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Spectator
6 days ago
- Business
- Spectator
What is there to be optimistic about for British business?
In this season of scant corporate news – a Ryanair rant against the French here, a new BP oilfield there – it's hard to know what business leaders are thinking about the cold months to come. Until, that is, you read a survey conducted last month for the Institute of Directors. Given that I'm writing from France this month, I'd call it an absolute croissant-dropper. The nub is that 639 UK businesses, large and small, report 'optimism in prospects for the UK economy' at -72, lower even than their darkest pandemic sentiment at -69 in April 2020. Export hopes and investment intentions are down, wage expectations are sharply up and, unsurprisingly, headcounts are set to fall. No less than 85 per cent of respondents believe 'government policy so far will be unsuccessful in driving up economic growth'. Significantly, this isn't just traditional anti-Labour boardroom sentiment: the confidence index spiked in positive territory immediately after Sir Keir Starmer's election victory. But it plunged after Rachel Reeves's October Budget and is now at its lowest since the series began in 2016. Many firms are 'struggling to plan amid a cacophony of risk', adds the Institute's chief economist Anna Leach. 'The government must urgently quash rumours of further tax rises for business this autumn, and accelerate planning reforms and deregulation.' To which Downing Street spinners might respond, 'Who listens to the diminished IoD these days?' But then again, who else out there is trying to interpret the exigencies of hard-pressed business to Labour's cabinet of incompetents and union toadies? Where are they now, the 121 'business leaders and investors' (albeit many we'd never heard of) who signed a pre-election letter last May endorsing Labour's plan for growth which so rapidly turned to dust? The bitter truth is that this is the least business-savvy government for the past 50 years. And if a cross-section of frontline corporate chiefs are as utterly disheartened as the IoD survey suggests, things can only get worse. Airport scuffle I hesitate to wade into an airport scuffle between two entities I admire, namely Ryanair and, in a very broad sense, the French Republic. But the airline claims that 36,000 of its flights between January and July suffered delays caused by mismanagement and strikes in French air traffic control. It also says that a hike in 'solidarity tax' on short-haul fares from €2.63 to €7.40 has rendered many French routes uneconomic, necessitating a 750,000-seat cull for the coming winter and further cuts in 2026 that will 'leave French regional airports half empty' – where it might otherwise have invested $2.5 billion for a doubling of passenger numbers. Normally I'd cheerlead for Ryanair here, but its stand-off includes the total closure of services to two airports, Bergerac and Brive, I use often – and I won't be taking private jets instead, since they now incur a tax of €420 per passenger. Perhaps Donald Trump's special diplomatic envoy Steve Witkoff could usefully be re-routed to negotiate a peace settlement. Shape-shifting BP Even the most ardent climate-change activist – though perhaps not Ed Miliband – should admire the resilience of BP. The energy giant has announced a major oil and gas discovery in the Santos basin off Brazil following finds in Trinidad and north Africa and, in defiance of Miliband, the reopening of the mothballed Murlach field in the North Sea. This is the company that suffered huge flak for its Texas City refinery fire in 2005 and Deepwater Horizon rig explosion in 2010, took write-offs of $24 billion on its exit from Russia in 2022 – and declared a pivot towards renewables which it has lately abandoned in favour of lots more oil and gas. Meanwhile its share price stands lower than 20 years ago, as does its reputation among peers, summed up by a rival director as 'leaden-footed, high-cost and over-bureaucratic'. Just as the once world-scale Royal Bank of Scotland has shrunk to a string of north-of-the-border branches, so by rights BP ought to have survived as little more than a filling-station logo. But it's still a global player – and that shape-shifting power of self-renewal is, for me, what makes the big corporate world such a fascinating field of study. The hat man's lament The hat merchant of Monpazier is so lugubrious, despite selling my party several sunhats then inviting himself to join us for a beer, that I wonder whether he might be president of a French branch of the Institute of Directors. Consumer spending really is flatter than a flat cap this summer, he tells me, especially by the tribe of campeurs hollondais who are the paradigm of tight-fisted tourism in these parts. And as a purveyor of cheap baseball caps from India and pricier Panamas from Ecuador, he's a tiny cog in a global trade machine that's spluttering under the onslaught of Trump's tariffs and the retreat of globalisation. So his doom-laden tour d'horizon is not without cause. It rhymes with reports that unemployment for French 15- to 24-year-olds persists at around 19 per cent, within an overall rate of 7.5 per cent – compared with ours at 4.7 per cent, if you believe the way it's measured – and that tens of thousands more jobs are at the mercy of Trump's whim. Against that backdrop, did I perhaps over-egg the francophilia when I wrote last week about the animal spirits of my own revivified village of St Pompon? Saturday's marché gourmand nocturne offers a test. In early evening heat close to 40°C, the crowd and the trade are thin. But as the sun sets, the trestle tables fill up, the food queues lengthen, even the Dutch campers spend freely – and at dusk the DJ plays a version of 'Le Madison' that brings out 30 spontaneous line dancers, including the village postmaster, in perfect formation. Rosé from Puy l'Évêque at €7 a bottle helps, but the upbeat energy I was looking for is here – and my eyes are filled with tears.
