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.

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Owen Smith is naïve if he thinks misogynist abuse in Labour started with Jeremy Corbyn

“We didn’t have this sort of abuse before Jeremy Corbyn became the leader.”

Owen Smith, the MP challenging Jeremy Corbyn in the Labour leadership contest, has told BBC News that the party’s nastier side is a result of its leader.

He said:

“I think Jeremy should take a little more responsibility for what’s going on in the Labour party. After all, we didn’t have this sort of abuse and intolerance, misogyny, antisemitism in the Labour party before Jeremy Corbyn became the leader.

“It’s now become something that is being talked about on television, on radio, and in newspapers. And Angela is right, it has been effectively licenced within the last nine months.

“We’re the Labour party. We’ve got to be about fairness, and tolerance, and equality. It’s in our DNA. So for us to be reduced to this infighting is awful. Now, I understand why people feel passionately about the future of our party – I feel passionately about that. I feel we’re in danger of splitting and being destroyed.

“But we can’t tolerate it. And it isn’t good enough for Jeremy simply to say he has threats too. Well, I’ve had death threats, I’ve had threats too, but I’m telling him, it’s got to be stamped out. We’ve got to have zero tolerance of this in the Labour party.”

While Smith’s conclusion is correct, his analysis is worryingly wrong.

Whether it is out of incompetence or an unwillingness to see the extent of the situation, Corbyn has done very little to stamp out abuse in his party, which has thus been allowed to escalate. It is fair enough of Smith to criticise him for his failure to stem the flow and punish the perpetrators.

It is also reasonable to condemn Corbyn's inability to stop allies like Chancellor John McDonnell and Unite leader Len McCluskey using violent language (“lynch mob”, “fucking useless”, etc) about their opponents, which feeds into the aggressive atmosphere. Though, as I’ve written before, Labour politicians on all sides have a duty to watch their words.

But it’s when we see how Smith came to the point of urging Corbyn to take more responsibility that we should worry. Smith confidently argues that there wasn’t “this sort of abuse and intolerance, misogyny, antisemitism” in the party before Corbyn was voted in. (I assume when he says “this sort”, he means online, death threats, letters, and abuse at protests. The sort that has been high-profile recently).

This is naïve. Anyone involved in Labour politics – or anything close to it – for longer than Corbyn’s leadership could tell Smith that misogyny and antisemitism have been around for a pretty long time. Perhaps because Smith isn’t the prime target, he hasn’t been paying close enough attention. Sexism wasn’t just invented nine months ago, and we shouldn’t let the belief set in that it did – then it simply becomes a useful tool for Corbyn’s detractors to bash him with, rather than a longstanding, structural problem to solve.

Smith's lament that “it’s now become something that is being talked about” is also jarring. Isnt it a good thing that such abuse is now being called out so publicly, and closely scrutinised by the media?

In my eyes, this is a bit like the argument that Corbyn has lost Labour’s heartlands. No, he hasn’t. They have been slowly slipping away for years – and we all noticed when Labour took a beating in the last general election (way before Corbyn had anything to do with the Labour leadership). As with the abuse, Corbyn hasn’t done much to address this, and his inaction has therefore exacerbated it. But if we tell ourselves that it started with him, then we’re grasping for a very, very simple solution (remove Corbyn = automatic win in the North, and immediate erasure of misogyny and antisemitism) to a problem we have catastrophically failed to analyse.

Anoosh Chakelian is deputy web editor at the New Statesman.