Chuka Umunna: business "has been emasculated under Vince Cable"

Taking on Labour's biggest challenge.

Chuka Umunna talks to Richard Cree about his vision for active government:

Having entered parliament in May 2010, representing his home constituency of Streatham, Umunna was elected to the Treasury Select Committee in June, became Ed Miliband’s parliamentary private secretary when the latter was elected opposition leader in October and became shadow minister for small business and enterprise in May 2011. He then joined the shadow cabinet as shadow business secretary when John Denham stepped down from the post in October 2011.

He bemoans the fact that this great office of state has been "emasculated" by its current occupant.

"The beauty of the business brief is that it is very broad and covers education, foreign policy and trade. It is the largest brief in cabinet with more ministers than any other ministry. But it has been emasculated under Vince Cable, because he doesn’t have clout across Whitehall and doesn’t have the ear of Number 10 or the Treasury. That’s why it became such a powerhouse and a great office under Peter Mandelson, because he had that clout."

Umunna describes his personal politics as those of a "European social democrat", and places himself "right in the centre of the broad church that is the Labour Party". Those politics are becoming increasingly influential within Ed Miliband’s senior team, as Labour attempts to formulate a cohesive and coherent ideology and build a set of policies that might resonate with voters. Umunna believes the current government has misjudged the public mood. The UK, he says, is not a place for the "me, myself and I" politics of the Conservatives. He adds that he doesn’t know what the LibDems stand for any more. The country, he says, is in the mood for government that acts for the common good.

The state modern

But the idea of active government is more than a mere soundbite. The interaction between government and the private sector looks set to become a key battleground in international politics and a major differentiator between political parties in the UK in coming years. With the global economy still suffering the effects of the 2008 crash, there has been a widespread reaction against completely free markets and growing interest in the exploration of new, more regulated models of capitalism. This leads naturally to the question of the precise relationship between government and business.

"It is very interesting, because there is a big debate in politics about the proper role of the state viz-a-viz business and the private sector and how it works and interacts with government," says Umunna. He says the divide on the best approach doesn’t always cut neatly along party lines, but there is a broad left/right split, with the right seeking to reduce the size and role of government and the left seeking to, if not expand, then at least change that role.

Here Umunna delves into a bit of the management speak all modern politicians are prone to. He admits to sitting "in the same space and mindset" as Vince Cable, Lord Heseltine and even Conservative universities and science minister David Willetts. On the other side of the debate is a group of Tory politicians, past and present, including the likes of current foreign secretary William Hague as well as David Cameron and George Osborne. Umunna names a long list of previous Tory ministers including Nicholas Ridley, Norman Tebbit, Keith Joseph and others on the right who championed the cause of small government. It was an approach and philosophy pursued in government in the UK by Margaret Thatcher and in the US by Ronald Reagan. The complaint is that the orthodoxy they established was only questioned after the crash of 2008. The approach is still best summed up by President Reagan’s joke about the most terrifying words in the English language being "I’m from the government and I’m here to help".

Active encouragement

But Umunna’s vision of active government is precisely that it should be there to help. This requires taking a strategic view of industrial policy. But it’s a phrase too redolent of heavy industry and the dark days of the 1970s; hence his preference for "active government" instead. "We have a mixture of excellent industries that don’t fit the classical view of industry, including the creative industries, pharmaceuticals, biotech and business services. These are not what people think about when they hear the phrase industry," he asserts.

He then attempts to explain what an active government should be doing. But, unable to announce policies or commit any spending before the party’s policy review is complete, his answer is somewhat vague. "It is about government using all the tools and levers at its disposal to back business as far and as much as possible. Within that there is a debate about how far you go. There are traditional horizontal interventions that government can affect, for example making sure we have a financial services sector that delivers for the real economy, which is why we have been arguing for a British Investment Bank."

It also includes the policies around skills and education that Labour used when they were in power, including setting up Regional Development Agencies (RDAs). Here he gives one firm policy commitment, setting aside the party political in favour of the practical. He says while he disagreed with scrapping the RDAs and replacing them with Local Enterprise Partnerships (LEPs) – "instead of throwing the baby out with the bath water, we could have improved the model" – he says he is committed to improving rather than scrapping LEPs.

"There is an inherent problem with LEPs because they are reliant on businesses to make it happen. At a time when 50 businesses are going bust every day, expecting people running struggling SMEs to keep their own business going and run an LEP is a big ask. As a result there is under-representation of SMEs on LEP boards."

Just before we leave his office for the photoshoot there is a moment of comedy as he picks up his jacket and some loose change spills out. As he bends to pick it up I joke it’s typical of a Labour business secretary to throw money everywhere. He looks at me mischievously and hoots with laughter.

This article appeares in full in Economia.

Chuka Umunna. Photograph, Getty Images.

Richard Cree is the Editor of Economia.

Getty Images.
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The problems with ending encryption to fight terrorism

Forcing tech firms to create a "backdoor" to access messages would be a gift to cyber-hackers.

The UK has endured its worst terrorist atrocity since 7 July 2005 and the threat level has been raised to "critical" for the first time in a decade. Though election campaigning has been suspended, the debate over potential new powers has already begun.

Today's Sun reports that the Conservatives will seek to force technology companies to hand over encrypted messages to the police and security services. The new Technical Capability Notices were proposed by Amber Rudd following the Westminster terrorist attack and a month-long consultation closed last week. A Tory minister told the Sun: "We will do this as soon as we can after the election, as long as we get back in. The level of threat clearly proves there is no more time to waste now. The social media companies have been laughing in our faces for too long."

Put that way, the plan sounds reasonable (orders would be approved by the home secretary and a senior judge). But there are irrefutable problems. Encryption means tech firms such as WhatsApp and Apple can't simply "hand over" suspect messages - they can't access them at all. The technology is designed precisely so that conversations are genuinely private (unless a suspect's device is obtained or hacked into). Were companies to create an encryption "backdoor", as the government proposes, they would also create new opportunities for criminals and cyberhackers (as in the case of the recent NHS attack).

Ian Levy, the technical director of the National Cyber Security, told the New Statesman's Will Dunn earlier this year: "Nobody in this organisation or our parent organisation will ever ask for a 'back door' in a large-scale encryption system, because it's dumb."

But there is a more profound problem: once created, a technology cannot be uninvented. Should large tech firms end encryption, terrorists will merely turn to other, lesser-known platforms. The only means of barring UK citizens from using the service would be a Chinese-style "great firewall", cutting Britain off from the rest of the internet. In 2015, before entering the cabinet, Brexit Secretary David Davis warned of ending encryption: "Such a move would have had devastating consequences for all financial transactions and online commerce, not to mention the security of all personal data. Its consequences for the City do not bear thinking about."

Labour's manifesto pledged to "provide our security agencies with the resources and the powers they need to protect our country and keep us all safe." But added: "We will also ensure that such powers do not weaken our individual rights or civil liberties". The Liberal Democrats have vowed to "oppose Conservative attempts to undermine encryption."

But with a large Conservative majority inevitable, according to polls, ministers will be confident of winning parliamentary support for the plan. Only a rebellion led by Davis-esque liberals is likely to stop them.

George Eaton is political editor of the New Statesman.

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