Ed Balls' gaffe distracts from Labour's business tangle. Photo: BBC screengrab
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Labour's biggest own-goal on business isn't forgetting Bill Somebody's name

The Labour party has missed a good opportunity to win over British business, and it’s nothing to do with forgetting the names of its advocates.

“‘Bill Somebody’ is Labour’s policy!” cried David Cameron during PMQs yesterday, triumphantly mocking Ed Balls’ memory lapse regarding one of Labour’s business backers on Newsnight this week.

The shadow chancellor’s forgetful performance has exacerbated the criticism that Labour is unattractive to business, which was triggered by a flurry of recent stories about British business leaders dreading the idea of Prime Minister Ed Miliband.

Stefano Pessina, the Boots boss, recently accused the opposition of promoting “catastrophic” policies. His intervention led to a number of other high-profile British business figures voicing their fears, such as the former M&S head Stuart Rose disregarding Miliband as a “Seventies throwback”, and the Yo! Sushi founder Simon Woodroffe commenting that Labour’s approach “scares” him.
 

The shadow chancellor’s “Bill Somebody” gaffe. Video: YouTube

But Balls’ fluff is not a symbol of Labour being anti-business or anti-enterprise. It is merely a distraction from the fact that the party has not strongly capitalised on its great advantage over other parties regarding business: its stance against an EU referendum.

It was clear from all three main party leaders’ speeches to the CBI conference last year, for example, that Miliband has a unique selling point when it comes to wooing business leaders in Britain. He was the only one who could stand firmly against risking Britain’s European Union membership. The uncertainty Cameron has caused by promising a vote on the matter in 2017 has already caused significant jitters among UK business leaders and prospective investors.
 

The Prime Minister jokes about Balls’ forgetfulness during PMQs. Video: YouTube

The Labour party clarifying its stance against promising an EU referendum – and consequently cementing its friendlier attitude towards European migrants – was received well by a business community frustrated with party politics sacrificing investor confidence in Britain.

Miliband’s own-goal has been his failure to target the open goal that his party’s USP on the EU has provided to forge contacts with business leaders. Instead of nurturing relationships with a sector traditionally more sceptical about Labour policies, he has allowed the Tories to level the same old cries of “anti-enterprise” at his party – at a time when it has more potential than ever to win over the business community.

And the PM’s slurs have unfortunately caused Miliband’s party to revert to type and attack “billionaire” big business bosses. One Labour adviser insists it “won’t help” if the shadow cabinet tries to paint people like Pessina as the “arch Satan of capitalism” in their quest to avoid being stereotyped as anti-business. Just one symbol of the messy way Labour has approached its relationship with business is that its key business ally and donor, John Mills, is also a vocal advocate of an EU referendum.

Labour is in the unusual position of filling a “gap in the market” politically regarding business, as the only major party not to capitulate to Ukip on an EU referendum. It should see this as a new opportunity to build bridges rather than allowing its detractors to shrink the party back into its old business-bashing comfort zone.

Anoosh Chakelian is deputy web editor at 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.