A new ‘prawn cocktail’ offensive

City of London

We need a ‘prawn cocktail’ offensive for the 21st century – a ‘scallops and celeriac purée’ offensive, a ‘baked figs and goats cheese’ offensive – anyway, you get my point. In the 1980s and 1990s, energetic Labour spokespeople led by then City minister Tony Blair toured the private dining rooms of the City trying to decontaminate the Labour brand with leading business people. Their success was part of the foundation of New Labour economic and electoral success in the next 20 years.

The task now is more wide-ranging, but equally significant for future policy and electoral success. It is to put the policy flesh onto the skeleton of ‘one nation banking’ and ‘responsible capitalism’ outlined by Ed Miliband in recent months. It is also to ensure that we don’t find ourselves in 2015 in the place that David Miliband reminded us about in his New Statesman piece this week when he said: ‘At the last election not a single major business endorsed Labour, and we cannot afford that again.’

I confess to having been sceptical about the language of ‘predators and producers’ that Ed used in his conference speech last September. However, there is no doubt that he has created the ground that both Cameron and Clegg have subsequently moved onto. The challenge now is to avoid the trap that David Cameron seems to be falling into. His nudge and a wink to strip Fred Goodwin of this knighthood and to reduce Stephen Hester’s bonus are populist but lack substance and have prompted a business backlash. Ed recognised this danger in his understandably overshadowed speech last Friday and rightly called these events the beginning, not the end, of the debate

This week, Labour will press on with its debate in parliament demanding changes to the bonus culture and reinstating the bank bonus tax. Calling this vote is credited with forcing Stephen Hester to give up his bonus. These type of parliamentary set pieces are one of the few tools that oppositions have to grab the initiative – it has certainly worked in this case. But the other opportunity in opposition is to carefully think through the response to new challenges, to build alliances, to listen and reflect – away from the day to day pressure of government. That must be the task for our new ‘prawn cocktail’ offensive.

There are plenty of people with experience and interesting things to say who will want to be part of moving on from the witch hunt to the reform. On the same day I heard both Sir Philip Hampton and Nicola Horlick expressing concern about rewards in the financial sector. Major manufacturing CEOs in this country have long felt that neither the banking system nor the coalition takes them seriously. It’s not just the economic climate which stifles innovation and growth among small businesses.

Many party members and supporters will have much to contribute to the business policy review already announced, but we must go beyond those who already support us. I want to see Ed, Ed, Chuka and Rachel on the telly, but I also want them to be in private dining rooms across the City and beyond – making the contacts, generating the policy ideas and building the consensus which will translate into a serious new business and industrial policy for the next Labour government. Bon appétit.

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Jacqui Smith is former home secretary and writes the Monday Politics column for Progress

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Photo: Felissy

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  • Bob

    we cannot afford that again

  • Dermot Finch

    Agree with this – I blogged similar points the other day, mentioning Labour’s pre-1997 charm offensive.

    http://fishburn-hedges.typepad.com/dermot_finch/

  • http://twitter.com/cping500 cping500

    Rachel’s iron fist in a her velvet glove handing them out perhaps.

    But what if they all smile politely and reaffirm their commitment to shareholder value, and agency theory and say excuse me I am off to a better hole which there always is, but before I go I will put up some posters about vouchers so your school can have more computers, footballs etc (funded by our charity donation to which the Treasury will donate 20% and give back a cut too to us too. (there is no limit on gift aid.)

    Nice capitalism needs a new narrative, not just a pink marie rose sauce smeared over it

  • Harry Goldstein

    It seems to me that our problem is that we don’t have an up-to-date analysis of what modern capitalism is, how it works, and what needs to be changed. Hence we are caught on the false dichotomy of being ‘pro’ or ‘anti-business’ – depending on what we think we can get away with.

    We need to recognise that on the one hand modern ‘managerial’ capitalism has democratised shareholding (all of us with pension schemes or other savings are in effect shareholders) and that this has made the old anti-capitalist rhetoric unworkable. At the same time this trend has ceded power to an increasingly unaccountable managerial class who can get away with awarding each other massive pay increases. The people who manage our savings for us – the top executives of the pension/ insurance/ fund management companies – are of course members of this same class, and unlikely to rock the boat.

    So how do we both put ourselves on the side of real business entrepreneurship and at the same time challenge this self-perpetuating culture?

    Here’s one (admittedly totally uncosted) idea. How about if we were to propose a plan to abolish (yes, abolish) corporation tax for all companies whose highest-paid employee earned less than say £200k p.a.?

    At a stroke we would have taken virtually all small and medium sized businesses out of corporation tax, and at the same time provided a massive disincentive to companies to increase their executives’ pay beyond the set limit.

    Arguably it wouldn’t directly impact the largest corporations. But it would boost their smaller, leaner (usually more innovative) competitors. At the same time it would create a clear downward pressure on executive pay as a whole.

    And our opponents could hardly claim that a measure that took so many businesses out of corporation tax was ‘anti-business’.

    How about it, shadow cabinet – any thoughts?

  • bleaeeuccghtt !

    vomit,like the ancient Romans we got to the vomit stage,sick it up so you could start eating again you big fat Capitalist erm people, and who did that land on ? who had to clear it up ? So yeah,careful what you eat this time,and who.

  • Anonymous

    Jacqui Smith – the Hyacinth Bucket of politics!