Shadow business secretary Chuka Umunna, who withdrew from the Labour leadership race and endorsed Liz Kendall. Photograph: Getty Images.
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Chuka Umunna: There are no "free hits" in the Labour leadership contest

The shadow business secretary on why Labour members must not vote for Jeremy Corbyn, why he withdrew from the race, and why the benefit cap is "right". 

When Chuka Umunna appeared on Question Time on 9 July, he was garlanded with praise by his fellow panellists. In response to a question on the Labour leadership race, Conservative minister Anna Soubry said: “I was delighted when Chuka decided not to stand for the leadership because I think he would be, unfortunately, a very good leader of the Labour Party.” Rachel Johnson, the journalist and sister of Boris, confessed: “I was sad when Chuka withdrew so soon. I’d like to launch a campaign to bring back Chuka’s candidacy.” There are many more Tories who are privately celebrating Umunna’s absence from the contest - and plenty in Labour who are lamenting it.

The question of why the shadow business secretary “really” withdrew from the race, just a few days after launching his campaign, was the one raised most often when I mentioned I was interviewing him. Umunna gives the same answer he gave on 15 May, citing the press attention towards his family.

“The long and the short of it was a very human thing, to be frank. I knew that I was going to be subject to a huge amount of attention and I wasn’t naive at all about that. But what did take me aback was the amount of attention that my loved ones and my family got. I knew that would come, maybe later down the line, if I won the contest, and certainly if we got elected and I was leading the party. I knew that was going to come at some point, by which time one is able to put in place the infrastructure and the mechanisms to ensure that those near you are protected.

He denies, as some claim, that his decision was a tactical one based on Labour’s poor electoral prospects. “No, I suppose what I would say is, in terms of the attention my loved ones and my family were getting, that, if you like, was the trigger and that also made me think in terms of what do you want to do over the next few years and is it all about who is leading the party and, frankly, I don’t think it is.”

“If we go into 2020 with a different leader but pretty much positioned in the same way, we’ll lose again and it doesn’t matter who’s leading the party in that sense.”

I ask him whether he will stand again if Labour does indeed lose. “I’d never say never. But I truly do hope that it doesn’t arise again because we’ve got to get our stuff together to make sure that we win in 2020. But I just didn’t feel ready. I wasn’t totally sure that it was the right time and I felt it was too soon [he is 36] and I thought it would be cowardly not to admit to myself or the party or the country.”

At the start of our conversation, Umunna, who was elected to represent Streatham in 2010, delivers a long exposition on the state of the global centre-left. He tells me that “One of the problems I had with the general election campaign, and I think is a problem with our leadership campaign, is that the debate is far too domestic when the reality of the situation is that so many of the things that are knocking people around economically are global in nature.”

In view of his internationalist perspective, I ask him whether he would like to serve as shadow foreign secretary under the new leader. “I’ve said to all the candidates that I still want to play a big role, I still want to be in the shadow cabinet,” he replies. “If there’s one thing that I certainly will do, because I think it’s the right thing to do, I will go out to bat for the party and the leader. I always did that for Ed even when sometimes I disagreed with some of the things that we were doing because I think that’s part and parcel of the job.”

On the day we meet in Umunna’s new office in Portcullis House, the mood in Labour is fraught. Harriet Harman’s approval of the two-child tax credit limit has sparked an internal revolt and there is increasing anxiety at the top of the party over the level of support for Jeremy Corbyn’s leadership bid. Umunna delivers a warning to those Labour members considering voting for the left-winger.

“In this leadership contest, there are no free hits when you’re voting. People have got to consider very carefully what message the result on 12 September will send to the public. It’s not just about who wins this contest, it is the shakedown of the results. There are no free hits in this thing, we are not just selecting a Labour leader, we are selecting somebody who is a Labour prime minister. But we’re also giving an indication to the people of Britain where we are centred, what we think, what we think the solutions will be.

“I’ve got absolutely nothing against Jeremy Corbyn at all and, in a way, the reason I’m backing Liz is for me it’s about the ideas and policies that will help us implement Labour values in a different setting. But I don’t buy the argument that somehow a more full-throated left advocation of Labour values is somehow more true to our values - I don’t believe it is.” He derides Corbyn’s positions: “Weak on defence ... Giving the impression that we are more concerned with those who won’t work, who can work, I don’t think is a way that we’re going to be able to win over people. Giving the impression that we want to beat up on your employer, who gives you your pay and your hours every week, I don’t think is a particularly good look either.”

He adds: “Those types of things might make people feel a bit more comfortable because it avoids making some tough decisions. But if we want to be an alternative and put ourselves forward as a serious, credible alternative party of government than we’ve gotta wake up and deal with the world as it is ... I’m sorry, the left of our party have no monopoly on the desire to build a fairer and more equal society.”

