Martin Flanagan: Miliband tarred by anti-business brush

Rightly or wrongly, much of the business world has decided there is a left-wing whiff to Milibands Labour. Picture: Greg Macvean

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IF ED Miliband sails into the harbour of power at the general election it will be without the help of any freshening wind from the business lobby. The Labour leader almost cannot open his mouth without alienating a swathe of the sector.

It is different from the days when Tony Blair stole the Tories’ business-friendly clothes to recast the party as New Labour, a significant factor in positioning the party in the successful centre ground of British politics. More than 60 business leaders wrote to the Financial Times in 2005 backing New Labour. That is unthinkable in the climate that has grown up around the Labour/business relationship today.

Rightly or wrongly, much of the business world has decided there is a left-wing whiff to Miliband’s Labour. They fear a Miliband government would be interventionist in commercial matters.

It doesn’t really matter whether the business critics are right or wrong, the battle lines have been drawn and Labour’s apparently less pro-business agenda is now part of the mood music in the run-up to the election.

The latest thing to annoy big business is Labour’s plan to raise corporation tax from 20 per cent to 21 per cent, even though Labour says it would free up £400 million in business rate tax breaks for smaller businesses.

Unsurprisingly, the CBI believes the steady cuts in corporation tax have been one of the greatest achievements of the coalition government.

It seems to be of no avail that, even at 21 per cent, Britain would still have the lowest corporate taxation of any leading G7 country.

Meanwhile, it is not just big business that has knocked Labour’s plan to limit zero-hours contracts to three months before employees must have a right to a full-time job. The British Chambers of Commerce has also called it heavy-handed meddling, saying it will deprive employees and employers of the flexibility they both want.

To be fair, it looks like Labour is tilting at windmills here, given that there has already been action to ban exclusivity clauses which unprincipled employers used to pervert zero-hours contracts in their favour.

Before these most recent issues, Miliband’s image problem with business was not helped by his Manichean contrasts between “producers and predators” in Britain’s business world, and the promise of a freeze on energy prices if Labour is elected.

I don’t believe Miliband is inherently anti-business, however. He is too intelligent. Just as power might well temper some of his more doctrinaire ideas on what is achievable in remodelling the business environment. But, if he wins power, it won’t be via the Blairite route, that’s for sure.

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