Time to stand up

Being nice to global corporations doesn't work.

The decisive political development of the last 30 years was the shift to a financialised and globalised capitalism. It was given a huge nudge by the 1980s "big bang" but this merely exacerbated a trend. Capital went global while democracy stayed rigidly national. Ever since the game for the left has been up. In the words of Zygmunt Bauman, we have power without politics and politics without power.

We were reminded of this on Tuesday when HSBC announced to the world that they would, after all, be keeping their company HQ in London, at least until 2015. It’s a trick this particular bank pulls again and again – along with a host of other global corporates.  It’s a message that says if you don’t regulate us as lightly as possible or tax us as minimally as possible then we will go to somewhere that does. Its called blackmail and it works. Governments fear losing even minimal corporate tax payments and duly oblige.  The tax base gets thinner and the capacity of companies to wreck the economy, because of the light touch regulations they demand, grows. Eventually the economy crashes as it did in 2008 and nothing happens to the banks who once again see their pay and rewards rocket while everyone else pays the tab. I’m so glad you're staying HSBC so we can continue to bail you out. 
 
So what to do? Well, lots. First we could tell them to get lost and go and re-locate to their neoliberal nirvana. Some might. But look at HSBC, a basket case of a once proud banking institution that is now mired in a money laundering scandal. But would they go? HSBC is run by real people with real lives. They have been based on London for over 25 years. That is people with families, roots and ties. London is a fantastic place to live and work. Would many want to swap that?
 
We could say instead that these are the rules of a civilised society and we expect you to honour them. We could champion the good companies – like GSK who, on this issue, have been very clear: they will not play the blackmail game and will pay all the taxes they are asked to pay (well done Andrew Witty, the company CEO).
 
We could look at the German system which anchors companies in places and to people through sunken costs that mean you cant just do a moonlight flit and sail off to a low tax, minimal regulation oasis without a hefty bill. And why don’t we suggest, starting in Europe, that there is a minimum level of corporation tax all companies have to pay to end the race to the bottom. The same with tax havens.  And why not introduce a financial transaction tax, which means no finance sector company can ever escape paying their fair share.
 
Companies like HSBC are just playground bullies. Being nice to them doesn’t work. They will still nick our dinner money. We have to stand up to them. Progress is the chase and pursuit of irresponsible capitalism to the furthest quarters of the globe – to pin it down, regulate it and make it safe for people and the planet. That is a big daunting task I know – but its either that or being bullied.
 
PS The government have announced the end of a short-lived ministerial committee set up to tackle long term health issues like obesity, alcohol abuse and growing health inequalities. It was a good idea but ironically wasn’t given any time. Labour and others should demand that it be reinstated or promise to do so themselves. This switch from public services going "upstream" to deal with causes and not just symptoms is crucial to the reform of the state. It is an idea being championed by the brilliant Anna Coote over at the New Economics Foundation. Why spend loads of money fishing someone out of a downstream river when you could have saved money and a life live by stopping them falling in in the first place? Only on this issue it would mean taking on the fast food and alcohol industries. So maybe we shouldn’t be surprised long termism was given such short shift. 
HSBC is always threatening to up sticks and leave the UK (Photo: Getty Images)

Neal Lawson is chair of the pressure group Compass, which brings together progressives from all parties and none. His views on internal Labour matters are personal ones. 

Getty
Show Hide image

Commons Confidential: What happened at Tom Watson's birthday party?

Finances, fair and foul – and why Keir Starmer is doing the time warp.

Keir Starmer’s comrades mutter that a London seat is an albatross around the neck of the ambitious shadow Brexit secretary. He has a decent political CV: he was named after Labour’s first MP, Keir Hardie; he has a working-class background; he was the legal champion of the McLibel Two; he had a stint as director of public prosecutions. The knighthood is trickier, which is presumably why he rarely uses the title.

The consensus is that Labour will seek a leader from the north or the Midlands when Islington’s Jeremy Corbyn jumps or is pushed under a bus. Starmer, a highly rated frontbencher, is phlegmatic as he navigates the treacherous Brexit waters. “I keep hoping we wake up and it’s January 2016,” he told a Westminster gathering, “and we can have another run. Don’t we all?” Perhaps not everybody. Labour Remoaners grumble that Corbyn and particularly John McDonnell sound increasingly Brexitastic.

To Tom Watson’s 50th birthday bash at the Rivoli Ballroom in south London, an intact 1950s barrel-vaulted hall generous with the velvet. Ed Balls choreographed the “Gangnam Style” moves, and the Brockley venue hadn’t welcomed so many politicos since Tony Blair’s final Clause IV rally 22 years ago. Corbyn was uninvited, as the boogying deputy leader put the “party” back into the Labour Party. The thirsty guests slurped the free bar, repaying Watson for 30 years of failing to buy a drink.

One of Westminster’s dining rooms was booked for a “Decent Chaps Lunch” by Labour’s Warley warrior, John Spellar. In another room, the Tory peer David Willetts hosted a Christmas reception on behalf of the National Centre for Universities and Business. In mid-January. That’s either very tardy or very, very early.

The Labour Party’s general secretary, Iain McNicol, is a financial maestro, having cleared the £25m debt that the party inherited from the Blair-Brown era. Now I hear that he has squirrelled away a £6m war chest as insurance against Theresa May gambling on an early election. Wisely, the party isn’t relying on Momentum’s fractious footsloggers.

The word in Strangers’ Bar is that the Welsh MP Stephen Kinnock held his own £200-a-head fundraiser in London. Either the financial future of the Aberavon Labour Party is assured, or he fancies a tilt at the top job.

Dry January helped me recall a Labour frontbencher explaining why he never goes into the Commons chamber after a skinful: “I was sitting alongside a colleague clearly refreshed by a liquid lunch. He intervened and made a perfectly sensible point without slurring. Unfortunately, he stood up 20 minutes later and repeated the same point, word for word.”

Kevin Maguire is the associate editor (politics) of the Daily Mirror

Kevin Maguire is Associate Editor (Politics) on the Daily Mirror and author of our Commons Confidential column on the high politics and low life in Westminster. An award-winning journalist, he is in frequent demand on television and radio and co-authored a book on great parliamentary scandals. He was formerly Chief Reporter on the Guardian and Labour Correspondent on the Daily Telegraph.

This article first appeared in the 19 January 2016 issue of the New Statesman, The Trump era