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. 

Photo: Getty
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After Richmond Park, Labour MPs are haunted by a familiar ghost

Labour MPs in big cities fear the Liberal Democrats, while in the north, they fear Ukip. 

The Liberal Democrats’ victory in Richmond Park has Conservatives nervous, and rightly so. Not only did Sarah Olney take the votes of soft Conservatives who backed a Remain vote on 23 June, she also benefited from tactical voting from Labour voters.

Although Richmond Park is the fifth most pro-Remain constituency won by a Conservative at the 2015 election, the more significant number – for the Liberal Democrats at least – is 15: that’s the number of Tory-held seats they could win if they reduced the Labour vote by the same amount they managed in Richmond Park.

The Tories have two Brexit headaches, electorally speaking. The first is the direct loss of voters who backed David Cameron in 2015 and a Remain vote in 2016 to the Liberal Democrats. The second is that Brexit appears to have made Liberal Democrat candidates palatable to Labour voters who backed the party as the anti-Conservative option in seats where Labour is generally weak from 1992 to 2010, but stayed at home or voted Labour in 2015.

Although local council by-elections are not as dramatic as parliamentary ones, they offer clues as to how national elections may play out, and it’s worth noting that Richmond Park wasn’t the only place where the Liberal Democrats saw a dramatic surge in the party’s fortunes. They also made a dramatic gain in Chichester, which voted to leave.

(That’s the other factor to remember in the “Leave/Remain” divide. In Liberal-Conservative battlegrounds where the majority of voters opted to leave, the third-placed Labour and Green vote tends to be heavily pro-Remain.)

But it’s not just Conservatives with the Liberal Democrats in second who have cause to be nervous.  Labour MPs outside of England's big cities have long been nervous that Ukip will do to them what the SNP did to their Scottish colleagues in 2015. That Ukip is now in second place in many seats that Labour once considered safe only adds to the sense of unease.

In a lot of seats, the closeness of Ukip is overstated. As one MP, who has the Conservatives in second place observed, “All that’s happened is you used to have five or six no-hopers, and all of that vote has gone to Ukip, so colleagues are nervous”. That’s true, to an extent. But it’s worth noting that the same thing could be said for the Liberal Democrats in Conservative seats in 1992. All they had done was to coagulate most of the “anyone but the Conservative” vote under their banner. In 1997, they took Conservative votes – and with it, picked up 28 formerly Tory seats.

Also nervous are the party’s London MPs, albeit for different reasons. They fear that Remain voters will desert them for the Liberal Democrats. (It’s worth noting that Catherine West, who sits for the most pro-Remain seat in the country, has already told constituents that she will vote against Article 50, as has David Lammy, another North London MP.)

A particular cause for alarm is that most of the party’s high command – Jeremy Corbyn, Emily Thornberry, Diane Abbott, and Keir Starmer – all sit for seats that were heavily pro-Remain. Thornberry, in particular, has the particularly dangerous combination of a seat that voted Remain in June but has flirted with the Liberal Democrats in the past, with the shadow foreign secretary finishing just 484 votes ahead of Bridget Fox, the Liberal Democrat candidate, in 2005.

Are they right to be worried? That the referendum allowed the Liberal Democrats to reconfigure the politics of Richmond Park adds credence to a YouGov poll that showed a pro-Brexit Labour party finishing third behind a pro-second referendum Liberal Democrat party, should Labour go into the next election backing Brexit and the Liberal Democrats opt to oppose it.

The difficulty for Labour is the calculation for the Liberal Democrats is easy. They are an unabashedly pro-European party, from their activists to their MPs, and the 22 per cent of voters who back a referendum re-run are a significantly larger group than the eight per cent of the vote that Nick Clegg’s Liberal Democrats got in 2015.

The calculus is more fraught for Labour. In terms of the straight Conservative battle, their best hope is to put the referendum question to bed and focus on issues which don’t divide their coalition in two, as immigration does. But for separate reasons, neither Ukip nor the Liberal Democrats will be keen to let them.

At every point, the referendum question poses difficulties for Labour. Even when neither Ukip nor the Liberal Democrats take seats from them directly, they can hurt them badly, allowing the Conservatives to come through the middle.

The big problem is that the stance that makes sense in terms of maintaining party unity is to try to run on a ticket of moving past the referendum and focussing on the party’s core issues of social justice, better public services and redistribution.

But the trouble with that approach is that it’s alarmingly similar to the one favoured by Kezia Dugdale and Scottish Labour in 2016, who tried to make the election about public services, not the constitution. They came third, behind a Conservative party that ran on an explicitly pro-Union platform. The possibility of an English sequel should not be ruled out.  

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.