Labour Party and Business: A Difficult Relationship?


Alan Sugar has recently resigned as a member from the Labour Party claiming that the Labour Party has become “anti-business”.

It is just one event that has happened in the past couple of years underlining Labour’s problematic relationship with business and enterprise.

The 1983 Labour manifesto was dubbed the ‘longest suicide note in history’ by Gerald Kaufman, because it discussed renationalising all the industries privatised by the Tory government, scrapping Trident and removal from the European Common Market. The Tories have always been seen as the pro-business party and perhaps that’s partly why the Conservatives have won this time around. The idea that Labour is ‘bad for the economy’ is a statement that fundamentally damages Labour as much as the statement that the Tories ‘hate the NHS’.

So should Labour become a Tory-lite version of the Tories and redevelop a New-Labour stance with business? Is it necessary to reject a left wing ideology of business to get elected? Or is something else needed?

Whilst the 1983 manifesto may be the longest suicide note in history, but simply redeploying New-Labour may in fact be the longest suicide attempt in history. Due to the dominance of the SNP in Scotland, the rise of UKIP in Labour heartlands, the ‘hipster’ Green vote in the cities, adopting New Labour policies could be a rope around Labour’s neck. Being simply ‘pro-business’ is not enough to win voters now. Pro-business policies will not matter for Labour working class voters flirting with UKIP because they aren’t going to benefit. Indeed the areas that Labour lost to the Tories, Plymouth Moor View, Southampton Itchen and Derby North aren’t known for being closet Thatcherites. Indeed, Plymouth is highly dependent on government spending via Devonport Navel base and dockyard. Plymouth Moor View is one of the most UKIP friendly seats in the country, according to Goodwin and Ford’s Revolt on the Right.

What is even more fascinating is that ‘Labour Heartland’ seats such as Tristram Hunt’s Stoke-on-Trent Central, and Hartlepool are extremely vulnerable to a right wing opposition because the UKIP and Tory vote are larger than Labour. If UKIP can convince enough working class Tories to vote for them in these areas, they will deny Labour of ever being able to make a majority. Needless to say if Labour was to adopt New-Labour policies to business, seats like York Central, Bristol West, Cambridge and Sheffield Central are vulnerable to Green.

If Labour is to adopt a ‘pro-business’ stance it needs to fit this in a progressive agenda. It needs to argue that government spending is good for business as it leads to higher growth in the economy. It needs to use studies that show their spending policies lead to higher growth. Supporting lower business taxes should be balanced with worker representation on boards. Taxation should be weighted on property rather than on income, so people have incentive to work. Most of all, a pro-business agenda needs to focus on regional development. By focusing on developing the economy across the whole of the country and across many sectors should be a priority of a Labour government. By developing a strategy for an economy based on science, technology, engineering and maths, Labour can encourage a progressive economy based on an industry with increasing productivity and increasing wages. Labour needs to understand that balancing business with progressive policies need not be bad for business.

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