Business needs to get serious about a Labour government
First there was Brexit, then Trump, then Theresa May’s shock General Election result.
Suffice to say, recent events have left pollsters and politicos alike reeling.
Before May’s poor performance at the start of the summer, commentators and consultants had loudly agreed that a Labour government was an impossible outcome.
Read more: Corbyn’s cunning EU plan has ended in abject failure
To many, Jeremy Corbyn was simply unelectable, a lifelong left wing rabble rouser who appeared to have stumbled unwittingly onto the political stage, with a political platform nostalgically transported from the 1970s. A grassroots campaign mobilising the young proved a vote-winner, much to the consternation of Westminster watchers.
This series of events has naturally not gone unnoticed in boardrooms across the country.
As Brighton gets ready for Labour’s annual conference next week, businesses are seriously considering whether a Labour government may be a more likely prospect. Indeed, from exhibition space to the gala dinner, the Labour party conference this year is virtually sold out from a business perspective. This is surely a clear sign of the times.
The thought that should strike next is “what would their manifesto mean for me?”.
This is why we at Portland have just released our publication Labour – a Government in Waiting? Why Business Should Engage with Labour Party Policy. It offers an analysis of the current terrain, and advises chief executives how to work within it.
Polling undertaken by Portland, commissioned from YouGov, reveals that three quarters of business leaders think that a Corbyn government could come about within five years. More than a third believe that this is likely. But worryingly, six out of 10 have made no preparations for such an outcome, while only a third are actively planning for it.
These findings are alarming. Whether or not you believe Prime Minister Corbyn is an imminent possibility, the time to prepare is now.
And the Labour manifesto contains much to worry an unprepared business.
A seven per cent corporate tax increase. A blanket ban on zero-hours contracts, which could hit startups and flexible businesses, and stricter definitions of self employment. Introducing pay ratios for companies with government contracts. Bans on closing bank branches. Restrictions on labour from abroad. Price controls and renationalisation of certain industries. State intervention in business decisions.
And there was even talk of a maximum wage earlier this year, though Corbyn and his team never specified where it would be set.
This is not to say these would all immediately be introduced were Labour to unexpectedly come to power, but these are policies the business community needs to start planning for. While the Fixed-Term Parliaments Act may afford this government and the status quo some protection, that’s hardly reliable in this era of uncertainty.
We are witnessing a new force emerge in politics. It mirrors what we are seeing across the Atlantic, where President Trump creates policy on the move, changing direction with a single Tweet. Previous administrations used the full panoply of revered democratic institutions, but Trump is a creature of the digital age.
Put simply, in this new modern order, Corbyn does not even need to be in power in order to hold power.
This latest incarnation of the Labour party is never happier than when campaigning on a particular issue, which has huge and potentially damaging repercussions for businesses. It has had huge success at pressuring the government and some companies into action by whipping up a public frenzy.
The left has developed an ability to run with issues online and in the media, creating enormous impact. It seizes particular issues and can ignite mass campaigns that go viral within an instant. Businesses now need to be able to respond to this with equal speed and force if they are to protect their reputations.
Pundits were once described as “hedgehogs” by Sir Isaiah Berlin. They focus on one idea, which they sometimes stretch to near breaking point. The better forecasters are instead the “foxes”, who draw their inspiration from many sources and accept the uncertainty of predictions.
To my mind, the lesson learned from this summer is to be “foxier” in our approach. Within an extraordinarily volatile political and economic climate, guesswork or Whitehall gossip cannot be used to plan a business strategy. Instead, businesses need real intelligence, internal monitoring, crisis preparedness, and an acute awareness of the policy landscape.
Corbyn’s future is secure for now, especially after the Labour party committee rule change earlier this week on electing leaders. His supporters’ sole objective, buoyed by the momentum of an election campaign, is to test a weakened government, already facing unprecedented challenges and distractions. Labour insiders believe that the last election was the one Corbyn needed to lose in order to buy the breathing space to prepare for Government. Now, they see him as Prime Minister-in-waiting.
I began by warning of the perils of making predictions. Nonetheless, I will offer one to end with – that the new political season will be as unpredictable as the last.
And so it is now time for businesses to begin engaging seriously with the Labour party and their policies.
Read more: Corbyn dismisses government pay cap measures as “divide and rule” tactics