Labour’s plan for business
John McDonnell and Jon Trickett laid out the Party's strategy at a recent Prospect event
There will be an early general election—and so Labour must get its economic plan together fast. This plan must address three economic imbalances afflicting Britain, and will include a plan for industry. A bi-partisan consensus must be reached on how Brexit should be handled. These are some of the key points that were made at Prospect’s business reception at the Labour Party’s 2016 conference on Sunday, 27th September.
John McDonnell, Shadow Chancellor and key ally of Jeremy Corbyn, stressed that Labour was on the same page as much of Britain’s business community—but admitted the Party does not yet have a fully-formed plan for business, saying: “There’s a sense of urgency about us putting our policy programme together very quickly over the next six months.” Jon Trickett, Shadow Business Secretary, announced that Labour is about to unveil the first components of “an active industrial strategy.” He told guests that Britain’s economy has an imbalance in the ways in which labour is rewarded, as well as between different sectors and different regions. Adam Marshall, Acting Director General of the British Chambers of Commerce, stressed that British business benefits from a strong Opposition as well as a strong government.
After introductory remarks by Prospect‘s Editor, Tom Clark, McDonnell, speaking the day before his official speech to the conference, explained that the “urgency” behind the party’s plan for business is down to the expectation of an early election. Referring to Theresa May’s assurances that there will be no such thing, McDonnell said: “We don’t really trust Conservative leaders on their decisions like that.”
On Brexit, he said that Labour wants “free access to the Single Market” and access to the European Investment Bank. McDonnell said he was highly sceptical of “exaggerated claims before the referendum about what would happen to the economy” as “it was turning people off the debate.” He argued that a strategy for managing Brexit must be agreed upon by both Labour and the Conservatives, so that it “straddles more than one parliament.”
He said that Labour had been distracted by its leadership election—”As you all know it’s been a quiet few months”—but that, with the election out of the way, now is the time to build a viable business plan. He argued that Britain needs long-term, creative investment into infrastructure—including digital infrastructure—and housing. He emphasised that the Labour party is “really on the same page” as business on “a large number of issues.”
Labour’s economic advisory council has been the subject of some controversy over recent months, with several high-profile economists resigning from the board. But McDonnell quoted a board member, Mariana Mazzucato, when he said that Labour wants to build an “entrepreneurial state.” One which “works for the wealth creators” but which is “sustainable economically as well as environmentally.” McDonnell also thanked economist Joe Stiglitz for his participating on the council—read our recent interview with Stiglitz here.
McDonnell emphasised the democratic nature of Labour’s policy-making, claiming that hundreds of people were turning up to its meetings on economic policy, and also told the business crowd that “We’re trying to ensure the ideas you have from your own professions feed into our policy-making.”
Trickett, like McDonnell, said that Labour is in agreement with much of the country’s business community. He said “It’s clear to everybody you cannot have an increasingly socially just society, and services that are properly funded in the public realm, without a growing and dynamic economy.”
He criticised Theresa May’s delay in getting a new industrial strategy for Britain up and running. “May announced she would have an industrial strategy of her own, but we haven’t seen much evidence of that yet.” He continued: “But over the next couple of days we’re going to be publishing the first step on the road to a new industrial strategy, we want you all to be involved.”
While he argued that “There are many reasons to celebrate what happens in industry in our country today,” he identified three big economic problems Britain is facing. First, “executive pay has gone up by 10 per cent in a year, while the rest of us, the middle class and other people too, have had their incomes static for too long.” He then bemoaned “sectoral imbalances” in our economy. Some sectors are doing very well, Trickett argued, but “there are many sectors of our economy which are not doing well. I notice that in 1970, more than £1 in every £4 was in manufacturing, now it’s only £1 in every £10.”
Trickett then took aim at the “spatial dimensions of these imbalances”—the fact that “there are large swatches of this country that are not doing as well as others.” He said: “In London, between 2010 and 2014, six times as many jobs were created as were created here in the whole of the north west.”
Chambers argued that business needs Labour to be a strong Opposition as the economic issues we face “deserve strong, rational debate.” He stressed that, after Brexit, business needs cross-party assurance that EU workers in firms across the country will be able to keep working in Britain. He noted the importance of “getting our skills base and productivity up,” as well as “keeping confidence going” in the British economy. He concluded that “stability, clarity and action” are the watchwords for British business.”
McDonnell concluded his remarks, saying that he was “grateful” for Prospect and that he hoped to maintain dialogue with business through these pages. Trickett concurred, saying “Prospect is an outstanding example of a serious magazine, discussing in a serious way, the issues that face our country.” There are some matters, then, on which the Labour Party is not split.
Prospect hosted this event at Revolution, Albert Dock, Liverpool, as part of its programme for the Labour Party’s 2016 conference. It ran with the support of ACCA, BCC, EEF, FSB, ICAEW, IoD & IPSE.
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