The party of labour has often struggled with its approach to capital, and the signs from Jeremy Corbyn’s first speech to his annual conference were not auspicious. The review of why Labour lost the 2015 general election, conducted by Jon Cruddas, concluded that the party inspired no trust on the economy and its leader was not seen as a viable Prime Minister. It is hard to see how that situation has now improved.
Jeremy Corbyn’s mandate as leader is clear. He won 60% of the party votes and a clear victory over each of his rivals. However, his leadership has already, even a few weeks in, been fraught. Labour policy on Trident, for example, is a fiasco. The leader holds a position – opposition to a nuclear deterrent – which is at odds with both official party policy and the views of the majority of the Shadow Cabinet, many of whom have pledged to resign if Labour commits to unilateral abandonment. Labour looks set to stumble on in favour of a weapon its leader has conceded he would never use.
If confusion is the first characteristic of the new Labour leadership, then retreat appears to be the second. The appointment of John McDonnell as Shadow Chancellor was thought to herald an aggressive critique of austerity and a range of radical policies culminating in a changed mandate for the Bank of England, possibly even the revocation of its independence, and a licence to print money. Mr McDonnell is, after all, a man on record as saying he wanted to overthrow capitalism and is, even now, not afraid to utter the word ‘socialism’ in interviews and say that the gradual transformation of capitalism is apace.
However, that is not the impression Mr McDonnell has actually given in policy. Backed by an impressive array of academic experts, who include the Nobel Laureate Joseph Stiglitz, Mr McDonnell described himself as a bank manager and went out of his way to say that he wanted to balance the books. Though he is happy to borrow for investment, Mr McDonnell has taken such a cautious approach to the public finances so far that some of his words have been indistinguishable from those that got Liz Kendall branded a Tory during the leadership campaign. Indeed, Labour Party economic policy is essentially unchanged, at the moment, from that which it inherited from Ed Miliband.
Thereby hangs a problem, because Mr Miliband’s Labour Party trailed the Conservatives by 20 points on their competence to run the economy. It is hard to see how Mr Corbyn and Mr McDonnell repeating ideas once tried by the Eds Miliband and Balls amounts to an upgrade. There is also the problem, left by Mr Miliband, that Labour seems hostile to business and to the process of wealth creation. Mr Miliband never gave representatives of business the sense that he cared what they thought or had any interest in what they did. Mr Corbyn has hardly made the cultivation of business a priority in his 30-year career in politics, either. Labour has a long way to go to convince wealth creators that it is a better option for them than the Conservative Party.
Jeremy Corbyn's mandate as leader is clear. However, his leadership has already, even a few weeks in, been fraught.
The appointment of the open-minded Angela Eagle as Shadow Business Secretary augurs a little better. As does the rest of the business team that Mr Corbyn was able to assemble. Bill Esterson, Toby Perkins, Gordon Marsden and Lord Stevenson are all able and sympathetic figures who want Labour’s dialogue with business to be constructive. Behind the scenes, relations will continue and the conversation will be convivial and perhaps even productive.
A party cannot, however, escape the shadow cast by its leader and Mr Corbyn is a man more convincing when he is talking about human rights abuses in Saudi Arabia than he is small businesses in Sunderland. His conference speech was a case in point. There was a strong emphasis on worker protection and the rights of workers but nothing on enterprise. Of course, the worker rhetoric pleases the delegates in the conference chamber and there is nothing wrong with that. It is the Labour Party conference, after all. There was nothing objectionable about what Mr Corbyn said either. The worrying thing was not that he spoke to the hall but that he spoke only to the hall. He gave the distinct impression that he sees the process of wealth creation as a chain of alienation and exploitation.
Mr Corbyn’s team pointed, after the speech, to the section on self-employment which was, apparently, the leader’s attempt to reach out to the business community. That might have worked if Mr Corbyn had said anything about the pleasures and travails of running a small company, about the growth potential, the generation of employment, the satisfaction of being your own boss and also the sheer hard work of doing every job from the top to the bottom of the company. He could have signalled that he understood the frustrations of a small business owner with burdensome regulation and not being paid on time. Instead, his sole focus was on getting workers’ rights equivalent to people in larger firms. Again, it is not that what Mr Corbyn said was at all objectionable, more that he missed an opportunity to speak to a wider audience.
It is hard not to conclude that Mr Corbyn did not reach out because he does not know how to do so. His mandate as leader is unequivocally from the Left and even the new intake of Labour MPs seem happy to indulge themselves on a left-wing prospectus that leaves Labour with no chance of power in the foreseeable future.
This, of course, presents a huge opportunity for a shrewd Conservative Party, and in its Chancellor of the Exchequer George Osborne the Conservative Party has a very shrewd operator indeed. Mr Osborne approached his own party conference in Manchester as very much the toast of the town because of his plans to devolve so much power to Manchester’s Labour council. The fortunes of the Chancellor do tend to follow the cycle of the economy and Mr Osborne’s poor ratings have improved to the point that he is now considered the likely successor to David Cameron when the latter steps down as Prime Minister, probably in 2019.
With an economy growing well and employment high, it might all be thought plain sailing for the Conservative Party. The first conference after an election victory is always something of a rally for the party faithful. However, this would not be politics if there were no clouds on the horizon. Mr Cameron tried to buy off the Europhobes in his party with the promise of a referendum on Britain’s place in the European Union (EU) and the moment of reckoning is looming, even though we do not know yet precisely when.
The appointment of the open-minded Angela Eagle as Shadow Business Secretary augurs a little better. So does the rest of the business team that Mr Corbyn was able to assemble.
Research by Open Europe has revealed the scale of the task. About a fifth of Tory MPs are keen to stay in and about the same number cannot be reconciled to staying in, no matter what. The rest stand somewhere in between, some leaning towards yes and some towards no but all of them waiting to see the fruits of Mr Cameron’s renegotiation of Britain’s terms in the capitals of Europe. The trouble here is that Mr Cameron has hinted at some things that Tory MPs would like – such as changes to the freedom of movement of labour – that he is highly unlikely to be able to deliver and which would, in any case, require treaty change. The best he will be able to offer will be a post-dated cheque on reform.
This, rather than the fiasco in the Labour Party, will be the site of the serious politics over the next two years. Britain’s relationship with the EU could come to an abrupt, unwanted and unexpected end. The best reading of public opinion suggests that the case to stay in, which will be dry and arithmetical like the case for the union of Great Britain, should prevail. But there is no guarantee and another migration crisis, even one with no direct relevance to the institutions of the EU, could easily shift that settled view. David Cameron’s premiership will be on the line and so will his legacy.
Article by Phillip Collins