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.

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The strange death of boozy Britain: why are young people drinking less?

Ditching alcohol for work.

Whenever horrific tales of the drunken escapades of the youth are reported, one photo reliably gets wheeled out: "bench girl", a young woman lying passed out on a public bench above bottles of booze in Bristol. The image is in urgent need of updating: it is now a decade old. Britain has spent that time moving away from booze.

Individual alcohol consumption in Britain has declined sharply. In 2013, the average person over 15 consumed 9.4 litres of alcohol, 19 per cent less than 2004. As with drugs, the decline in use among the young is particularly notable: the proportion of young adults who are teetotal increased by 40 per cent between 2005 and 2013. But decreased drinking is not only apparent among the young fogeys: 80 per cent of adults are making some effort to drink less, according to a new study by consumer trends agency Future Foundation. No wonder that half of all nightclubs have closed in the last decade. Pubs are also closing down: there are 13 per cent fewer pubs in the UK than in 2002. 

People are too busy vying to get ahead at work to indulge in drinking. A combination of the recession, globalisation and technology has combined to make the work of work more competitive than ever: bad news for alcohol companies. “The cost-benefit analysis for people of going out and getting hammered starts to go out of favour,” says Will Seymour of Future Foundation.

Vincent Dignan is the founder of Magnific, a company that helps tech start-ups. He identifies ditching regular boozing as a turning point in his career. “I noticed a trend of other entrepreneurs drinking three, four or five times a week at different events, while their companies went nowhere,” he says. “I realised I couldn't be just another British guy getting pissed and being mildly hungover while trying to scale a website to a million visitors a month. I feel I have a very slight edge on everyone else. While they're sleeping in, I'm working.” Dignan now only drinks occasionally; he went three months without having a drop of alcohol earlier in the year.

But the decline in booze consumption isn’t only about people becoming more work-driven. There have never been more alternate ways to be entertained than resorting to the bottle. The rise of digital TV, BBC iPlayer and Netflix means most people means that most people have almost limitless about what to watch.

Some social lives have also partly migrated online. In many ways this is an unfortunate development, but one upshot has been to reduce alcohol intake. “You don’t need to drink to hang out online,” says Dr James Nicholls, the author of The Politics of Alcohol who now works for Alcohol Concern. 

The sheer cost of boozing also puts people off. Although minimum pricing on booze has not been introduced, a series of taxes have made alcohol more expensive, while a ban on below-cost selling was introduced last year. Across the 28 countries of the EU, only Ireland has higher alcohol and tobacco prices than the UK today; in 1998 prices in the UK were only the fourth most expensive in the EU.

Immigration has also contributed to weaning Britain off booze. The decrease in alcohol consumption “is linked partly to demographic trends: the fall is largest in areas with greater ethnic diversity,” Nicholls says. A third of adults in London, where 37 per cent of the population is foreign born, do not drink alcohol at all, easily the highest of any region in Britain.

The alcohol industry is nothing if not resilient. “By lobbying for lower duty rates, ramping up their marketing and developing new products the big producers are doing their best to make sure the last ten years turn out to be a blip rather than a long term change in culture,” Nicholls says.

But whatever alcohol companies do to fight back against the declining popularity of booze, deep changes in British culture have made booze less attractive. Forget the horrific tales of drunken escapades from Magaluf to the Bullingdon Club. The real story is of the strange death of boozy Britain. 

Tim Wigmore is a contributing writer to the New Statesman and the author of Second XI: Cricket In Its Outposts.