The scale of Labour’s election loss in May came as a
shock to many of us, myself included. But in retrospect, the polls had warned
us that Labour substantially
trailed the Conservatives on economic competence for much of the last
parliament. That simply meant voters were loath to hand us stewardship of the UK
economy, the world’s fifth-largest with a GDP of £1.8
trillion, and the one in
which they all desire to live and thrive. To reheat the Clinton campaign’s old truism,
“It’s still the economy, stupid”.
This has been further confirmed by several brilliant
former PPCs who couldn’t withstand the Tory tide in this election. North
Cardiff’s Mari Williams told the story of small
business owner reluctantly
voting Tory. Nick Bent told a breakout session at Progress conference in May that
that the Conservative message of a strong economy being needed to fund public
services cut through with the Warrington South voters he was fighting to win
over.
Whichever one of our leadership candidates wins in
September, part of their challenge will be that a concise message is still more
elusive for Labour than it is for our opponents. The eternal Tory idea that
growth is merely a matter of slashing taxes, spending and red tape is simplistic,
but simplicity unfortunately lends itself to soundbites. As social democrats, we
are mindful that there is a bite-point at which taxes and regulation hold back
aspiration and investment in a market economy, but we must also balance that
with other social priorities the Tories do not share - properly-funded public
services, a social safety net, employment rights, consumer protection and a
clean environment. So we must be crystal clear – we are not the Conservatives,
but nor will we ever ask for one more penny of tax or impose one more line of
regulation than is strictly necessary to achieve the stronger, fairer Britain
we need to build. We implied that this
time by ruling out a
National Insurance rise and pledging to freeze business rates, keep Corporation
Tax the lowest in the G7 and set up a Small Business Administration. But we
need to go further and make it sink in.
Having said that, we also need to dispel the idea that public
and private are always at loggerheads. Our education system trains the workers
and innovators of tomorrow and our NHS keeps them fit for work - the public preferred
us to run both. We wanted to
establish a British Investment Bank, to lend to our intrepid entrepreneurs and
spur growth when the high street giants wouldn’t. Energy market reform was
always going to be a hard sell with the Big Six, but it wasn’t just households
that struggled with energy bills – it was small
businesses too. And many of
the major investments in technology, the green economy and transport infrastructure
that will be essential for Britain to thrive as a 21st century
economy will involve state backing.
I also felt business was an example of where we needed to
project vision and avoid being seen to define ourselves by what we opposed. Labour
got into public bust-ups with companies like Alliance Boots and Sports Direct,
which we saw as poor corporate citizens. But we didn’t seem as able to
counter-balance it by publicising good examples in the same way, companies that
could be the leading lights of the moral economy we were fighting for. If we ever
criticise, we should praise at least two others in the same breath.
However, these questions of policy and tone are not for the
leadership alone. Installing a few pro-business spokespeople at the helm while sticking
to our comfort-zone patter on equality and public services on the doorstep
won’t be enough. As LFIG committee member Karen Landles said at one of LFIG’s
events in early 2014, Labour should sound as articulate about private sector
growth as we do about the NHS. Workshops and talking points could be offered to
CLPs, councillors and activists to ensure that fluency on these issues diffuses
throughout the party, an effort I think LFIG could be well-positioned to be at
the forefront of organising.
Finally, Labour also needs to continue its efforts under
the Future
Candidates Programme to recruit
PPCs from private sector backgrounds for 2020 – as Stella
Creasy said when she
addressed LFIG’s annual summer party in the City recently, we must be “of
business”, not just pro-business. The
Smith Institute just reported
that in May Labour actually doubled its share of MPs with business experience compared
to 2010, an encouraging result, but there’s more to do. Some great candidates we
hoped would join the Labour benches, including Victoria Groulef in Reading West
who was supported by
LFIG members, did not have
the chance to break through against the rising blue tide.
The answer to this £1.8
trillion question – what will a Labour Party once again trusted to manage our market
economy need to sound like? – is something Labour needs to decide in this
summer’s leadership contest and spend the next five years implementing. I look
forward to watching that debate unfold, and am proud LFIG will be on hand to
facilitate and shape it. I know that Labour can meet the challenge.
This blog was originally
posted with the Labour Finance and Industry Group (since renamed Labour Business) on August 4th
2015
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