Umunna argues that the punitive bailout conditions accepted by Syriza in Greece have exposed the myth of a left alternative. “If you look at the left, who would hold up Syriza as the poster boys for a different approach, for a kind of revolution in the modern age, it’s patently failed to deliver better outcomes for its people. They have sold their people a pup not once but twice ... The irony is that before they were elected in, in April last year, Greece was the fastest-growing country in the eurozone, it had re-entered the bond market, it was beginning to see demand return to its economy. Syriza have subjected their people to complete chaos, the prospect of one of the cradles of civilization having to seek humanitarian aid from the rest of the European Union over the course of the last seven months, so they’ve failed. So for those who look to Syriza as somehow providing a credible, feasible answer to the challenges that globalisation faces. If they are the example, God help anybody else who seeks to adopt their approach.”

He scorns the argument that Labour lost the election because it was insufficiently “radical”. “People didn’t know what we stood for not because we didn’t, in a more full-throated way, espouse left-wing values. People didn’t know what we stood for because we kept changing our bloody message every bloody month! We started off with ‘the promise of Britain’, which I thought was brilliant, actually, and I said so at the time to Ed, and then we left that in the station and didn’t take it on its journey. We then moved on to ‘one nation’, which again I thought had huge potential, but which got left. And we then moved on to the ‘cost of living crisis’. Well, I don’t know how many people said that to you, I didn’t meet many people who said to me on the doorstep, ‘Chuka, I’ve got a cost of living crisis, can you help me out with the crisis?’ And then we moved on to ‘Britain succeeds when working people succeed’ and we ended up with a ‘Better plan for a better Britain, I can’t even remember... It changed every month. No wonder people didn’t know what we were saying if we were changing what we were saying every bloody month to get a new headline.”

Shortly after withdrawing from the leadership contest, Umunna and his allies endorsed Liz Kendall, who almost all in Labour expect to finish last. He denies that he has been disappointed by her performance. “No, not at all. The reason I backed Liz was because she was making a lot of the arguments that I was making and would have made in the contest. I backed Liz because I think that we’ve got to terms with the world as it is, not as we would like it to be. Never mind the world as it is, the world as it will be.”

But in a self-criticism, he says that “the modernising part of the party” has “identified the right problems” but has been “wanting in coming up with the solutions.” It has been over-reliant on the ideas of the Blair era. “We are using the vocabulary and concepts that were being used in the late ‘90s and early noughties when we’re heading towards the 2020s and the 2030s. I think we’ll know that we are ready and have successfully rebooted and are ready to govern again when we are actually using a different vocabulary and have new concepts to offer as solutions and ideas to the big challenge of how to deliver Labour values in the context of globalisation.”

In Labour’s internal battle over welfare, Umunna is one of the shadow cabinet ministers who sides unambiguously with Harman. “We know that the argument that we just wanted to spend more, borrow more, tax more got through. We know from research and polling that people were disturbed by our position vis-à-vis social security and felt that we were more keen on helping those who didn’t want to work than those who were in work. But he says he supports the household benefit cap, which the Conservatives plan to reduce from £26,000 to £20,000 (£23,000 in London), not for tactical reasons but because it is “right”.

“It’s wrong that you should be able to receive more in benefits than you do in work ... How can I turn round and say to one of my constituents who’s on around £28,000 [pre-tax] that it’s justifiable for somebody to be receiving more in benefits than they do for the hard work they do every day. I would like to meet somebody who would feel able to make that argument in a strong way, never mind in a constituency like mine where we’ve got a 14,000 majority, but in one of the constituencies we need to win.”

Faced with an arithmetical Everest, Umunna says that Labour can draw inspiration from how the Tory modernisers renewed their party. “If you want to beat your opponent, you have to respect your opponent and look at what learning there is to draw from there. George Osborne, David Cameron and those around them learned a lot from New Labour ... We feel pretty awful and it’s fair to say that the party is still in shock and grief at what happened. But it’s not as if they weren’t also faced with a pretty awful situation in 2005.”

Umunna adds that Labour needs to establish new “incubators of ideas” to generate policies fit for this new era. “The Tories had the Centre for Policy Studies they had the Institute of Economic Affairs. But these were very much associated with the old order in Tory circles, so Francis Maude and others began to establish new incubators to think about how you do conservatism in a different age and a different time, in a different Britain, which spawned Policy Exchange, Civitas, Reform, the Centre For Social Justice. I think that was very interesting and obviously he helped them to rethink how to apply conservative values in a different setting and I think we need to go through the same exercise; we need to establish new incubators alongside existing think-tanks and centres.” Umunna names Jon Cruddas, Tristram Hunt, Jonathan Reynolds, Jamie Reed, Rachel Reeves, Emma Reynolds, Steve Reed and Maurice Glasman as some of “the really thoughtful people in the party”. “Frankly, regardless of what happens with the leadership we are all absolutely determined that we reboot and rethink how we do modern social democracy in Britain in an era of globalisation.”

There are, he says, two responses to defeat. “One is that you seek solace in being comforted that you were right all along and the public were wrong. If only we’d shouted a bit louder [a rebuke to Andy Burnham] and had better message discipline, people would have come our way, so really there isn’t too much to do. We can hug each other close and just carry on, really. That’s one reaction. I fear it a bit that we’re in too much of that, emotionally that’s where we are.

“The other reaction is, look, clearly what we did didn’t work, we were not meeting people were they’re at, we were telling them what we wanted them to think. Now we need to work out what we need to do to win.” Umunna does not sound confident that Labour will, at this stage, opt for the latter. 

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.