Imaginary Friends
I enjoyed this article by Philip Collins in The Times which delivers a pretty severe critique of Labour's policy words business and wealth creation which has struggled to rise above the level of student politics.
But the sting is in the tail and the image of Ed Balls, a major player if Labour were to win the general election, turning up for a Newsnight interview accompanied only by his imaginary friend.
Miliband is just going through the motions
By Philip Collins - The Times
Labour’s business policy is in tatters because voters have rumbled the party leader’s lack of interest in wealth creation
This was a fight that Ed Miliband picked and is now losing. In September 2011 the Labour leader gave an intellectually bereft speech that rested on a spurious distinction between the cops-and-robbers of the business world, the producers and the predators. He has followed it, periodically, by indicating the identity of the predators — banks, energy companies, landlords and rail companies. This week, British business bashed him back and it was a display, on both sides, of such avoidable stupidity.
Stefano Pessina, the chief executive of Alliance Boots, was ill-advised to start sounding off about politics. Stuart Rose, the former boss of Marks and Spencer, was parading a cliché when he said Ed Miliband was a 1970s throwback. Lord Jones, a trade minister in Gordon Brown’s government, showed an alarming failure to grasp the nature of markets in his silly rant against regulation. It was enough to vindicate a senior Tory of recent vintage who is fond of saying that, though he very much likes business, he can’t stand businessmen.
However, for all that there was a provocation, and for all that the animus of business figures against Labour is more about the mansion tax and the top rate of income tax than they would like to admit, Labour cannot afford to react as peevishly as this. Rather than resort to name-calling, it would have been better simply to point out that if the unhappy business leaders valued Britain’s continued membership of the European Union, as they do, they might consider voting for a party that unequivocally agreed.
It would be easy to conclude that Labour does not understand business, but the truth is more complex. The irony, lost in the dispute, is that the relationship between business and government is the only arena of policy in which Labour has anything serious to say. The early campaign skirmishes have revealed Labour’s NHS pitch to be a howl of sentimental agony and its tuition fees policy to be a college bar whine. On the economy Labour has both a viable critique of the present and an outline for the future.
The critique is that Britain has a productivity level 20 per cent below the G7 average, a trade deficit higher than any other industrial nation and a dire savings rate. The economic recovery, on which the Conservatives are betting the election, is based not on the promised export surge but on consumption, household debt and a housing market bubble. On investment, Britain ranks 159th in the world, behind Paraguay and Mali.
The Labour picture of the future is a supply-side revolution. It involves higher infrastructure spending, on which Britain lags behind the OECD average, and an emphasis on science; “less financial engineering and more real engineering” as Peter Mandelson put it. It means that finance capital would take a longer view, which any FTSE 100 chief executive would agree with. It means Britain has to train its workers better. Tony Blair used to say that he could declare war on any nation without being noticed so long as he did it in a speech entitled Meeting The Skills Challenge. Productivity will never improve without better training.
This is not the work of left-wing crazies. Take the following three extracts and ask yourself which member of the Miliband entourage is being quoted. The first line is “We find that inequality is bad for growth . . . in and of itself”. Second, “Adam Smith famously spoke with equal conviction of the dangers of market manipulation as he did of the invisible hand. The experience of 2008 shows that the complexity of human motivation and greed can never be left to the market to deal with”. The third argument is this: “In all developed western countries we face today a major economic challenge. How does the state create the conditions that enable firms to upgrade and move into higher-value-added products and services?”
We have just heard from, respectively, the IMF, the Archbishop of Canterbury (formerly the senior oil executive Justin Welby) and David Sainsbury, family business chief, Labour science minister and author of Progressive Capitalism. Each of these extracts has two relevant characteristics. The first is that, back in context, each thought was surrounded by sincere praise for the dynamism and enterprise of capitalism. The second is that, in each case, the credentials of the speaker as a friend of wealth creation command our respect.
Ed Miliband could have struck this balance, and thus gained that status, but has chosen not to do so. He might have gone to Davos to deliver a lecture on the importance of a free trade deal between Europe and the US but he didn’t. When he talks about higher pay he could have chosen to describe it as the way to keep the welfare bill down but he never does. He could say that the worst thing about inequality is that it drags down growth.
Instead, he casts the point in moral terms of duty and justice. Rather than say prices will fall at his command he could have described energy and banking markets as not competitive enough. When David Sainsbury uses the term “responsible capitalism”, you listen because you think he believes in both words. When Ed Miliband says the same thing, you know that the first term is admonishing the second.
Meaning is conveyed as much in tone and nuance as it is in overt content. There is a sense of going through the motions about Mr Miliband before a business audience in public. In private, tales of his bored inattention are common. A leader more in tune with wealth creation could have cast his mission as saving capitalism from itself. Mr Miliband could have waived Messrs Pessina, Rose and Jones away with a quote from Keynes in The End of Laissez-faire: “Devotees of capitalism are often unduly conservative and reject reforms in its technique which might really strengthen and preserve it”.
It is common to say that Mr Miliband’s approach is a break from the heady days of 1997 when business fell over itself to support Labour. So it is too but the facts have changed and Labour has been right to change its mind.
I have no doubt at all that, if Tony Blair were leader of the opposition after a major financial crash, he would be saying many of the things about markets that Ed Miliband is saying. He would just sound a bit more like David Sainsbury when he said it. He would be relishing a fight with the Tories but not so keen on a scrap with Boots and Marks and Spencer. And that would mean there was no chance that his chosen chancellor would turn up for a Newsnight interview accompanied only by his imaginary friend Bill Somebody.