The Guardian
11-03-2025
- Politics
- The Guardian
‘Country first, party second,' says Starmer. So why menace Labour members who actually believe that?
On a picturesque bridge beside Harvey's brewery in Lewes, Steve Coogan, local resident and lifelong Labour man, stood surrounded by Liberal Democrat campaigners and many Labour supporters. It was the middle of last year's general election campaign, and supporters of both parties cheered Coogan's message: 'Where the main contenders against the Tories are the Liberal Democrats, that's what people should vote. Vote tactically to get the Tories out!' Around the country, millions did. John Curtice, still working on the estimates, says he reckons tactical voting may have delivered Labour up to 100 extra seats, and stacks of Lib Dem gains. The spirit of the election was a country determined to punish the Conservatives. On the bridge that day was Lewes Labour member and film-maker Tony Dowmunt, filming Coogan to put his message on social media, urging progressive voters everywhere to vote tactically to oust the Tories. But Dowmunt and fellow Lewes Labour member Paul Wafer, who was holding the microphone that day, have both been expelled from Labour. 'Your membership of the party stands terminated. You are no longer entitled to attend any party meetings or to exercise any other rights associated with membership of the party,' said their letters from Labour HQ, unsigned – merely from the 'Disputes Team'. The claim is that the two ousted members 'demonstrated the type of support for the Liberal Democrats that is incompatible with chapter 2, clause of the Labour party rule book'. In principle, that's a necessary rule: members can't back parties standing against Labour, or the multitude of prohibited anti-Labour groupuscules. But, as Wafer wrote to party officials in his defence, many had 'worked together during the election campaign to do everything we could locally to help secure a Labour government, by ridding the country of as many sitting Tory MPs as possible. In Lewes, Labour couldn't win, but the Tories could lose. Getting the Tories defeated in Lewes made a direct contribution to Labour's victory in July.' Labour HQ had rightly written off Lewes anyway. In an unspoken electoral alliance, Labour and the Lib Dems laser-focused their respective campaigning on plausibly winnable seats. Lewes Labour people like Dowmunt went canvassing in Crawley and Worthing West, where they helped eject Tories from both seats. Labour's selective targeting was so overt that LabourList published a list of 211 'non-battleground' constituencies: of which Lewes was one. When the results were counted, Labour came in fourth behind Reform with just 6.7%. But someone snitched on these two members to Labour HQ for breaching the rules; Labour even contemplated throwing out Neal Lawson, the director of Compass, for his organisation's tactical voting campaign. What madness is this? Keir Starmer often says, 'Country first, party second'. But this puts party tribalism well ahead of everything, as does his rejection of electoral reform. What happened in Lewes is a small local matter, you may think, but its implications for progressive government are profound. With the right in power most of my lifetime, despite the left and centre-left clocking up most votes in virtually every election, Labour's high command sticks to bone-headed tribal obduracy on electoral reform. In doing so, it is responsible for preventing British politics from matching that of its citizens. That's despite the party at large voting in favour of electoral reform in 2022, and despite the dozens of new Labour MPs who support it. The latest polling shows voters backing proportional representation (PR) over first past the post (FPTP) by 49% to 26%. Frequently cheated itself in the past, in 2024 it was Labour that benefited grotesquely from FPTP, winning more than 60% of seats on a third of the vote. The Electoral Reform Society chief executive, Darren Hughes, called it one of the most disproportional election results the world had ever seen. It is all the more frustrating that Labour could be using its ill-gotten stonking majority to bring in reform – at least for one election initially, with another confirming vote in parliament afterwards. A system devised for two parties has become dangerously fragile and unpredictable with four to five parties competing. The smallest voting shift causes seismic shocks. 'A breath of wind can change everything,' Prof Rob Ford tells me. 'Just one in 50 voters changing their minds can make the difference between triumph and disaster.' Between the 2019 and 2024 elections, Labour gained only 1.7% more votes, but that gave it 32% more of the total seats. That same dysfunction could blow Reform into power on a small increase: FPTP now causes fickle precarity, not stability and certainty. With such fine margins, Elon Musk's millions really may swing an election, says Ford – another good reason to clear big money out of politics at the same time. Turbulence at home and abroad makes election predictions pointless: Starmer got a bounce this week from YouGov, with 48% thinking he is handling the Ukraine crisis well, against 32% who don't. But in a few days Labour's standing may plummet again, if its benefit cuts are too harsh. The crunch spending review later this month will define Labour: iron-fisted fiscal rigour with severe cuts could alienate progressive voters, without attracting the right. Voting systems profoundly influence everyday politics. FPTP focuses all effort on wooing a few mercurial swing voters, who are likely to be more tax-averse. 'Under PR, politics becomes more progressive,' Ford tells me. 'PR prevents extremes; you'd never get a Thatcher government again. Coalitions moderate policies.' Then why didn't Nick Clegg's Lib Dems moderate the ferocious austerity of David Cameron and George Osborne in the 2010 parliament? 'They got run over: they've learned their lesson.' Next time Labour may well be in coalition, and electoral reform will be the price. As Ford warns them: 'Be nice to people when you're on top, as you'll need them on your way down.' Treating near-allies as the enemy looks arrogant. Lewes's sensible tactical voters are not Labour traitors. Polly Toynbee is a Guardian columnist
