By John Pickard
The new Labour government, like any Labour government, has a choice. It can challenge the vested interests of capitalism, the big banks, finance houses and industry, to carry through policies in the interests of the big majority of the population. Or, it can bow the knee to those same interests, in which case any minor reforms it might make will be eclipsed by the drive for rent, interest and profit. The government, in this second case, would not dictate to the economy; the capitalist economy would dictate to the government.
Just how much the interests of big business have penetrated the upper layers of the Labour Party leadership was revealed by an excellent article on the website of openDemocracy, an international media platform that campaigns for openness and transparency in government. The article, published on July 9, is a ‘must-read’ for every Labour Party and trade union activist.
The article deals particularly with the period leading up to the general election, when it became clear – particularly after the short-lived but disastrous Liz Truss premiership – that Labour was going to form the next government.
Hundreds of meetings between lobbyists and Labour leaders
openDemocracy conducted a detailed analysis of all of the reports and what information was in the public domain, to look at meetings between shadow ministers and lobbyists or other representatives of business. It is important to add that most of what were shadow posts have now been confirmed as ministerial posts in the new government.
Over those months before government the article explains, “Weapons manufacturers implicated in human rights abuses in Gaza bent the ears of would-be defence secretaries. Incoming climate change ministers met with oil companies. Labour ministers who will now be responsible for curbing the excesses of the City of London were wined and dined by financial services executives. Public affairs firms representing asset managers, the tobacco industry, gig economy firms and tax-avoiding mega corporations secured meeting after meeting after meeting with future ministers.”
Because at this point, we were dealing with shadow ministers, there was no legal requirement for official records or published lists of meetings, briefings, dinners, roundtables and visits with lobbyists. And there were hundreds of them. Nevertheless, it was clear that policy was being written, not by Labour MPs with shadow portfolios, but by businesses and lobbyists.
Policy written by lobbyists and business representatives
Lobbying companies spent millions providing pro bono services to shadow ministers, giving money to their private offices – heaven forbid that they should give money to a Labour Party constantly sending begging letters to its membership. Some companies ‘seconded’ their staff to work with shadow ministers, no doubt to help in the process of refining policy.
Take the example of Tulip Siddiq. She is Economic Secretary to the Treasury and Labour MP for Hampstead and Highgate, currently under investigation by the parliamentary standards watchdog, for ‘forgetting’ to register £10,000 income from her properties in London. We might add in passing that the vast majority of workers in general would dearly love to have so much income that they could accidentally ‘forget’ ten grand.
Siddiq, the point is, was in that same post as a shadow minister and for that reason she was wined and dined liberally by the financial sector and its various lobbyists. Not that she didn’t enjoy it. “I have worked closely with TheCityUK and its members in recent years,” Siddiq gushed in one of her posts on Linkedin, “to formulate the Labour Party’s policies for the financial and professional services sector.”
We see quite clearly from this post where Labour policy comes from. Since so many shadow posts have become ministerial posts, it means that businesses and finance are fully integrated into the schedules, meetings and daily activities of Labour ministers, far more, for example, than trade union leaders.
A new version of the Private Finance Initiative
Altogether, the openDemocracy article explains, “Labour’s frontbench team, including Siddiq, has met with City lobbyists on more than 20 occasions in the past year – not counting its significant engagement with the British Private Equity and Venture Capital Association, which openDemocracy revealed last month. BlackRock, Macquarie, HSBC, Bloomberg, Lloyds, Brookfield Asset Management and Blackstone are among firms to have secured access to leading members of the new government, including Starmer, Reeves, Reynolds and the chancellor of the Duchy of Lancaster, Pat McFadden.”
What is particularly alarming is that Rachel Reeves is going to depend on the private sector to promote investment in the economy. Like her predecessor, Gordon Brown, she wants to promote investment, without pushing up government expenditure. Brown’s answer was turbocharging the PFI system – the Private Finance Initiative – to build schools, hospitals and other public facilities.
The PFI has turnout out – as was predicted at the time – to be a massive rip-off, a way for the private sector to squeeze out payments, often over thirty years or more, that added up to many times more than their initial capital investment. It is still a huge drain on the NHS and public expenditure today, amounting to billions of pounds.
Is this what trade union members really want?
As the openDemocracy article makes clear, there is a very real danger that Rachel Reeves is going to launch what is, in effect, PFI Mark II. Mick McAteer, a former board member at the Financial Conduct Authority and now a campaigner for economic social justice at the Financial Inclusion Centre, told openDemocracy that he “is increasingly concerned” that the government’s relationship with business will amount to the same as PFI.
The government is setting up “advisory panels” to look at the kind of investment it wants and where it needs to be deployed. The trouble is, they are composed of executives from big financial institutions, and businesses. “One of them, the National Wealth Fund Taskforce”, openDemocracy explains, “is headed by Mark Carney, the former Bank of England director general who now works for Brookfield Asset Management. The other, the British Infrastructure Council, includes senior figures from investment firms such as M&G and BlackRock.” As Mick McAteer says, “There’s a reason why they want to be on this infrastructure council, they’re not charities”.
Labour leaders offering a Charter for Big Business
If these big companies are ‘cooperating’ with government to plan investment, it is only so that they can get a slice of the pie for themselves – and that necessarily will mean easy profits for their shareholders. Like PFI before it, the new investment boards will guarantee, over the life of a parliament, a shift of wealth from the public sector to the private – and that inevitably spells cuts in living standards for workers.
A question has to be asked to the leaders of the trade unions affiliated to the Labour Party and it is this. Is this what your members want? Does this reflect the views expressed in your union conferences – on PFI, for example – over the last fourteen years? Is this why they pay a political levy to Labour? We doubt it very much, and we would urge trade union members, particuarly in the big four affiliates, Unite, UNISON, USDAW and the GMB, to demand that their leaders oppose this new Charter for Big Business.
We will see, in the coming months and years, how much workers and their families will have to pay for the Reeves/Starmereconomic strategy. Those trade union leaders who have backed Labour’s right wing faction for four years – providing support without which the right would not have been able to push the party so far to the right – will be put on the spot by their members. It cannot come a moment too soon.
The full openDemocracy article, which is well worth reading, is here.
