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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Who will win in Stoke-on-Trent?

Labour are the favourites, but they could fall victim to a shock in the Midlands constituency.  

The resignation of Tristram Hunt as MP for Stoke-on-Central has triggered a by-election in the safe Labour seat of Stoke on Trent Central. That had Westminster speculating about the possibility of a victory for Ukip, which only intensified once Paul Nuttall, the party’s leader, was installed as the candidate.

If Nuttall’s message that the Labour Party has lost touch with its small-town and post-industrial heartlands is going to pay dividends at the ballot box, there can hardly be a better set of circumstances than this: the sitting MP has quit to take up a well-paid job in London, and although  the overwhelming majority of Labour MPs voted to block Brexit, the well-advertised divisions in that party over the vote should help Ukip.

But Labour started with a solid lead – it is always more useful to talk about percentages, not raw vote totals – of 16 points in 2015, with the two parties of the right effectively tied in second and third place. Just 33 votes separated Ukip in second from the third-placed Conservatives.

There was a possible – but narrow – path to victory for Ukip that involved swallowing up the Conservative vote, while Labour shed votes in three directions: to the Liberal Democrats, to Ukip, and to abstention.

But as I wrote at the start of the contest, Ukip were, in my view, overwritten in their chances of winning the seat. We talk a lot about Labour’s problem appealing to “aspirational” voters in Westminster, but less covered, and equally important, is Ukip’s aspiration problem.

For some people, a vote for Ukip is effectively a declaration that you live in a dump. You can have an interesting debate about whether it was particularly sympathetic of Ken Clarke to brand that party’s voters as “elderly male people who have had disappointing lives”, but that view is not just confined to pro-European Conservatives. A great number of people, in Stoke and elsewhere, who are sympathetic to Ukip’s positions on immigration, international development and the European Union also think that voting Ukip is for losers.

That always made making inroads into the Conservative vote harder than it looks. At the risk of looking very, very foolish in six days time, I found it difficult to imagine why Tory voters in Hanley would take the risk of voting Ukip. As I wrote when Nuttall announced his candidacy, the Conservatives were, in my view, a bigger threat to Labour than Ukip.

Under Theresa May, almost every move the party has made has been designed around making inroads into the Ukip vote and that part of the Labour vote that is sympathetic to Ukip. If the polls are to be believed, she’s succeeding nationally, though even on current polling, the Conservatives wouldn’t have enough to take Stoke on Trent Central.

Now Theresa May has made a visit to the constituency. Well, seeing as the government has a comfortable majority in the House of Commons, it’s not as if the Prime Minister needs to find time to visit the seat, particularly when there is another, easier battle down the road in the shape of the West Midlands mayoral election.

But one thing is certain: the Conservatives wouldn’t be sending May down if they thought that they were going to do worse than they did in 2015.

Parties can be wrong of course. The Conservatives knew that they had found a vulnerable spot in the last election as far as a Labour deal with the SNP was concerned. They thought that vulnerable spot was worth 15 to 20 seats. They gained 27 from the Liberal Democrats and a further eight from Labour.  Labour knew they would underperform public expectations and thought they’d end up with around 260 to 280 seats. They ended up with 232.

Nevertheless, Theresa May wouldn’t be coming down to Stoke if CCHQ thought that four days later, her party was going to finish fourth. And if the Conservatives don’t collapse, anyone betting on Ukip is liable to lose their shirt. 

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