Conservative Party campaign posters outside Labour's manifesto launch last week. Photograph: Getty Images.
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Why the SNP would struggle to hold Labour to ransom

There is a Commons majority for Trident and the party couldn't amend Budgets in the way it hopes. 

For yet another day, the Conservatives are pushing the line that a minority Labour government would be held to ransom by the SNP. In his first intervention of the election campaign, John Major will warn in a speech that the nationalists would hold sway over economic policy. "Labour would be in hock to a party that - slowly but surely - will push them ever further to the left," he will say. "And who would pay the price for this? We all would. We would all pay for the SNP's ransom in our daily lives - through higher taxes, fewer jobs, and more and more debt.” The Tories regard this attack as a powerful means of winning over Ukip defectors and Lib Dems in southern battleground seats.

In recent weeks they have warned that a Labour government dependent on the SNP for support would be forced to abandon Trident and captiulate on deficit reduction. But this rhetoric masks what would be a very different reality. Firstly, as I wrote last week, the SNP has already dramatically reduced its bargaining power by vowing not to prop up any Conservative-led government. In the case of Trident, as Stephen noted yesterday, those MPs in favour of renewal (most of Labour, the Tories and the Lib Dems) will vastly outweigh those opposed. As long as the Tories are prepared to walk through the division lobbies with Miliband, there is no chance of the SNP blocking defence spending (as its deputy leader Stewart Hosie grandiosely suggested it would). 

The nationalists' hand is little stronger in the case of the Budget. We are told by Major and others that the SNP could flood Labour's programme with tax rises and spending increases. But as Colin Talbot, professor of government at Manchester University, notes in an essential post: "In the Westminster parliament only the government can propose taxation or spending measures. These can be defeated, or amended, but only by cutting spending or lowering or removing taxes – not by increasing either." There is no parliamentary means by which the SNP could force a Labour government to spend £140bn more on public services (as proposed in its manifesto). It is this that explains the confidence of Ed Balls in asserting that he would not "negotiate" with the party over the Budget and that its measures would be entirely determined by himself and Ed Milliband.

The SNP could, in theory, combine forces with the Tories to vote down a Labour Budget (without fear of triggering a second election owing to the Fixed-term Parliaments Act). But would it really be prepared to obstruct measures endorsed in its manifesto such as the reintroduction of the 50p tax rate, the repeal of the bedroom tax, the abolition of non-dom status and a bankers' bonus tax? The sight of SNP MPs voting alongside Conservatives to prevent such progressive policies would be a gift to Scottish Labour. 

For these reasons, whatever the political merits of the Conservatives' attack (and there are some Tories who fear it is crowding out their core message), it deserves to be treated with far greater policy scepticism than at present. The SNP talk a good game but they would struggle to play one. 

George Eaton is political editor of 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.