While Labour supports working people, the Tories prioritise the privileged few

Cameron and Osborne are more concerned with defending bumper bonuses for bankers than measures to tackle the cost of living crisis.

Over the last 24 hours we've seen the priorities of David Cameron's government exposed once again. While Labour has been setting out concrete policies to tackle the cost of living crisis facing ordinary families, George Osborne has decided to become the champion of bankers' bonuses.
 
At our conference in Brighton, Labour unveiled a number of policies, including measures to tackle low pay, expanding free childcare to support working parents, and a pledge to cut business rates for small businesses, all with the aim of helping struggling families and businesses in these tough times.
 
And, as Ed Miliband announced on Tuesday, the next Labour government will reset our energy market so it works for Britain’s families and businesses, with a new tough regulator to stop overcharging. While we put that in place, the next Labour government will freeze gas and electricity prices until the start of 2017. This will save a typical household £120 and an average business £1,800.
 
But David Cameron and the Tories have different priorities. They are determined to stand up for the privileged few. Earlier this year, they cut the top rate of income tax – giving 13,000 millionaires an average tax cut of £100,000. Bonuses soared by 82% in April as bankers deferred their payments to take advantage of the tax cut.
 
And this week they’ve outdone themselves again. Yesterday, George Osborne launched a legal challenge to defend bankers’ bonuses from an EU cap, which would limit the size of their bonus to one year's salary - or two years' with shareholder approval.
 
This move tells you everything you need to know about the priorities of David Cameron and George Osborne. Since they took office, prices have risen faster than wages in all but one month. Yet they have prioritised defending bumper bonuses for bankers over measures to tackle the cost of living crisis facing ordinary families. By contrast, Labour would tax bank bonuses to fund a compulsory jobs guarantee get young people back to work. With youth unemployment at almost a million, this should be the government’s priority.
 
The lesson for the public this week is clear. Labour will stand up for what working people need to deal with the cost of living crisis. David Cameron and George Osborne will stand up for bankers’ bonuses.
 
Chris Leslie is shadow financial secretary to the Treasury 
 

Chris Leslie is chair of Labour's backbench Treasury committee.

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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.