The coalition is still failing business

The government's enterprise bill provides no evidence of a clear strategic direction.

Today the Enterprise and Regulatory Reform Bill receives its second reading in the House of Commons.  It was trailed in the days before the Queen’s Speech as the centrepiece of a legislative programme by the government built on “growth, justice and constitutional reform”.  In reality, it is anything but.

The bill is a good illustration of the weaknesses and divisions at the heart of the government. The most pressing issue facing Britain is the fact that the economy has gone into reverse. The Prime Minister and Chancellor may wish to hide behind the fact that there is a eurozone crisis, or that we had too many days off because of the Queen’s diamond jubilee, or that the weather is slightly too cold or too hot, or – at the moment – too much rain. But everyone else seems to realise, with the exception of the occupants of 10 and 11 Downing Street, that their insistence on cutting spending and raising taxes too far and too fast, and thereby choking off demand in the domestic economy, has plunged this country back into a recession made in Downing Street. What we need is a proper plan for jobs and growth to get the economy going again – like Labour’s five-point plan.

Only in the last few days, President Obama has implicitly criticised the government’s stance, noting that it is a lot harder to rein in deficits and debt if your economy is not growing.  Tellingly, he singled out Angela Merkel and François Hollande for “working to put in place a growth agenda alongside responsible fiscal plans”. No such praise for David Cameron or George Osborne.

There is no magic piece of legislation that would conjure up growth. But the case for a British Investment Bank needs to be examined, as Labour is doing.  Reforms to allow firms to better plan for the long-term, invest in new plant and skills and ensuring that there are more, better paid jobs so the economy works for more people, more of the time would also improve Britain’s competitiveness and allow us to get back into growth much more quickly.

In the longer-term, the bill provides no evidence of a clear strategic direction.  Business is crying out for a stable policy environment to allow them to invest and plan for the long-term; a proper industrial strategy, based on the long-term to encourage sustainable growth, but this bill has failed to provide this.

We have in the bill the establishment of the Green Investment Bank, a welcome initiative that Labour announced back in 2010, but it won’t have powers to lever in private money to boost green investment until 2016. 

There are reforms designed to make executive pay more accountable and transparent, but ministers are refusing to implement all of the sensible recommendations from the High Pay Commission such as putting an employee representative on remuneration committees – and now it appears that Vince Cable is seeking to water down provisions for annual shareholder votes on executive pay.

The bill includes reforms to employment legislation. There are some changes on tribunals which are worth exploring but, in a nod and a wink to the Tory right, the government is hinting that it could bring forward amendments during the bill’s passage to put Beecroft’s fire at will manifesto on the statute book, alongside other proposals within the bill to water down the rights we enjoy at work.

Cable lamented in his leaked letter to the Prime Minister that the government has lacked a compelling vision on where it wants to take the country’s economy by 2020.  With this bill had an opportunity to rectify this and provide the strategic vision which British business is crying out for, leaving a lasting legacy that would boost economic recovery and secure Britain’s competitiveness in the next decade. Faced with the roadblocks to reform in Downing Street, it is a great shame this opportunity has been missed.

The Chancellor continues to "hide behind the fact that there is a eurozone crisis". Photograph: Getty Images.

Iain Wright is the shadow minister for competitiveness and enterprise.

Getty Images.
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Voters are turning against Brexit but the Lib Dems aren't benefiting

Labour's pro-Brexit stance is not preventing it from winning the support of Remainers. Will that change?

More than a year after the UK voted for Brexit, there has been little sign of buyer's remorse. The public, including around a third of Remainers, are largely of the view that the government should "get on with it".

But as real wages are squeezed (owing to the Brexit-linked inflationary spike) there are tentative signs that the mood is changing. In the event of a second referendum, an Opinium/Observer poll found, 47 per cent would vote Remain, compared to 44 per cent for Leave. Support for a repeat vote is also increasing. Forty one per cent of the public now favour a second referendum (with 48 per cent opposed), compared to 33 per cent last December. 

The Liberal Democrats have made halting Brexit their raison d'être. But as public opinion turns, there is no sign they are benefiting. Since the election, Vince Cable's party has yet to exceed single figures in the polls, scoring a lowly 6 per cent in the Opinium survey (down from 7.4 per cent at the election). 

What accounts for this disparity? After their near-extinction in 2015, the Lib Dems remain either toxic or irrelevant to many voters. Labour, by contrast, despite its pro-Brexit stance, has hoovered up Remainers (55 per cent back Jeremy Corbyn's party). 

In some cases, this reflects voters' other priorities. Remainers are prepared to support Labour on account of the party's stances on austerity, housing and education. Corbyn, meanwhile, is a eurosceptic whose internationalism and pro-migration reputation endear him to EU supporters. Other Remainers rewarded Labour MPs who voted against Article 50, rebelling against the leadership's stance. 

But the trend also partly reflects ignorance. By saying little on the subject of Brexit, Corbyn and Labour allowed Remainers to assume the best. Though there is little evidence that voters will abandon Corbyn over his EU stance, the potential exists.

For this reason, the proposal of a new party will continue to recur. By challenging Labour over Brexit, without the toxicity of Lib Dems, it would sharpen the choice before voters. Though it would not win an election, a new party could force Corbyn to soften his stance on Brexit or to offer a second referendum (mirroring Ukip's effect on the Conservatives).

The greatest problem for the project is that it lacks support where it counts: among MPs. For reasons of tribalism and strategy, there is no emergent "Gang of Four" ready to helm a new party. In the absence of a new convulsion, the UK may turn against Brexit without the anti-Brexiteers benefiting. 

George Eaton is political editor of the New Statesman.