantage when the public are watching. When he voted for a cut in the EU budget he gained political advantage by cornering Cameran into a policy he cannot deliver but raise public expectations. When this cannot be delivered the public will become more disenchanted with the EU and the calls for an in/out referendum will increase and the chances of an out voted will increase proportionately

  • AlanGiles

    Let’s be frank about it, members of the IoD, CBI etc are not natural supporters of Labour (though of course that chancer Digby Jones was tempted by the Tory-lite policies of Blair – at least for a time).

    At the moment thanks to the long-winded “policy review”, even Labour’s natural supporters and members don’t really have any firm idea of what the party would get up to back in power, so you can hardly expect conservative/Conservative businessmen to be too enthralled. Part of Labour’s current problem is that they try to be all things to all men.

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