As we get closer to the next general election, it is clear that the battleground is going to be our post-pandemic economy and living standards. Although the Conservatives have repeatedly shown their incompetence in running the economy, various polls in recent weeks have shown that Labour still has a lot of work to do.
Keir Starmer’s essay The Road Ahead was rightly focused on the need for Labour to reset its relationship with business. The same ambition was seen at Labour’s conference in Brighton, where Rachel Reeves announced that the party would scrap and replace business rates. Labour chose this topic for its opposition day debate in the House of Commons on Tuesday.
Business should be a force for good in society, and many businesses feel let down by a government that rarely thinks about the practical consequences of its policies. Under Keir, we need to give business confidence that Labour ‘has its back’. But while resetting the relationship with business is right, Labour needs to be clear with voters about what that relationship will be and how it will work.
The easiest way to explain this to people is that we need to move away from government as a ‘supporter’ of business to an economic ‘coach’. Keir is a big football fan, like myself. And like millions of voters around the country who follow our national game (or any team sport), we know that the key to success is getting every part of the team to work together, to become greater than the sum of its parts.
Under successive Conservative leaders, we have relegated government to the stands, simply watching on as productivity and investment fell and living standards suffered. Ministers thought that simply cheering from the sidelines, saying that they will “back business”, would be enough to attain success. What we need is a government prepared to coach our economy to success.
Under Keir, Labour recognises that the state cannot put the ball into the back of the net itself, a mistake that we have made previously. We need the millions of British businesses to hire, invest and innovate over the coming years if we are going to create an economy which can provide good jobs and pay for decent public services. The public understand this intuitively. Labour must show that we understand this, too.
Although we have a lot of talented entrepreneurs and workers in this country, we are not getting the best out of them. For too long, we’ve had governments unwilling to be honest about the strengths and weaknesses of our economy. Even worse, when confronted with problems the Tories have turned to unfunded tax cuts or promises to ‘deregulate’. This approach is a bit like seeing a striker failing to score but rather than working with them to practice their shooting, you give them the week off and ask the match official if you can make the goal bigger for the next game.
Labour has got to show that we have a different approach. Like the best coaches, we are going to challenge businesses to do better, not make excuses. We are going to have high expectations because it is only in trying to achieve those high expectations that we will see the investment in people, capital and ideas needed for Britain to retain its place as one of the world’s largest economies.
To get the country match fit, we are going to throw out old-fashioned practices and embrace the latest training and tactics. This means stopping tax cuts for nothing and linking taxes to how much a business invests in people, places and tackling the climate emergency. It means using public procurement to set ever higher standards for environmental and social impact, creating a training pitch where we can pilot the best ways to run businesses that balance profit and purpose.
It means changing company law, ensuring that every business needs to set itself the goal of finding profitable ways to serve society and protect the planet. It means working with investors to channel the hundreds of billions of ESG (environmental, social and governance) funds from across the world into Britain. It also means bringing new players onto the pitch, such as employee-owned businesses and social enterprises, which made promising debuts but have been stuck on the subs bench for years.
Our current Prime Minister just wants to be a cheerleader, waving his pom-poms in the air, shouting encouraging words. It isn’t working and is never going to work. Labour needs to show that it has what it takes to be the Alex Ferguson, Arsène Wenger or Pep Guardiola that our economy desperately needs. A leader with a clear philosophy and a plan for how to get the best out of business. We have made a start, and Keir has given the impression that there is more to come. The next few months must be about fleshing out the policies that can get British business back on the road to winning.