What We Get Wrong When We Say Labour Is Anti-Business

Would Corbyn and McDonnell be as free market as Blair and Brown? No, but there's much for business to like in the party's economic plans
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Labour’s plans are generally portrayed as being anti-business. Whilst there is no doubt that some of the plans are very radical, the party still has a place for business and actually needs the private sector.

There is always less information around the policies of opposition parties. They aren’t under the same spotlight as government and logistically just have much fewer people to help develop and populate policy. But Labour is working hard behind the scenes to get ready for government. They release consultation papers, have commissions in place, have Sir Bob Kerslake, the former Head of the Home Civil Service, helping them plan for an orderly transition into Government and have said they are working on draft legislation so they can get moving quickly.

We also have the 2017 election manifesto which will be the foundation of the next manifesto as well.

There will be much for business to like in Labour’s approach. The Party is committed to investing half a trillion in capital projects. Half of that, £250billion, will come from ‘the state’ mainly it seems through the National Investment Bank, and a network of regional development banks, with the other £250billion from the private sector.

This may come as somewhat of a surprise as despite what the media are saying, the party sees a key role for private sector money.

Fundamentally, investment in infrastructure remains a priority for the Labour Party. It is looking at spending the money on both new projects but also upgrading existing infrastructure across energy, transport and digital infrastructure, roughly over the next 10 years to help ‘upgrade the economy’. Many of the schemes being suggested will also deliver on the climate change agenda as well.

Much of the ‘anti-’ private money narrative has come about for two main policy reasons – the abolition of PFI and nationalisation.

In the party’s view, PFI lumbered the state with huge long-term interest bills whilst the private sector contractors carried little risk. So any future arrangements want a better balance between risk in the public sector and profit in the private sector. And don’t forget that the current Conservative Government is abolishing PFI as well.

Labour claims the reason for the UK’s creaking infrastructure networks is due to decades of privatised mismanagement, and so plans to bring rail, water and energy into public ownership.

Detail is, as in other areas, a little lacking so quite how ‘anti-’ private sector the plans are remain to be seen. The private sector could still have a sizeable role in delivery, if not overall control.

And despite what many may think about the impact of nationalisation or the benefits that privatisation has brought, the public like plans for nationalisation. Not so with business groups of course.

Characterising Labour as just a ‘tax and spend’ party brings with it negative connotations. Instead, the steps they want to put in place will help support businesses the party would contend. The lower tax agenda may help some but it undermines many other businesses. Instead, Labour will deal with infrastructure, housing, and skills that supports business. By dealing with cost of living issues, they can actually reduce the overall burden on business.

Labour needs the private sector if it is to deliver on their plans. Whilst some of their proposals, such as employee ownership, need considerable work, the Conservatives too are looking at similar types of policies. The Conservatives have been interventionist and it wasn’t a Labour politician who said ‘expletive business’. We are not talking about a clear Conservative/Labour divide.

Would Corbyn and McDonnell be as free market as Blair and Brown? No. But neither are the Conservatives.


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