Labour is regaining the trust of British business.

Labour is regaining the trust of British business.

Under Ed Miliband’s leadership Labour have already made huge strides on the journey from the foothills of our dismal 2010 election failure to the lofty peak of returning to power.

On Tuesday another significant step felt like it was taken as Ed Miliband, Ed Balls and Chuka Umunna addressed around 500 businesspeople at Labour’s Annual Business Reception at the Chartered Accountants’ Hall in the City.

One of the greatest signs of the challenge that faced the leadership team was the extent to which we lost the business vote in 2010. Virtually no significant business figure came out in support of a Labour government at the last election and, even more significantly, a chasm opened between the voting intentions of public and private sector workers with those not working under the umbrella of the state much less likely to vote for us.

While Tuesday was by no means the resealing of the deal between Labour and the country’s wealth creators, it was perhaps the ‘end of the beginning’ of that process.

Meeting businesspeople from across the country, from Norwich to Manchester and from Sussex to Yorkshire I was struck again by the extent to which they are keen to give Labour a hearing now in a way that they wouldn’t have nine months ago.

Chuka Umunna laid out the challenges that faced Labour. The party was listening and learning, but more businesses every day were telling him they didn’t want government to get out of the way, they wanted it to get behind them and support them in the way their international competitors could expect. He recognised that recovery would only come from a vibrant business sector working in harmony with government.

Subsequently Ed Balls was on top form highlighting the areas of agreement that exist between Labour and the government on the need for a credible deficit reduction strategy, but stipulating that the disagreement was about how it was achieved. They have created a flatlining economy with cuts that have been too far and too fast, choking off the growth needed. The public and private sector should be in partnership because both will play a part in getting Britain back on its feet. We will reduce the deficit but through a stable programme of business growth not an overreliance on public spending cuts.

Ed Miliband spoke of his recent encounter with Heather Small of M People who had said she was supporting Labour because she had seen the fear in the eyes of her 20-year-old niece, and recognised how many other young people saw their hopes abandoned by the Tory government. He made the case for why tackling the obscene practices that have existed in the banking sector was a resolutely pro business thing to do.

He stressed how his government would look to support business and why recent policy studies around the British Investment Bank and the review of long-termism demonstrated how Labour wanted to be on the side of the vast majority of businesspeople who contributed towards the success of the nation, while delivering on the bottom line.

He also introduced the special section of the Future Candidates programme which was designed to encourage more businesspeople to represent the Labour party in parliament and on councils across the country.

The feedback from attendees was overwhelmingly positive. Despite the fact that many of them would not consider themselves natural Labour supporters, hundreds waited behind to meet the two Eds and Chuka and to push their particular ideas or concerns about how the British business environment was shaping up.

The final word went to a Shropshire-based accountant who told me: ‘I haven’t voted Labour in quite a while, but seeing those three up there, I have to say they looked like they were serious, I really think they’re going to win.’

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Toby Perkins MP is a member of the shadow business team and MP for Chesterfield

Originally published by Progress

What is the City for?

What is the City for? It is not just a question that I am posing but is a question that the City of London is asking itself at the meetings of various financial think tanks and conferences. It is just as well because the rest of the country - families, small businesses and individuals are all asking it.

Long Finance rhetorically asks ‘when will we know that our financial system is working?’. Of course we can take today’s position as the false positive, meanwhile the financial industry itself offers technical reasons and procedural solutions to each of its failings and suggest that all these faults can be considered separately and discretely. They consider there to be just a few rotten apples, whereas others suggest that it is now the whole barrel that is rotten.

Does it matter now how many apples are rotten? Whether it is some or all, or whether the system can be technically fixed by a few modifications and a bit of extra regulation? Because at the heart of it is an issue of confidence in the entire financial system and of those who run it. For example, how can we persuade people to put money aside for their retirement in such a financial system? Once people pooled their funds and resources to create mutual organisations, they would save together and lend to each other through their own trusted institutions, whether as building societies or mutual insurance companies. The loss of the Mutuals and their disconnection from their grassroots is significant, while their financial resources and reserves may have been squandered, what it seems was also lost was the principles and ethics that underlined them. The fact is that they existed to collectively serve their members (the savers, borrowers and policy holders) and not to exploit them or their communities. Other institutions though not mutual were also founded on similar ethics, for instance Barclays was founded as a Quaker bank. It was very telling that Bob Diamond didn’t know what the Quaker principles were when asked at the Select Committee.

Now the image - and perhaps the reality - is that the banking system exists to enrich those that run it (the bankers, fund managers and the like), not those that it serves and the only control we have it is not through ethics, accountability or principles but just regulation. Therein is the root of our financial crisis. (Further regulation is not the answer as it favours the large not the small).

Instead of endowing members with the profits from its schemes, the image is that the only endowments done are into bonuses. While it is true that we need to reward people for their effort, why is it that banking and the senior public sector are the only areas where profitability and performance don’t seem to matter?

The banking crisis suggests incompetence; the Libor crisis corruption and rate fixing scam on small business (interest rate swaps) suggests exploitation.

On this evidence the banking system doesn’t seem to be there for us or small business. Why should hard working families entrust their hard earned monies to such institutions? We can all see the advantages of prudent saving for old age and the need for insurance and can work through our dislike of the system to make such savings, but not everyone will. This dislike of the system and belief that they are being ripped off is a strong motivator. There is a need to persuade people that institutions can be trusted to look after their money; that they won’t just use it to enrich themselves, but will use it for instance to grow sustainable pensions for them and in that process they won’t be exploiting the struggling small businesses in our communities. Some say it is not in the banks interests to exploit small firms and the market understands the need to act in a sustainable way. In the book ‘The Price of Fish’ they compare the financial system to fishing and point out that it wasn’t in the fisherman’s interest to overfish and ruin the seas, but they did it time and time again.

How close are we to ruin? The fisherman never knew, do we? Do we need a new ethical and principle based revolution? To me that means more mutualisation perhaps at a lower level; failing that at the very least we should go back and implement those original Quaker and Barclay principles that seem to have been forgotten of ‘honesty, integrity and plain dealing’.

Philip Ross

Also published by Long Finance