The good news is that Labour has listened to the voice of business, and its employees. It has recognized that customs union membership is the essential platform for supply chain effectiveness, business continuity and future investment in long term wealth creation. Not to mention the Good Friday agreement.
The bad news is that Jeremy Corbyn in his Coventry speech has not done a whole lot better than Boris Johnson in spelling out a twenty-first century view of wealth creation.
The Labour leader says his priorities are growth, jobs and people’s living standards. There is mention of a National Investment Bank ‘to drive investment in every community through a network of regional development banks so that every area has an industrial strategy, based on investment in a high skill, high wage and high productivity economy’.
There is welcome recognition of the importance of The UK low carbon and renewable energy sector. And of the kind of EU regulation that helps promote investment and trade – include eco-design and energy labelling standards, greenhouse gas emission standards for vehicles, the internal energy market, construction product standards, chemicals regulation and nuclear safety and safeguards.
But nowhere in the speech is there acknowledgement that wealth is created in companies, that companies depend on entrepreneurs to start them, on leadership focused on the long term to sustain them, and that it is never governments that create a thriving economy.
As I argued in my speech to last year’s EU corporate governance conference, the best contribution of government can often be to get out of the way. Corbyn is justified in decrying growing inequality but wrong to suggest that any government has the tools to reverse many of the global forces that lie behind that inequality. He is right to attack the abuse of privatization by some companies and their owners, but wrong to claim that the answer to greed and short termism is public ownership.
Our railways suffered serious underinvestment and short termism when in public ownership. And the recent excesses of which RBS is accused are the excesses of a state-owned business. That’s why Tomorrow’s Company has, with BSI, developed the idea of a Trust Test to help government choose which private companies are worthy of public sector contracts.
There are better ways to make the market civilized – many of them were described in the work done by Tomorrow’s Company on Promoting long term wealth and, more recently, Better Stewardship.
Let’s hope that with Labour now listening to business, it can begin to set out its positive views on how government can promote investor stewardship and long-term wealth creation.