What a Labour government would mean for business in the UK | FT


Britain may be just weeks
away from yet another general election, and business leaders
around the world are nervously trying to find out what a
potential Labour government would mean for them. This shadow chancellor
is different. I want you to know,
the greater the mess we inherit the more
radical we have to be. Behind deep divisions over
Brexit and the crisis over anti-Semitism in its ranks,
there’s been less attention on Labour’s radical
economic agenda. Lobbyist Ian Anderson
says his clients, blue-chip international
companies, are hungry to know more, and
in particular about shadow chancellor John
McDonnell and his promise to rewrite the rules
of the British economy. When I’m abroad,
when I’m in New York, or when I’m in Asia there’s
a huge amount of interest in Labour’s policies. What does higher corporate
tax actually mean? What would the change in the
approach to regulation mean? And on the wider
economic agenda, is there a partnership between
business and inward investors to help build Labour’s
infrastructure plans? And would you say that
it’s a positive sense among the business world about
what a Corbyn government would mean? Most businesses are
uncomfortable about prospect of John McDonnell as chancellor. There’s not a lot
of common ground. And whilst John
McDonnell will say that he’s talking to
business, a lot of the time he’s talking at business. Corbyn and McDonnell have
taken much of the limelight. But behind them there’s a large
policy network of leftwing MPs, activists, advisers,
Trotskyists, Greens, pressure groups,
think-tanks, academics… the list goes on. In this film, we meet some
of the faces behind the most radical leftwing policies seen
in Britain since the Labour government in 1945: large-scale
redistribution with taxes on the rich and business,
borrowing for infrastructure, the renationalisation
of water, the railways, and other privatised companies,
with shareholders paid back below the market price, the
gradual transfer of 10 per cent of the shares of every big
company to their workers, strengthening the rights
of consumers, workers, and tenants against
shareholders, landlords, and bosses. And these are only the
current existing policy. There are also ideas
being knocked around for a three-day weekend,
a universal basic income, and the land value tax. And on it goes. In the network of policymakers,
Ann Pettifor, a leading critic of neoliberal
economics, stands out as a longtime adviser to shadow
chancellor John McDonnell. What would you say
to business people? Are they right to
be watching this with some measure of alarm? Yes, if I think if you’re
a rent-seeker, you know, if you’re one of today’s
rentier capitalists, there will be a
lot to worry about. It’s not going to be so easy
to drain valuable public assets of wonderful rent easily. In the future, that
may be the case. But I think most of your
readers will actually look forward to this. Because what they want more than
anything else, I would think, is economic stability
and economic prosperity. As long as we have the
low levels of income that we have now, where we have
the kind of insurrection that is represented by
Brexit and that is very destabilising
in the economy. And what business
people often ask… they kind of see
two John McDonnells. They see a shadow chancellor
who has a very amiable bank-manager manner. There’s also the
John McDonnell who’s suddenly very angry about
bringing down capitalism. Which is the real
John McDonnell? There’s no doubt that
he’s on the left. But when it comes
down to it, John is really pragmatic and
sensible, and sometimes, in my view, a little too
conventional, really. When it comes to
Labour’s ambitious plans for renationalisation one
campaigning group has been very influential among the
Corbynistas, We Own It, founded by Cat Hobbs, who wants
to reverse the privatisations of the 1980s Thatcher era, a
policy that was largely left untouched by Labour
under Tony Blair. Some critics of Labour’s
nationalisation policy suggest that it is very
labour-intensive, time-intensive. Do you think it is the best use
of the time of a radical Labour government? Absolutely. Because what this is
about is taking assets that will make a profit
for the public purse back into public hands. So it means ending the rip-off
that we’ve got right now. It means giving
everybody a fairer deal in terms of our
bills and the money that we’re paying out
for these services. But it also gives us
a really vital tool that we can use in
delivering a Green New Deal, in tackling the climate crisis. Are there other
private-sector industries which you would like
to see nationalised which, at the moment,
are not being discussed? So We Own It is calling
for all public services to be run in public hands. And so what that means is
it means energy, water, the railways, buses, the NHS,
