A response to @sjwrenlewis: Labour’s inability to connect with business

I’ve had a recent twitter discussion with Simon Wren Lewis on whether Labour was genuinely anti-business, or whether that tag was successful political spin.

Simon asked a legitimate question: didn’t Labour (before the last election) just lack a business policy? A good question which got me thinking if I was being too rash about whether the anti-business tag was more substance than spin.

So here’s my (belated) response to Simon based on five years of lobbying Miliband’s Labour:

There were a lot of people in Labour (especially in the shadow BIS team) that got it.

But there too many, right at the top, that didn’t.

They didn’t get why a lot of businesses in a lot of different sectors raised their eyebrows at the nonsensical predator/producer distinction. It was a thoroughly unnecessary divide that meant most businesses assumed they’d eventually end up on Miliband’s naughty step.

Businesses didn’t know why, at Labour’s annual business receptions, Miliband’s only focused on what businesses needed to do to make a better contribution — to the environment, to wages, to training.

When businesses invited senior Labour figures to come see what they were already doing to contribute to the economy and society, they didn’t know why it was a struggle to get those critical Labour figures to come see them on their patch, to visit their offices factories and staff. Coalition MPs were being turned away the requests for visits were so frequent.

They didn’t know why, when senior Labour figures were told directly (and privately) facts about, for example, how commercial diplomacy helps boost exports, those views were mocked in semi-public forums shortly later.

I could go on.

I’ve spent 10 years in around manufacturing businesses in the UK. When you meet the MD, FD, CEO, Senior Exec, etc… of one of these businesses, they know, within 30 seconds if you get their business. If you get business, full stop.

Miliband’s Labour wasn’t given 30 seconds to prove their credentials; it was given five years. And in those five years it not only repeatedly failed to engage positively (as described above) with willing partners.

It either didn’t know how, had forgotten how or didn’t want to connect with business.

Was this lack of engagement — this lack of connection — reflective of a lack of a business policy?

Some of their business policies were helpful, eg their commitment to industrial strategies.

Others were less so, eg their vagueness on the corporate tax rate.

I think there’s more in taxes that matter for investment than the CT rate, like capital allowances, capital gains and R&D tax relief. But once you lower them to a level, raising them creates time-inconsistency problems that put off investment.

So when Labour piled in on simplistic views of which corporates were and were not ‘paying taxes’, it only reinforced the perception that business was bad and that, at some point, most business would be deemed bad for one reason or another.

And it suggested that, perhaps, Miliband’s Labour didn’t really value business. They definitely weren’t pro-business. And they definitely weren’t a-business: there was often a negative moral judgement placed on business.

So was Miliband’s Labour anti-business? I typically don’t like binary disctinctions. Life operates in shades of grey.

They best way I can sum up is via an anecdote:

A few weeks before the election started, a political consultancy held one of they many pre-election dinners with a couple of Labour shadow Ministers and one of their external senior business advisors.

During the dinner, the external advisor said that he had heard from many people that Labour had a ‘business problem’. But he couldn’t understand why, and listed a few reasons why business should be pro-Labour (he didn’t, by the way, give any strong reasons why Labour was pro-business).

I don’t know what he was hoping for, but the awkward silence of 20-odd loquacious lobbyists probably wasn’t it. None of us believed his statement defensible (or could find a form of words that could defend it).

Yes, the Tory business letter was spin, and it probably had no impact. The fact that Labour could only respond with Bill Somebody spoke volumes about the substance of five years of engagement with business.

So maybe Miliband’s Labour wasn’t truly ‘anti-business’, but it often felt that way to industry.

(ps — I think the current Labour leadership election isn’t an emotional spasm, or a reaction to the inability to spin a weak, Tory-lite platform into electoral success.

Rather I think it reflects the fact that Labour lost the ability to connect with the wider electorate and to change itself accordingly. Only when it begins to change and find new ways of connecting — with the public, with business — will it win elections again).

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