Labour’s business policy is in tatters because voters have rumbled the party leader’s lack of interest in wealth creation
This was a fight that Ed Miliband picked and is now losing. In September 2011 the Labour leader gave an intellectually bereft speech that rested on a spurious distinction between the cops-and-robbers of the business world, the producers and the predators. He has followed it, periodically, by indicating the identity of the predators — banks, energy companies, landlords and rail companies. This week, British business bashed him back and it was a display, on both sides, of such avoidable stupidity.
Stefano Pessina, the chief executive of Alliance Boots, was ill-advised to start sounding off about politics. Stuart Rose, the former boss of Marks and Spencer, was parading a cliché when he said Ed Miliband was a 1970s throwback. Lord Jones, a trade minister in Gordon Brown’s government, showed an alarming failure to grasp the nature of markets in his silly rant against regulation. It was enough to vindicate a senior Tory of recent vintage who is fond of saying that, though he very much likes business, he can’t stand businessmen.
However, for all that there was a provocation, and for all that the animus of business figures against Labour is more about the mansion tax and the top rate of income tax than they would like to admit, Labour cannot afford to react as peevishly as this. Rather than resort to name-calling, it would have been better simply to point out that if the unhappy business leaders valued Britain’s continued membership of the European Union, as they do, they might consider voting for a party that unequivocally agreed.
It would be easy to conclude that Labour does not understand business, but the truth is more complex. The irony, lost in the dispute, is that the relationship between business and government is the only arena of policy in which Labour has anything serious to say. The early campaign skirmishes have revealed Labour’s NHS pitch to be a howl of sentimental agony and its tuition fees policy to be a college bar whine. On the economy Labour has both a viable critique of the present and an outline for the future.
The critique is that Britain has a productivity level 20 per cent below the G7 average, a trade deficit higher than any other industrial nation and a dire savings rate. The economic recovery, on which the Conservatives are betting the election, is based not on the promised export surge but on consumption, household debt and a housing market bubble. On investment, Britain ranks 159th in the world, behind Paraguay and Mali.
The Labour picture of the future is a supply-side revolution. It involves higher infrastructure spending, on which Britain lags behind the OECD average, and an emphasis on science; “less financial engineering and more real engineering” as Peter Mandelson put it. It means that finance capital would take a longer view, which any FTSE 100 chief executive would agree with. It means Britain has to train its workers better. Tony Blair used to say that he could declare war on any nation without being noticed so long as he did it in a speech entitled Meeting The Skills Challenge. Productivity will never improve without better training.
This is not the work of left-wing crazies. Take the following three extracts and ask yourself which member of the Miliband entourage is being quoted. The first line is “We find that inequality is bad for growth . . . in and of itself”. Second, “Adam Smith famously spoke with equal conviction of the dangers of market manipulation as he did of the invisible hand. The experience of 2008 shows that the complexity of human motivation and greed can never be left to the market to deal with”. The third argument is this: “In all developed western countries we face today a major economic challenge. How does the state create the conditions that enable firms to upgrade and move into higher-value-added products and services?”
We have just heard from, respectively, the IMF, the Archbishop of Canterbury (formerly the senior oil executive Justin Welby) and David Sainsbury, family business chief, Labour science minister and author of Progressive Capitalism. Each of these extracts has two relevant characteristics. The first is that, back in context, each thought was surrounded by sincere praise for the dynamism and enterprise of capitalism. The second is that, in each case, the credentials of the speaker as a friend of wealth creation command our respect.
Ed Miliband could have struck this balance, and thus gained that status, but has chosen not to do so. He might have gone to Davos to deliver a lecture on the importance of a free trade deal between Europe and the US but he didn’t. When he talks about higher pay he could have chosen to describe it as the way to keep the welfare bill down but he never does. He could say that the worst thing about inequality is that it drags down growth.
Instead, he casts the point in moral terms of duty and justice. Rather than say prices will fall at his command he could have described energy and banking markets as not competitive enough. When David Sainsbury uses the term “responsible capitalism”, you listen because you think he believes in both words. When Ed Miliband says the same thing, you know that the first term is admonishing the second.
Meaning is conveyed as much in tone and nuance as it is in overt content. There is a sense of going through the motions about Mr Miliband before a business audience in public. In private, tales of his bored inattention are common. A leader more in tune with wealth creation could have cast his mission as saving capitalism from itself. Mr Miliband could have waived Messrs Pessina, Rose and Jones away with a quote from Keynes in The End of Laissez-faire: “Devotees of capitalism are often unduly conservative and reject reforms in its technique which might really strengthen and preserve it”.
It is common to say that Mr Miliband’s approach is a break from the heady days of 1997 when business fell over itself to support Labour. So it is too but the facts have changed and Labour has been right to change its mind.
I have no doubt at all that, if Tony Blair were leader of the opposition after a major financial crash, he would be saying many of the things about markets that Ed Miliband is saying. He would just sound a bit more like David Sainsbury when he said it. He would be relishing a fight with the Tories but not so keen on a scrap with Boots and Marks and Spencer. And that would mean there was no chance that his chosen chancellor would turn up for a Newsnight interview accompanied only by his imaginary friend Bill Somebody.
