Labour and business - time to get it right
It really is time for Labour to think afresh its relationship with business. As we renew our approach and our policy agenda, economic and business policy is a prime candidate for new thinking.
Some approaches we've adopted to business:
- It generates jobs, which is good, and pays tax revenues which we can use to fund education, health, and other social policy areas, which is also good.
- It's great, after all look at all these entrepreneurs and their go-getting ways.
- It tends to exploit workers and others and at best is a necessary evil.
OK so some exaggeration. But at some point in government Labour seemed to be less clear why businesses are a good thing. Yes they do generate jobs and yes those tax revenues are very useful indeed. And sure, some do exploit people and that's what workplace legislation has been about and also what much of the Warwick Agreement between Labour and unions was about too. In addition, Labour made a different mistake especially in the early years of the last government - we focused too much on high-profile businesspeople who were not really that representative of the business sector as a whole.
But business can be a good thing in its own right too. It is a place where human beings exercise their in-built creativity. It can be a place of great satisfaction for people.
Moreover, it doesn't exist in isolation. Business confidence is a subjective thing and it's pretty low at the moment. Despite interest rates being very low, business investment seems to be taking a while to pick up (the Bank of England worried about this recently). All the talk about austerity is not helping. But government can help in two key ways:
- Maintain investment in infrastructure to reduce the costs of doing business in the UK;
- Establish a clear, simple, tax regime for business to reduce uncertainty in business decisions.
There's more we can do, but that would be a good start.