The Independent
05-02-2025
- Politics
- The Independent
Labour's got the jitters – which is why they're taking Farage seriously
Labour is making plans for Nigel – how to combat Nigel Farage, that is. Until recently, Keir Starmer 's allies believed Reform UK would mainly damage the Conservatives and help Labour by splitting the right-wing vote, as it did at last year's election. But now Labour strategists take seriously the prospect of Reform winning scores of Labour seats next time. They can no longer assume Reform and the Tories won't forge an electoral pact or at least encourage anti-Labour tactical voting as Labour and the Liberal Democrats did successfully last year. After all, a Con-Farage deal helped Boris Johnson win a majority of 80 in 2019. Some Labour figures insist their party won't be hit by a "time for change" factor after only one term. But that is not the view from the top. Or among the Labour MPs who fear they might lose their seats after five years. In almost every developed nation, a majority thinks the country is heading in the wrong direction and wants change. The status quo seems a bigger risk. I'm told Labour intends to squeeze the Lib Dems and Greens (who currently have a healthy 22 per cent between them in the opinion polls) to make the next election a straight left-right fight. But that might not work; as my colleague John Rentoul noted recently, Labour may be under attack from its left as well as its right. Labour's jitters have been heightened by this week's YouGov poll showing Reform ahead of both Labour and the Tories. Labour MPs in the 89 seats where Reform came second last year, many in the red wall, have formed a group which will urge a tougher government line on immigration and crime. How will Starmer combat the Farage effect? Although Labour won't fight the last war, the next election will also be about change. As Farage proudly wears his anti-establishment badge, Labour will be the establishment in the eyes of many voters. It will be up against some version of the populist right – led by Farage or the Tories or both. Pat McFadden, the Cabinet Office minister and one of Starmer's closest allies, revealed Labour's thinking at a brainstorming session held by the Progressive Britain think tank: "Labour must not defend a status quo that isn't ours, or instinctively defend systems and situations that are not delivering well enough for the public." He added: "We cannot allow the battle to be between the disruptors of opposition and the disrupted of incumbency. We too have to be disruptors." Easier said than done in government – although Donald Trump is doing it. Indeed, in the grave new world, some Labour MPs admit privately there are lessons to learn from Trump – even if they pinch themselves when they say it. For example, some argue the government should approve the controversial giant Rosebank oilfield to protect the jobs of "working people" rather than lose them and import more oil and gas. But Labour is deeply divided, and its strong green wing, already seething the government is backing a third runway at Heathrow Airport, is now steamed up about what might prove a 'drill, baby drill' decision on Rosebank. The idea of aping Trump will abhor many inside Labour, but the party will have to become more populist - without abandoning its core values - to see off the populists. There's another Trump parallel. Ministers frustrated with the Whitehall machine responding slowly to their edicts have concluded that "the state" is not working and needs an overhaul. For Starmer, being a competent technocrat will not be enough. Defending institutions that are not working well will harm Labour, as pro-Europeans found in the 2016 Brexit referendum, so ministers must challenge them. As McFadden put it: "Expecting more from a system which has too many good people caught in bad processes won't work. We have to be changemakers in how the state works to make sure it is outcomes that matter not processes, to build what we do around the person using the service, and use the advantages of technology to the full." Rather than ignore Farage and hope he damages the Tories, Labour will attack him head-on. It has begun to highlight his openness to funding the NHS through social insurance. On the face of it, the best way to defeat the populists is through delivery. But a fear haunts some Labour figures: even if they can point to some improvements in the NHS, living standards and immigration by 2029, impatient voters are in no mood to thank mainstream parties they think are 'all the same,' as Farage puts it. People will still want change. With incumbents being booted out around the world, Labour might struggle to avoid a kicking. Being an insurgent government won't be easy. But if Labour doesn't pull it off, the populists might claim another victory in four years – this time in the UK.
