Is Labour missing a trick with the Boots row?

On Sunday Alliance Boots executive chairman Stefano Pessina attacked Labour’s economic plans, commenting that a Labour government would "not be helpful for business nor the country" and would be “a catastrophe”. In the main, Labour and the left have returned fire with a populist response focusing on the fact that the Italian-born Pessina is based in Monaco and does not pay tax in the UK (Alliance Boots itself is headquartered in Switzerland, another tax haven). Consequently, BBC News summarised Labour’s response as follows: “Ed Miliband says the Boots boss who warned that a Labour government would be a "catastrophe" should stop lecturing the UK and ‘pay his taxes’” (meanwhile, the Daily Mail has characteristically distorted the story, somehow painting Labour as an aggressor that voluntarily “went to war” with Boots). 

But to be honest, I feel Labour has missed a trick with this kind of response.

I’ll be clear here – I have every sympathy with Ed’s point about Pessina’s tax practices, as will as many as 85% of the public. It’s also observable that at a time when Labour faces an electoral imperative to hold on to would-be UKIP or Green voters who often see Labour and the Tories as being “the same”, Labour being viciously attacked by a Tory-leaning, tax-dodging foreign multi-billionaire has at least some political upside (from the perspective of battling the “#GreenSurge” in particular, it also conveniently coincides with the utter implosion of the citizens’ income policy and the increased scrutiny brought to bear on other parts of their barmy platform).

But here lies the missed opportunity – the crux of Pessina’s attack was that Labour was ‘anti-business’, but other than an attempt by Ed Balls to make hay of Pessina’s concerns (stated in the same interview) about the severe economic risk of Britain leaving the EU under the Tories, Labour thus-far seems to have passed up the chance to rebut Pessina’s allegations. The reason I find this mind-boggling is that I strongly believe that Labour’s current plans have plenty to offer Britain’s business community, and especially our SMEs. It’s not that Labour has nothing to say, so why not say it when challenged?

Why not point out that Labour is planning to cut business rates to the tune of more than £1bn, or that capping energy bills and reforming the market will help businesses too, since it isn’t just families who find themselves strained by excessive utility bills? Why not re-stress that as an alternative to the big high street banks that have failed to lend to Britain’s intrepid entrepreneurs, a Labour government would finally establish a British state investment bank, inspired by the US SBA or Germany’s regionalised Sparkassen? And why aren’t we shouting at the top of our lungs that Ed Miliband plans the biggest devolution of fiscal and transport powers in living memory to Britain’s city-regions, counties and national assemblies? It’s Labour that now gets that it is the local officials that have direct relationships with communities and businesspeople who will always be better placed to make the decisions that shape local economies, not Whitehall bureaucrats.

The financial markets also understandably fear increased borrowing and business leaders are calling on Labour to make fiscally responsible pledges of the kind we made in the run up to 1997 - UK Chamber of Shipping president Marcus Bowman referenced concerns about this today, piling on to Pessina’s attacks. But why didn’t Labour immediately point out that it’s doing precisely that already?

And then why not highlight that our soon-to-be small business minister Toby Perkins set up a sportswear business and helped run a social enterprise before he entered politics, and that Labour is striving to get even more prospective MPs from private sector backgrounds selected under the Future Candidates Programme? Shadow Business Secretary and former City lawyer Chuka Umunna has also championed American-inspired Small Business Saturday events since 2013. And when people try to claim that Ed has "abandoned" New Labour and its bold commitment to entrepreneurialism, why don’t we quote his very first conference speech right back at them (“Think of how [New Labour] challenged the impression that we taxed for its own sake and that we were hostile to business. We were right to change”, Ed said).

Labour could have pointed out all of this, and more, when Pessina launched his attack. But more broadly, I’ve also wondered whether Labour should adopt what I suppose I would call a “sandwich strategy” for whenever Ed Miliband or Labour’s business team comment on corporate practices, in order to put Labour’s responsible capitalism agenda in the context it deserves. Put simply, every time Labour calls out a business for dodgy practices (so Alliance Boots over tax in this case, or Sports Direct about zero-hours contracts back in November), it should cite at least a couple of examples of good British corporate citizens that they could instead aspire to. As an addendum, I’d also suggest that ideally, neither of these examples should be John Lewis. Yes, the John Lewis mutual model is laudable (I referred to it myself in a piece I wrote for the Labour Finance & Industry Group last September), but it's not the only one going and it can get a bit repetitive when politicians of all parties sometimes can’t seem to think of any other examples of responsible capitalism. It's time to show the rest of Britain's private sector some love.

In its heart, Labour can be a pro-business party and a responsible manager of the economy. But with the attacks from the Tories and their allies in the right-wing press now coming thick and fast, Labour can’t afford to miss any more chances to make the case. We must defend our real record and speak up with conviction.

03/02: Just in the nick of time, Ed Balls has also published Labour's vision for British infrastructure, another feather in the party's pro-business cap