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6 November 2017

How Brexit gave Jeremy Corbyn an opening with business

The Tories' EU withdrawal stance troubles some businesses more than the prospect of a Labour government. 

By George Eaton

In past years, the mere fact of Jeremy Corbyn addressing the CBI was ridiculed by Conservative politicians and journalists. The Labour leader was cast as an anti-capitalist who had little or nothing to offer business. 

But Brexit, as Corbyn repeatedly stated in his speech today, has created “common ground”. Though the Labour leader is a life-long eurosceptic, who voted against the single market, his party’s stance has found favour among business.

As Corbyn noted: “We have common ground on the need for transitional arrangements to be agreed immediately so that businesses know they won’t face a cliff-edge Brexit when the two year negotiating period is up…And we have common ground on the threat of ‘no deal’ which, contrary to the claims of the Secretary of State for International Trade, is potentially a nightmare scenario. One that involves tariffs on our food imports and our manufacturing exports, queues at our ports and a hard border in Northern Ireland with all the dangers that could bring.”

Conservative Remainers point to Corbyn’s overtures as proof that “hard Brexit” has put them not only on the wrong side of the liberal voters they need to win a majority, but on the wrong side of business. Former minister Anna Soubry tweeted: “Allowing us to be painted party of #HardBrexit places the most hard left #Labour party ever, apparently more pro British biz than the Tories.”

Beyond Brexit, Corbyn cast himself as a mainstream social democratic politician, rather than an anti-capitalist radical. He spoke of “common ground” on “investment, training and industrial strategy” designed to improve the UK’s dismal productivity. On nationalisation, the element of his programme that most troubles business, he remarked: “Some of the world’s biggest economies – Germany, France, even the United States are deciding that key sectors such as energy and water are better off in public ownership. It’s time for Britain to catch up.”

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Labour’s pro-Europeans will note that Corbyn has not committed to permanent membership of the single market and the customs union (though he has not definitively ruled either out). And the party’s 2017 manifesto, which owed more to Keynesianism to Marxism, is regarded by some left-wingers as merely a “transitional programme”. 

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In her response, CBI director general Carolyn Fairbairn did not disguise “fundamental differences” with Corbyn: “It is clear that competitive markets are the best way to improve people’s lives. Abandoning this model will hurt those who need help most and make the UK a laggard in the global race for investment.” Some businesses, like Tony Blair, fear that the UK could endure a “hard Brexit” followed by a “hard-left” Corbyn government – and struggle to decide which is worse (some say the former, since governments can be more easily be changed). 

But for Labour, parity with the Conservatives is a political achievement. For decades, the Tories have projected themselves as the guarantor of prosperity and stability. But the threat posed by Brexit to both means their dystopian warnings over Corbyn are no longer sufficient.