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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To the Commonwealth, "Global Britain" sounds like nostalgia for something else

And the former colonial subjects have a less rose-tinted view of the past. 

Earlier this month, Boris Johnson became the first British foreign secretary to visit the Gambia since independence. His visit came a few days before the inauguration of the Gambia's new President, Adama Barrow, who has signalled his intention to re-join the Commonwealth - an institution that his dictatorial predecessor had left in protest at its apparent "neo-colonialism".

Accusations of neo-colonialism, regrettably, seem to be of little concern to the foreign secretary. After Johnson committed himself to facilitating the Gambia's Commonwealth re-entry, he declared that "the strength of our partnerships show that Global Britain is growing in influence and activity around the world". 

His comments are the latest example of the government's Brexit mission-creep in its foreign engagements. Theresa May mentioned "Global Britain" no fewer than ten times in her Lancaster House speech last month, reminding us that Britain "has always looked beyond Europe to the wider world" and emphasising the UK's post-referendum desire to "get out into the world". Ministers' repeated subsequent referencing of Global Britain has almost come to the point of re-branding Great Britain itself. But now the government seems to be directly equating Global Britain with the Commonwealth, the organisation comprising most of the former territories of the British Empire. If the Commonwealth is wooing back former members and seemingly growing in stature, that must mean Global Britain is doing the same. The Gambia's proposed re-admission to the Commonwealth is reconfigured as a victory for British clout and prestige in the face of the Brexit naysayers.

But the Commonwealth cannot be a vehicle or front for Global Britain, on either a technical or political level. The Commonwealth emphasises that it is an organisation of 52 equal member states, without any preference in decision-making. India (population 1.26bn) and Tuvalu (10,000) are treated the same. The organisation is headquartered in London, receives the most money from Britain, and its members share elements of history, culture and political systems; but it is not a British organisation and will not take orders from the British government. Commonwealth states, particularly poorer ones, may welcome UK political, financial and developmental support, but will reject the spectre of neo-imperialism. Diplomats remark that their countries did not leave the British Empire only to re-join it through the back door. 

And yet, shorn of influence following the decision to leave the EU, and the single market so instrumental to British jobs and prosperity, the government is desperate to find an alternative source of both power and profit. The members of the Commonwealth, with their links of heritage and administration, have always been touted as the first choice. Leading Brexiter Dan Hannan has long advocated a "union with the other English-speaking democracies", and Liam Fox has been actively pursuing Commonwealth countries for trade deals. But the Commonwealth cannot replace the EU in any respect. While exports to the EU account for just under a half of Britain's total, the Commonwealth receives less than 10 percent of our goods. The decline of UK trade with the Commonwealth was taking place long before Britain joined the EU, and it has in fact revived in recent years while being a member. The notion that Britain is restricted from trading with the Commonwealth on account of its EU membership is demonstrably false.  

The EU, the beloved scapegoat for so many ills, cannot fulfil the role for much longer. Indeed, when it comes to the Commonwealth, 48 of the 52 members have already completed trade deals with the UK, or are in the process of negotiating them, as part of their engagement with the EU. Britain could now be forced to abandon and re-negotiate those agreements, to the great detriment of both itself and the Commonwealth. Brexiters must moreover explain why Germany, with a population just 25 percent larger than ours, exports 133 percent more to India and 250 percent more to South Africa than we do. Even New Zealand, one of Britain's closest allies and a forthcoming trade-deal partner, imports 44 percent more goods and services from Germany, despite enjoying far looser cultural and historical ties with that country. The depth of Britain's traditional bonds with the Commonwealth cannot, in itself, boost the British economy. The empire may fill the imagination, but not a spreadsheet.

The British imperial imagination, however, is the one asset guaranteed to keep growing as Brexit approaches. It is, indeed, one of the root causes of Brexit. Long after the empire fell into history, the British exceptionalism it fostered led us to resent our membership of a European bloc, and resist even limited integration with it. The doctrine of "taking back control" for an "independent Britain" speaks to profound (and unfounded) anxieties about being led by others, when in our minds we should be the ones explicitly leading. The fictional, if enduringly potent victim narrative that we became a colony of someone else's empire, has now taken hold in government. The loss of our own empire remains an unacknowledged national trauma, which we both grieve and fail to accept. The concept of being equal partners with like-minded countries, in a position to exert real, horizontal influence through dialogue, cooperation and shared membership of institutions, is deemed an offence to Britain's history and imperial birthright.

The relentless push for Global Britain is thus both a symptom and cause of our immense global predicament. Through an attempt to increase our power beyond Europe, Brexit has instead deflated it. Britain has, in truth, always been global, and the globe has not always been grateful for it; but now the government preaches internationalism while erecting trade barriers and curbing migration. After empire, Britain found a new role in Europe, but with that now gone, Global Britain risks producing global isolation. Despite the foreign secretary's rhetoric, the Commonwealth, geopolitically and economically, has moved on from its imperial past. It is not waiting to be re-taken.

Jonathan Lis is the deputy director at British Influence.