Labour can win either from the dark side...or the light. Photo: Getty Images
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There are two ways out of the wilderness for Labour: Jeremy Corbyn or Liz Kendall

There are two paths to a Labour victory in 2020, argues Michael Chessum: either Labour reject the principles of neoliberalism with Corbyn, or embrace them with Liz Kendall.

Deep within us all, there is a Labour centrist – a person who wants desperately to paper over all cracks and unite the party – and, by now, they long for death. Even the leadership candidates who preach unity and triangulation, Yvette Cooper and Andy Burnham, barely seem to believe what they are saying, and the desperate noises of party the grandees who have intervened to urge Labour members to support them have either backfired or fallen on deaf ears. The more that the mainstream commentariat attempts to diagnose what is happening, the more it compounds the problem, with Jonathan Freedland adeptly adding the label of “narcissist” to sit alongside “moron” as a description for Jeremy Corbyn’s burgeoning young support base.

The reason why so much of the party apparatus and its periphery in the press claim to be so concerned about any great shift in Labour is because it is using an old and rather lazy rule of thumb: move too far to the left and you become unelectable; move too far to the right and you may become more palatable to middle England, but you lose your base and threaten party unity. The unelectability of the left has always been based on a dubious conventional wisdom about the 1980s – when the SDP, which was riding high in the polls prior to the Falklands War, split the Labour vote – but it is now utterly useless as a means of understanding how the electorate votes.

Labour lost the 2015 general election because it accepted every premise that the Conservatives and mainstream press laid down, and tried, somehow, to reach a different conclusion. Ed Balls and Ed Miliband went out of their way to accept the need for austerity, cuts and a public sector pay freeze – while at the same time claiming to offer a lukewarm alternative to them. HQ produced mugs that celebrated a ‘tough’ stance on immigration, while Labour’s door-knocking army tried to persuade everyone that Labour was the alternative to racists in Ukip and the Tory Party. The public were, understandably, unconvinced: why vote for a lukewarm version of conventional wisdom when you have the real thing?

The outgoing party leadership is still pursuing a strategy of clumsy contortionism. Harriet Harman’s last substantial parliamentary decision as Acting Leader – to abstain on the Welfare Bill – was an organised act of political dishonesty designed, basically, to deceive the supposedly universally Thatcherite population of middle England into thinking that most Labour MPs agreed with some of the Tories’ approach to welfare, which they don’t. But in order for the manoeuvre to be successful, the press needed report it as a manoeuvre – so by definition everyone, including the very people who were supposed to be deceived by it, had to know that the move was dishonest. Cooper and Burnham responded by simultaneously endorsing the abstention and denouncing it, with Burnham even putting out a self-righteous Facebook post claiming in a roundabout way to have voted against the Bill, which he obviously didn’t.

There is no way to triangulate out of the electoral impasse that faces Labour: in order to build a convincing narrative, either it must reject the (broadly speaking neo-liberal) premises that have constituted the political consensus since the 1990s, or it must embrace them and follow them to their logical right-of-centre conclusions in an attempt to outperform the Conservatives on their own terrain. At present, there are only two candidates offering to do these things – Jeremy Corbyn and Liz Kendall – and, if electability was all one cared about, there is ample reason to believe that only Corbyn and Kendall could win for Labour in 2020.

Corbyn’s rejection of the mainstream political consensus – on work as the real driver of wealth creation, on reversing privatisation of public services, on redistribution, on opposing Britain’s involvement in foreign wars – is incredibly popular, and not just among the party faithful. Most of these policies carry majority support among the wider public, and, just as importantly, they are decisively different from anything currently on offer – a break with what feels like a stagnant political scene. Even in (rare) neutral reporting on Corbyn’s campaign, it is often described in terms of “taking Labour back” to the years of Bennite radicalism. But Corbyn is actually a lot more radical than that: he talks about technology and radical democratic reform, and, with his young support base, he looks an awful lot like the future, not the past.

When I started getting involved in the National Union of Students about five years ago, one of the most revealing conversations I had was with a union officer close to Labour Students – a group which has been dominated by Blairites since the mid-1990s, and until recently served as the union’s leadership. Why, I asked over a pint at a training residential, did they oppose the abolition of tuition fees? My colleague responded that to be honest, he wasn’t really sure – “it used to be because we wanted to be at the centre of higher education funding debate, but now I think we have a principled objection to it”.  Last week, Tony Blair publicly acknowledged the reality of the electability rhetoric that has dominated internal party debates since the 1980s: even if it was the path to victory, he said, he wouldn’t want to win on “a traditional leftist platform”. In other words, concerns about ‘electability’ are really a proxy for a fundamental set of political differences that separate Blair’s heirs from the rest of the party, and especially its left wing.

As centrist social democratic parties all over Europe splinter and re-form, many in the Labour Party establishment are hoping that with enough triangulation and think-tank briefings, Labour can be different. But far bigger and more powerful forces are at work, and the political trajectory that Blair plotted in the 1990s could only ever go so far inside a social democratic party. Either a Kendall or a Corbyn victory could lead to a significant split, but at least the new leadership would be able to develop a coherent political narrative, anchored either in the left or in the centre-right. In defiance of all conventional wisdom and tactical expectations, it is Labour’s left wing that might now lead it out of the wilderness. Perhaps, after decades of watching transparent “positioning” by successive Labour leaders, what the public really wants is an electoral alternative that is based on having ideas and fighting for them. 

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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.