30/01/2012 10:11 GMT | Updated 30/03/2012 06:12 BST

Labour Needs to Get Back in Touch With Business

Labour is starting to slip back into the 1990s and even the 1980s in our attitude to business. We need not to, because we are looking increasingly anti-business. And anti-business parties have a nasty habit of losing elections.

In all the furore over Luke Bozier's defection to the Tories last week - perhaps best described as a storm in a hand-held device - important points seem to have gone AWOL. First, as former General Secretary Peter Watt pointed out, the invective directed at Bozier himself has told us perhaps more about the state of the party than about the man himself.

As a national press story, the defection of a former party apparatchik - not even an MP, for heaven's sake - is hardly up there with the euro crisis or the prospect of war with Iran, as you can be sure the man himself would attest. Most of us activists might not go as far as leaving the party, but it's also sad that we can't seem to make the party a comfortable place to be for those less tribal. We need to remember that, outside our membership, many of our supporters - who are the people we need to hold onto to win elections, after all - and probably the majority of the public at large, are closer in their views to Luke Bozier's centrist, less partisan stance than they are to die-hard tribalists like a lot of us.

But there is a more important, second strand, which has rather gone missing in all of this among the party faithful: his reasons for leaving were largely about the attitude of the party to aspiration, and to business.

Last November he, along with former editor of the blog LabourList Alex Smith, launched a pamphlet called Labour's Business, which articulated the vital importance of a differentiating policy agenda on business, focusing on providing the practical help which is lacking from the Coalition, rather than playing to old prejudices within Labour. A second strand deals with the party's uneasy relationship with business, to which I also contributed a little chapter Whilst I share the mild irritation of some that Luke has left this project in mid-flow, it doesn't detract from its importance - in fact, it underlines it.

Labour's drift away from business has had many causes, some perfectly understandable: the inability of some ministers when in government to see conflicts of interest or clear dividing lines between business, government and party; the continuation of the Tory practice of under-regulating the City; the failure of some major organisations in private hands such as Railtrack, Northern Rock and RBS; and the somewhat botched introduction of private capital into the public sector under PFI. But these are the sort of day-to-day happenings which afflict all governments, and it is easy to convert them spuriously into a general malaise, instead of dealing with them as separate problems to solve, one by one.

More importantly, underlying this drift has been an instinctive scepticism about business and entrepreneurship per se; a tendency among party activists to see this anecdotal evidence as incontrovertible proof of what we want to hear: our "aha" moment on what many see as the dubious morals of those fat cats in business. Outside the party, meanwhile, we forget that such attitudes might not be the norm among the country's opinion-formers. And they can end up looking rather scary to the public, many of whom either run their own businesses or are employed by them, and may well be doing very nicely, thank you.

Seen in this light, the shift in emphasis from the Labour leadership towards espousing a gentler form of capitalism is seen as something more which, in all fairness, it likely is not: a fundamental shift back towards Labour's comfort zone of business bad, public sector good. But that is how these signals interpreted: in the downgrading of the party's Business Liaison Unit, which used to look for businesspeople who would back its policy agenda (the 2010 election was notable for the absence of businesspeople who did so). Or in the dearth of MPs with any business experience in the shadow cabinet.

Neither are a few populist headlines constitute a reliable indication of a burgeoning sea-change in attitudes to business among the public, as recent statements from Labour have implied. Furthermore, in the recent comments of David Cameron and Vince Cable, the Coalition has neatly seen to Labour's "good business" agenda, because ill-defined concepts are easy to copy. We cannot insert any of the celebrated Brownian 'dividing lines' between us and them to make it clear where we stand. So, the coalition has copied our idea, has made a few soothing noises to take the wind out of it and will likely kill it in the process. Job done.

Meanwhile Labour's Business points out the vital importance of a sensible, centrist, business-oriented stance, an area where - in small business, or a more active industrial policy, for example - Labour could usefully differentiate itself from a dogmatically hands-off Tory agenda. And, perhaps of equal importance, it underlines the importance of not letting anti-business feeling take root in the party, where the ground has always been fertile.

In short, the work that Luke and Alex started is still an essential step. Having come so far, Labour is starting to slip back into the 1990s and even the 1980s in our attitude to business. We need not to, because we are looking increasingly anti-business. And anti-business parties have a nasty habit of losing elections.