schools, council services, libraries, care work, parks,
all of those things… But what about… …should be… …the defence industry? …in public hands. What about airports? Yeah, I think wherever
there’s a public service. So defence industry,
yes, airports, yes. All of these things
are public services that we don’t have a choice
about relying on, really. We’re not talking about
the whole economy here. So we want to see
a mixed economy. Public services should be run
for people rather than profit. Private companies
and private investors can invest in the
rest of the economy. The chance of these radical
policies becoming reality is being taken seriously
in some quarters. Former head of the Civil
Service, Bob Kerslake has been charged with
advising McDonnell and team on the potential
transition into government. I’m not a member of
the Labour party, nor am I developing
their policies. What I’m doing is
helping them think about the task of
moving into government. And it’s worth saying they
face some real challenges. We have huge social
divisions that are matched by economic divisions. And in my view,
the important thing is that we have a government
that has the courage to see through the
radical responses that are going to be needed. We’re talking about a very
ambitious programme of radical change. But most of the people around
Jeremy Corbyn have not been ministers or running the
government under previous Labour administrations. Does that make it
harder for them? Yes, it is a radical programme. And indeed they have some
who have got experience of government, but not many. And in a way, that’s
not surprising if you’ve been out of
power for nearly a decade. But I think if you look at
the policies, many of them are policies, if
you went to Europe, would not be hugely surprising
– national ownership of the railways, for example. So they’re radical
for the direction that this country has gone
in for the last 50 years. But they’re not so
radical when you look at some other
countries in Europe. But Labour is deeply divided,
and the radical Corbyn agenda has alarmed many
more moderate MPs. In February 2019, it was
enough for Chris Leslie, a former shadow chancellor, to
resign as a Labour MP against what he said was Labour’s
shambolic Brexit policy, anti-Semitism in the party,
and its hard-left economics. Ultimately, it is
anti-capitalist. It’s not about
regulating markets, it’s about overthrowing markets. From my point of view, looking
at a choice of finite amounts of money, are you going to spend
£90bn to nationalise the water industry, or should that £90bn
be used for something more socially productive? But they’ll make the point that
that is covered by the profits that you then get by
owning the water industry. And they would suggest the £90bn
is far too high an estimate. Yeah, but only in an
environment where the market is going to say, oh, yeah,
we’re absolutely fine with you taking assets
below market value. I mean, the idea that a Labour
chancellor is going to go to the market and say, we’d
like to borrow £500bn pounds. Oh, but the person
in front of you, we just sequestered their
assets below market value. Those behind are
going to say, well, we might lend you some money,
but at a much, much higher risk premium. And of course, when the
interest rates increase, who pays the price for those? Ultimately the poorest in
society, or the public services that will suffer as a result. Laura Parker, the national
co-ordinator of Momentum, the grassroots movement founded
four years ago to support Jeremy Corbyn, believes
that Labour can move beyond the current rows over Brexit and
anti-Semitism and its election defeat in 2017 to win the next
general election on a radical platform. Do you think the movements
around Jeremy Corbyn, Corbynomics, will have a life
beyond the current leader? Yes, absolutely. And I think that now
we have mainstreamed this thinking about
economics in particular, throughout the party. We’ve got a new generation
of people in parliament. I mean, I don’t think
it’s that, you know, when Jeremy takes
off to his allotment, suddenly there’s nobody left. You know, we’re not
stuck for people. I mean, you know FT readers
are probably pretty smart folk. And smart folk will
have understood that we can’t continue as we are. Whenever that general
election comes, we’re ready. We’re ready to
campaign for victory. We’re ready for government. We’re ready to build the future. We’ll be proud to call that
future socialism, solidarity. Some pundits believe Labour
has little chance of winning a general election, not least
because of Mr Corbyn’s low opinion poll ratings. But elections are unpredictable. In 2017, Labour started
out 24 points behind the Conservatives, but ended
up winning 30 seats and almost gaining power. Business leaders in the UK and
around the world are looking very carefully to see what a
Labour government could mean.

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