Why Labour must be a “frank friend” to big business

A new poll today shows that most Britons believe our next government should toughen up its stance towards big business. The poll, conducted by Populus for the Financial Times, offers Labour reassurance that its instincts to fight for the consumer, and to speak out on executive pay, chime with voters across the political spectrum.

According to the FT, 60% said they liked parties to campaign to change the way big business operates – including 52% of Tories, 63% of LibDems, 67% of UKIP voters and 72% of Labour.

This survey should steel the party to be confident in the way it handles its relationship with big business – after decades of struggling with the issue.

As a party we should be a ‘frank friend’ to big business – a trusted counterparty who backs business when it works with society, and which has the courage to intervene when business works against society. We also need to offer something the Tories seem hell-bent on undermining – and that is certainty.

Ed Miliband and Ed Balls have proven their credentials of the critical side – and should carry on. It’s economically rational to crack down on excess executive pay when companies fail to deliver and shareholders/pensioners get little or nothing. Banking in the period 1995-2008 made an elite workforce very rich but did little or nothing for the masses of pension holders expecting a return on their investment.

It should fight against excessive profit taking by powerful companies against the weak – as we see in payday lending. It should ask question about possible pricing abuses in the power sector and question whether trains companies can ever really compete.

Labour’s heart and values lie in maximising the opportunities of those with less so they can compete with those who have more. Labour should support small business ahead of big business. We need more big businesses to deal fairly with small suppliers – to avoid overburdening them with bureaucracy, to pay on time and to trade at long-term sustainable prices.

But we need, as party, to get better at articulating our support to the many business that help our economy and society. Because every day business creates jobs and financial security and it innovates. Where British businesses cannot or will not do these things, others will fill the void.

We also need to recognise that making a profit can actually be a good thing. The question is not necessarily the profit itself but what a company will do with it. Labour should applaud companies that reinvest profits in jobs and innovation. It should recognise the value of dividends paid from their profits into pension funds that will help pay for our retirements.

Being clearer about our stance towards big business will make us more confident in taking the fight to the Tories. Because the idea that this government is business friendly, or even business literate, is open to question.

Holding an in-out EU referendum three years away is about the most business-hostile policy imaginable. The election itself breeds uncertainty – which big business despises. Further more the prospect of leaving the EU will not reduce admin costs – it will increase them. And we all know how business hates more red tape.

A third thing business cannot abhor is nasty surprises. The insurance industry received no notice of Osborne’s policy to abolish the need for annuities.

Actions like those show that the government is out of touch with the needs of big business. And Osborne and Cameron certainly don’t get the day-to-day issues that managers of small business, still without adequate access to finance 6 years after the credit crunch, are facing.

Labour voices should dispel the myth that Tories are naturally the party that supports and understands business. Because the evidence of recent policies suggests otherwise.

Jeremy Adams is a communication consultant to large and small businesses and a committee member of Labour in the City