John Cridland's assault on Miliband completes the CBI's divorce from reality

The CBI head presents the Labour leader's plans as dangerous Bolshevism. But in an age of market failure, most businesses won't agree with him.

"[It] raised the hairs on the back of my neck". That was the reaction of CBI head John Cridland to Ed Miliband's conference speech. What could have inspired such terror? In an interview in today's Times, Cridland cites "price controls, wage controls, land controls, increased corporation tax" and Miliband's alleged contempt for "large companies" as evidence of his nefarious socialism. "It’s the aggregation of those five. It has caused business to scratch their heads...It’s quite a philosophical speech, and a shift to the left," he says. 

But look beyond the rhetoric, and Cridland's intervention is more revealing of the CBI's conservatism than it is of Miliband's radicalism. His attack on "wage controls", for instance, is a reference to Miliband's pledge to examine the possibility of increasing the minimum wage in sectors such as finance, construction and computing. At present, with the minimum wage now worth no more than it was in 2004 (after being continually eroded by inflation) and with 4.8 million workers paid less than the living wage, it is the taxpayer that is forced to pick up the bill in the form of tax credits and other in-work benefits. Why should making those businesses that can afford to pay their staff more do so, be considered dangerous leftism? Were Cridland a more enlightened figure, he might have noted that those companies who pay their employees the living wage of £7.45 an hour (£8.55 in London) report increased productivity, reduced absenteeism, improved morale and higher staff retention rates. 

And it's not only here that Cridland is engaged in crude political spin. On corporation tax, Miliband has modestly proposed increasing the main rate from 20% to 21% in order to fund a reduction in businesses rates for commercial premises with an annual rental value of £50,000 or less. This move would still leave the UK with the second-lowest corporate tax rate in the G20 (after the coalition reduced it from a starting level of 28% in 2010) and one well below the US's 39%, Japan's 38% and Germany's 30%. It was the Conservatives' Zac Goldsmith who quipped after Miliband's speech, "The CBI attacks Miliband's plans for small firms. That suggest he might be on to something."

As for the Labour leader's plan to force developers to "use or lose" their land, framed by Cridland as Bolshevik-style requisition, that enjoys the support of that well-known radical, Boris Johnson. As the mayor recently told the London Assembly: "To constrict supply to push up prices by land-banking is plainly against the economic interests of this city. I’m all in favour of using the powers where there are clear cases of land-banking, where people could go ahead with developments that would be massively to the benefit of this city."

While developers sit on vacant land and wait for its value to go up, thousands of houses with planning permission are left unbuilt. Figures published by the Local Government Association show that there are 400,000 homes with permission that have not developed, while in London, where demand is highest, there are 170,000, this at a time when housing starts have fallen to 98,280, less than half the number required to meet need (230,000). Is it really anti-business to want to ensure employees are able to live in the city where they work? 

On energy prices, Cridland argues, "I think we have to be honest and open with the public that bills are going to have to go up for households to make up for years of insufficient investment". He is certainly right about the need for greater investment, but why should families be penalised at a time of collapsing living standards?

As another famed socialist, John Major, observed at last week's Press Gallery lunch, "I do not regard it as acceptable that they have increased prices by this tremendous amount. Nor do I regard their explanation as acceptable, that they are investing for the future. With interest rates at their present level, it’s not beyond the wit of man to do what companies have done since the dawn of time and borrow for their investment rather than funding a large proportion of their investment out of the revenue of families whose wages have not been going up at a time when other costs have been rising".

One searches in vain in Miliband's speech for any evidence of his alleged loathing of all large companies, but when the head of the UK's biggest employers' group (albeit one that still represents just 5% of businesses) so casually dismisses reforms that would improve conditions for millions of workers and owners, it becomes clearer what the Labour leader meant when he first spoke of "the predators" and "the producers". 

CBI Director General John Cridland addresses the CBI Scotland annual dinner on September 6, 2012 in Glasgow. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty Images
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What's to be done about racial inequality?

David Cameron's words on equal opportunities are to be welcomed - now for some action, says Sunder Katwala.

David Cameron made the strongest, clearest and most high profile statement about ethnic inequalities and the need to tackle discrimination ever yet offered by a British Prime Minister in his leader’s speech to the Conservative Party conference in Manchester.
“Picture this. You’ve graduated with a good degree. You send out your CV far and wide. But you get rejection after rejection. What’s wrong? It’s not the qualifications or the previous experience. It’s just two words at the top: first name, surname. Do you know that in our country today: even if they have exactly the same qualifications, people with white-sounding names are nearly twice as likely to get call backs for jobs than people with ethnic-sounding names? … That, in 21st century Britain, is disgraceful. We can talk all we want about opportunity, but it’s meaningless unless people are really judged equally”, said Cameron.
While the proof of the pudding will be in the eating, this was a powerfully argued Prime Ministerial intervention – and a particularly well-timed one, for three reasons.

