Rising coalition tension squeezes Labour out of the debate

The more Lib Dems and Tories feel licensed to air competing views, the more Labour looks short of th

The Conservative party does not like the 50p tax rate. That much is clear. It is just as clear that government policy is, for the time being, to retain the rate. Meanwhile, the Liberal Democrats support a "Mansion Tax", although it is not government policy to introduce one. Both parties are in office, each accuses the other of hogging the agenda, neither gets its way all of the time. That is how coalition works. It is all quite obvious really.

But one feature of the arrangement that gets less recognition is the effect it is having on Opposition MPs. Labour have complained since the formation of the coalition that two-party government squeezes them out of the news agenda. It also squeezes them out of policy debate. The Lib Dems have cultivated the role of in-house opposition within government; the Tory right does something similar. That doesn't leave much room for the views of the official opposition, which is a bit less glamorous because it is that much further away from real power.

What is more, as coalition relations get tetchier - as they plainly are - this problem for Labour gets worse. Competitive "differentiation" between the Lib Dem and Tory wings of the government will soak up ever more news time. But it isn't just about media attention. The Coalition is a political enterprise that is fundamentally distinct from the two parties that own it. That gives Lib Dems licence to explore the question of what Lib Dem views might be and Tories freedom to debate Toryism in a way that seems increasingly denied to Labour MPs.

There has been plenty of argument in about what sort of direction Labour should be taking, often identifiable by colour coding: Blue, Purple, Black etc. But that energy seems to be fizzling out.

I mentioned in my column this week the paralysing fear of schism that stops Ed Miliband from developing innovative ideas on public service reform (among other things). The Labour benches generally feel frozen with caution. The two Eds, Miliband and Balls, advance the party line in increments and then invite the party to toe it without a fraction of deviation. As a result, anything anyone in Labour says that might be decoded as new or interesting causes a sensation, which only reinforces the leadership's fear of saying anything - or allowing underlings to say anything - egregious.

Paradoxically, the fact of being bound into an awkward alliance with another party seems to have made Lib Dem and Tory MPs more relaxed about expressing their own opinions, while Labour MPs, released from the responsibilities of government, are the most cryptic and tongue-tied of the lot.

Rafael Behr is political columnist at the Guardian and former 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.