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Here's what should really terrify Labour about trade union influence in the party

Far from deciding the outcome, the trade unions will be largely incidental to selecting Labour's leader.

Yesterday's Evening Standard has the latest figures on just how many trade union members are signing up to join the Labour party. The figures are terrifying for Labour: but not for the reasons that you might think.

Under Labour's old system, affliated trade unionists were automatically enrolled and voted in the affliates section of the electoral college, which made up a third of the vote. Now, trade unionists must decide to opt-in, and their vote counts for exactly the same as an MP's or a party member.  

Theoretically, this handed more power to the trade unions than they'd ever had before. In the last leadership election, the votes of 258 MPs counted for a third of the vote - while the votes of close to 200,000 trade unionists also counted for a third of the vote. If even half of those members had signed up, the trade unions really would have "picked the Labour leader", not just now but in perpetuity.

But since the leadership contest began, just 1,197 trade union affliates have been signed up to vote in London. That's not a typo: barely a thousand trade unionists have joined the Labour party in London since the leadership election has begun. To put that into perspective,  Unite, Britain's largest trade union, has 200,000 members in London alone. That's under one per cent.

The trade union movement is not going to be particularly influential in either the Labour leadership or the mayoral selection.

Now, if you are a particularly one-eyed supporter of the leadership campaigns of Yvette Cooper and Liz Kendall, the deputy campaign of Caroline Flint, or the mayoral campaigns of Tessa Jowell, David Lammy and Diane Abbott, that might sound like good news. Think again.

Both Andy Burnham and Tom Watson, who will likely recieve the backing of the majority of the trades unions, are popular with Labour activists and it's near certain that at least one of them will triumph. Sadiq Khan, the union candidate in the mayoral race, however, will likely struggle to beat Tessa Jowell as things stand. But regardless of who wins, the result will confirm the impotence of the affliated trade unions under the new system.

And it would be neither unlikely or unreasonable at that point if at least one trade union were to walk away. Where will a Labour party that looks very far from government get its money then?

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics. 

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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.