No exit: Ed Miliband waits to enter the hall to address supporters in London on 13 November. Photo: Getty
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Leader: The choice before Labour

Ed Miliband’s big conundrum. 

The febrile events of the past week at Westminster have wounded Ed Miliband deeply but not fatally. The Labour Party is very reluctant to topple its leaders, even when it knows it is destined to lose a general election, as it was under Michael Foot in 1983 and Gordon Brown in 2010 but is not in the present circumstances. Yet so fragile is the confidence of Labour MPs and so jittery is their general mood that one issue of the New Statesman seemed to shake the very foundations of the party and precipitated a leadership crisis.

It is nonsense to suggest that the Labour leader is a victim of a conspiracy led by the right-wing press. It is true that much of the press despises him and the Labour Party; but as our political editor, George Eaton, reported in last week’s issue, many Labour MPs have lost confidence in their leader. This fuelled the feverish speculation about Guy Fawkes Night plots and mysterious letters. Had they not been briefing, there would have been no crisis.

Labour MPs accept that there is no obvious successor to Mr Miliband. Nor is there anyone waiting and willing to strike. Alan Johnson, popular and such a gifted communicator, does not seek the highest office. David Miliband has left the House of Commons and is in exile over the water in New York. Andy Burnham and Yvette Cooper are playing a longer game. And it seems too early for the leaders of the gifted generation who entered the House in 2010 – Chuka Umunna, Tristram Hunt, Rachel Reeves. The party accepts that it has no alternative but to fall in behind Mr Miliband and fight the election with him as the figurehead of a movement of progressive reform.

Mr Miliband is a good and honourable man but many of his MPs believe that he is floundering. Yet they also understand how vital it is that Labour wins next May’s general election. If the Tories win or were to continue in coalition with the Liberal Democrats, the consequences could be lethal for the British Union and for UK membership of the European Union. The poorest would suffer most. Food banks would proliferate. The ethos of public service would be further eroded. The marketisation of our lives and society would continue apace.

The ludicrous events in the Commons over the European Arrest Warrant demonstrated again the ineptitude of David Cameron’s government. The Tories are disunited and expected to lose the Rochester and Strood by-election to the UK Independence Party on 20 November. Nigel Farage’s party has divided the right as the left was divided by the split in the Labour Party and the creation of the Social Democratic Party in the early 1980s, clearing the ground for Margaret Thatcher to carry out her grand counter-revolution. Support for the Liberal Democrats has collapsed. However, in such propitious circumstances, Labour is going backwards. In its northern English heartlands and in Scotland, many of its core supporters are giving up on the party. Or they are simply refusing to vote. Many progressives now prefer the Greens, with their robust anti-austerity message.

Mr Farage, the Ukip leader, in his interview with Jason Cowley on page 22, says: “Everybody thought that people’s tribal allegiance to Labour was as strong, if not stronger, than the tribal allegiance to the Conservative Party. What we’re actually finding is, they don’t even recognise the tribe . . . Increasingly what we’re finding is the people that come from the Labour side . . . don’t think anyone’s on their side.”

Mr Miliband challenged and defeated his elder brother, David, for the leadership because he believed only he could effect the change that Britain needed. He is nothing if not resilient and has that little chip of ice in the heart that characterises all politicians of serious ambition. Indeed, it is a sense of destiny that sustains him even now, in his darkest hours, as many despair of him.

Yet he cannot continue to bear so much of the burden alone. Labour needs to harness the talents and skills of its frontbenchers, including the admirable Jon Cruddas, Mr Burnham, Mr Umunna and Ms Cooper, as part of a more inclusive, team-based approach. In contrast to the Tories, who have failed to shed their image as the party of the rich, Labour’s brand remains strong and polls show that its progressive policies – higher NHS spending, wealth taxes, mass housebuilding and an increased minimum wage – have broad appeal.

Having lost so much ground in spite of this, the party needs urgently to improve if it is to convince voters that it represents a credible alternative government. A defeat to an administration that has combined incompetence with callousness like few others is one that its supporters cannot afford and would not forgive. 

This article first appeared in the 13 November 2014 issue of the New Statesman, Nigel Farage: The Arsonist

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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.