Firstly, the Prime Minister was able to root his case in an all-but-universally accepted appeal for equal opportunities. It will always prove more difficult in practice to put political energy and resources behind efforts to remedy discrimination against a minority of the population unless a convincing fairness case is made that values cherished across our whole society are at stake. Cameron’s argument, that any party which tells itself that it is the party of the ‘fair chance’ and ‘the equal shot’ must have a response when there is such clear evidence of discrimination, should prove persuasive to a Conservative Party that has not seen race inequalities as its natural territory. Cameron argued that the same principles should animate responses to discrimination when it comes to race, gender and social class. Put like that, wanting job interviews to be fair – by eradicating conscious and unconscious patterns of bias wherever possible – would strike most Britons as offering as clear a case of the values of fair play as wanting the best baker to win the Great British Bake-Off on television.
Secondly, Cameron’s intervention comes at a potential "tipping point" moment for fair opportunities across ethnic groups. Traditionally, ethnic discrimination has been discussed primarily through the lens of its impact on the most marginalised. Certainly, persistent gaps in the criminal justice system, mental health provision and unemployment rates remain stark for some minority groups. What has been less noticed is the emergence of a much more complex pattern of opportunity and disadvantage – not least as a consequence of significant ethnic minority progress.

Most strikingly of all, in educational outcomes, historic attainment gaps between ethnic minorities and their white British peers have disappeared over the last decade. In the aggregate, ethnic minorities get better GCSE results on average. Ethnic minority Britons are more likely, not less likely, to be university graduates than their fellow citizens. 

As a result of that progress, Cameron’s intervention comes at a moment of significant potential – but significant risk too. Britain’s ethnic minorities are the youngest and fastest-growing sections of British society. If that educational progress translates into economic success, it will make a significant contribution to the "Great British Take-Off" that the Prime Minister envisions. But if that does not happen, with educational convergence combined with current ‘ethnic penalties’ in employment and income persisting, then that potential could well curdle into frustration that the British promise of equal opportunities is not being kept.  Cameron also mirrored his own language in committing himself to both a ‘fight against extremism’ and a ‘fight against discrimination’: while those are distinct challenges and causes, actively pursuing both tracks simultaneously has the potential, at least, depolarise some debates about responses to extremism  - and so to help deepen the broad social coalitions we need for a more cohesive society too.

Thirdly, Cameron’s challenge could mark an important deepening in the political competition between the major parties on race issues. Many have been struck by the increase in political attention on the centre-right to race issues over the last five to ten years. The focus has been on the politics of representation. By increasing the number of non-white Conservative MPs from two to seventeen since 2005, Cameron has sent a powerful signal that Labour’s traditional claim to be ‘the party of ethnic minorities’ would now be contested. Cameron was again able to celebrate in Manchester several ways in which his Cabinet and Parliamentary benches demonstrate many successful journeys of migrant and minority integration in British society. That might perhaps help to ease the fears, about integration being impossible in an era of higher immigration, which the Home Secretary had articulated the previous day.

So symbolism can matter. But facial diversity is not enough. The politics of ethnic minority opportunity needs to be about more than visits to gurdwaras, diversity nights at the party conference fringes and unveiling statues of Mahatma Gandhi in Parliament Square. Jeremy Corbyn’s first speech as Labour leader did include one brief celebratory reference to Britain’s ethnic diversity – “as I travelled the country during the leadership campaign it was wonderful to see the diversity of all the people in our country” – and to Labour bringing in more black, Asian and ethnic minority members - but it did not include any substantial content on discrimination. Tim Farron acknowledged during his leadership campaign that the Liberal Democrats have struggled to get to the starting-line on race and diversity at all. The opposition parties too will no doubt now be challenged to match not just the Prime Minister’s rhetorical commitment to challenging inequalities but also to propose how it could be done in practice.

Non-white Britons expect substance, not just symbolism from all of the parties on race inequalites.  Survation’s large survey of ethnic minority voters for British Future showed the Conservatives winning more ethnic minority support than ever before – but just 29 per cent of non-white respondents were confident that the Conservatives are committed to treating people of every ethnic background equally, while 54 per cent said this of Labour. Respondents were twice as likely to say that the Conservatives needto do more to reach out – and the Prime Minister would seem to be committed to showing that he has got that message.  Moreover, there is evidence that ethnic inclusion could be important in broadening a party’s appeal to other younger, urban and more liberal white voters too – which is why it made sense for this issue to form part of a broader attempt by David Cameron to colonise the broad centre of British politics in his Manchester speech.

But the case for caution is that there has been limited policy attention to ethnic inequalities under the last two governments. Restaurateur Iqbal Wahhab decided to give up his role chairing an ethnic minority taskforce for successive governments, unconvinced there was a political commitment to do much more than convene a talking shop. Lib Dem equalities minister Lynne Featherstone did push the CV discrimination issue – but many Conservatives were sceptical. Cameron’s new commitment may face similar challenges from those whose instinct is to worry that more attention to discrimination or bias in the jobs market will mean more red tape for business.

Labour had a separate race inequalities manifesto in 2015, outside of its main election manifesto, while the Conservative manifesto did not contain significant commitments to racial inequality. The mid-campaign launch in Croydon of a series of race equality pledges showed an increasing awareness of the growing importance of ethnic minority votes - though the fact that they all involved aiming for increases of 20 per cent by 2020 gave them a slightly back-of-the-envelope feel. 

Prime Ministerial commitments have an important agenda-setting function. A generation ago the Stephen Lawrence case opened the eyes of middle England to racist violence and police failures, particularly through the Daily Mail’s persistent challenging of those injustices. A Conservative Prime Minister’s words could similarly make a big difference in the mainstreaming of the issue of inequalities of opportunity. What action should follow words? Between now and next year’s party conference season, that must will now be the test for this Conservative government – and for their political opponents too. 

Sunder Katwala is director of British Future and former general secretary of the Fabian Society.