Clegg must give a straight answer

Hints are not enough -- the Liberal Democrats must clarify their position on a power-sharing agreeme

Quite the centre of attention yesterday, Nick Clegg moved today to make his voice heard amid the cacophony, writing an article in the Times, and declaring on Radio 4's Today programme that "I'm not a kingmaker . . . The people are the kingmakers."

Yesterday's speculation centred on what the party would do in the event of a hung parliament -- something our Leader this week calls on the Liberal Democrat leader to clarify.

But did he clarify anything at all?

Ostensibly, he remains committed to the position of "equidistance" from both parties, established before Christmas. His Times piece, along with the usual Lib Dem fodder that a vote for them is not wasted, shows a real -- and probably valid -- edgy feeling that the very public attempts by both Cameron and Brown to align themselves with the Lib Dems could remove a portion of their vote.

But what about the question on everyone's lips: Where would the Lib Dems' alliances lie if a power-sharing agreement became necessary? Despite the fighting talk that "the Liberal Democrats are not for sale", Clegg remains frustratingly reticent, writing:

We will respect the will of the public. The voters are in charge and the decision is theirs. If voters decide that no party deserves an overall majority, then self-evidently the party with the strongest mandate will have a moral right to be the first to seek to govern on its own or, if it chooses, to seek alliances with other parties.

Come on, Nick. This is spectacularly vague -- as I pointed out yesterday, it all depends on how you define the will of the public.

His second point is that, in the event of a hung parliament, the actions of the Lib Dems will be governed by their commitment to four central principles: fair taxes, a fair start for children (with smaller class sizes and a "pupil premium" favouring poorer children), a sustainable economy, and clean politics.

But hang on a minute -- aren't some of these goals completely incompatible with those of the Tories? The fair-tax proposal centres on raising the point at which people start paying income tax to £10,000, by increasing taxes on the rich. This doesn't sound like a great fit with cuts to inheritance tax that would enrich the country's wealthiest 3,000 estates.

And on cleaning up politics, Clegg says he wants to "stop tax avoiders from standing for parliament, sitting in the House of Lords or donating to political parties". I can't help but wonder whether this sounds a little pointed, given the dubious tax status of Lord Ashcroft, Conservative peer and donor extraordinaire.

As my colleague James Macintyre suggests in his fantasy politics piece in this week's magazine, Labour is the more natural ally for the Lib Dems. Clegg's comments today imply that he feels the same way -- on the Today programme, asked if this was a "centre-left agenda", he replied: "It's a fair agenda, yes." In yet another tantalising hint, he said of the Tories: "At the moment, of course, the differences are more striking than the synthetic similarities."

From a political perspective, perhaps it is astute -- necessary, even -- for Clegg to hedge his bets, refusing to publicly rule out a union with the Conservative Party now in case the Lib Dems come to regret it later. But, as he wrote today: "In the event of a hung parliament, the British people also deserve to know how the Liberal Democrats will respond."

Everything Clegg has said today implies that a Lib-Lab pact is more likely than a Conservative one. Now he must come out and say so.

 

Follow the New Statesman team on Twitter.

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.