The eurosceptic backlash spreads to the cabinet

Duncan Smith raises concerns over failure of Cameron's "veto".

I wrote this morning that to maintain momentum, the latest Tory revolt over Europe needed a frontbencher, most likely Iain Duncan Smith or Owen Paterson, to speak out. Since then, it's emerged that both of them did just that at today's cabinet meeting. According to the Prime Minister's official spokesman, Duncan Smith raised legal concerns over the use of EU institutions by the EU 25, while Paterson asked about trade and "more generally about the debate on the eurozone".

It's not hard to see why Duncan Smith, in particular, is troubled by Cameron's willingness to allow the eurozone countries to use EU-wide institutions to enforce their new "fiscal compact". Just look at what he told Andrew Marr on Sunday:

ANDREW MARR:

And didn't want the EU structures to be part of this, but we've now ...

IAIN DUNCAN SMITH:

(over) Well he's vetoed, but he's vetoed.

ANDREW MARR:

(over) ... it now looks as if the EU structures are going to be part of it.

IAIN DUNCAN SMITH:

I wouldn't let speculation go too far. The fact is the Prime Minister vetoed them using the institutions, and he's always said that veto was because we had no guarantees that what they were proposing would not damage the single market or, for that matter, would actually cause problems to the financial sector. And we don't know what they're coming forward with yet. They still haven't completed their treaty and they aren't anywhere near signing it, and we don't know that everybody will go down that road with them. So best to wait until we get there to figure out what it is that they're actually coming forward with.

But the truth, as IDS will now be painfully aware, is that Cameron's "veto" didn't prevent the EU 25 from using the European Commission and the European Court of Justice to police the new treaty. Nick Clegg, meanwhile, having previously described Cameron's actions as "bad for Britain", reportedly "agreed" with his approach at yesterday's summit.

With the cabinet's leading europhile in agreement and its leading eurosceptic in dissent, Tory MPs will only feel empowered to continue their rebellion.

George Eaton is political editor of 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.