Will Labour say, “Profit is good”?

Labour’s Business, a collection of essays on how the party can convince voters that it is not hostile to wealth-creation, was published yesterday. Alex Smith and Luke Bozier, who edited it, invited me to the launch to help stretch the spectrum and to encourage the other speakers to be right-wing and still look moderate.

Kitty Ussher, the former Treasury minister, did well, asking:

Do we hate the City? Fine, let’s get rid of it. But let’s realise that we will lose £50bn of tax revenues and lots of jobs. Do we hate people who earn lots of money? Fine, let’s have a 100 per cent marginal tax rate, because that would be what we mean.

Hazel Blears, former local government secretary, disappointed, however. She started by saying that she was sick of using the Co-op and John Lewis as examples of the kind of capitalism with which Labour could be comfortable. Then she went on to praise Morrison, the supermarket company, in her constituency, for hiring young people from local council estates. That is lovely, and she went on to give several other examples of “ethical” behaviour by capitalist companies. But with each example she lent more weight to the idea that capitalism is inherently bad, but can redeem itself by giving up short-term profit for the sake of long-term gain.

Indeed, she went on to call for a “slower capitalism” not driven by quarterly reports and the maximisation of short-term profit, modelled on Germany where everything is long-term, companies are family-owned and they feel that they owe something to their local communities. This is a variant of the Sweden Daydream, and is just another way of wishing that people were nicer to each other and everybody could be happy and rich. Short-term profits are just the net present value of long-term profits. Capitalism is capitalism.

Mark Rowney, who was in the audience, posed the question most starkly: “Could we imagine the shadow cabinet saying, ‘Profit is good’?”

That is number 740 in my series of Questions to Which the Answer is No, and, until it is answered differently, Labour lacks credibility on the economy.

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