Welcome to Corbyn Time: What’s Next, and What Might Matter on the Road Ahead
Following perhaps the most controversial leadership contest to date, Jeremy Corbyn MP made his debut as the new Leader of Her Majesty’s Opposition this week.
Supporters and doubters alike, both inside and outside of Parliament, are now reflecting on what comes next.
Over the next five years, should the Parliamentary Labour Party allow him to remain in post for that long? The newly elected anti-EU, anti-NATO, anti-Monarchy and anti-austerity Labour leader faces a number of significant challenges ahead.
Currently these challenges are largely internal – matters of concern of Labour MPs and staffers – but they will become increasingly externalised. Should business continue to engage with Labour? And if so, how?
Raised business eyebrows, calming fears
At face value, a hard left Labour Party lead by Corbyn hardly appears to be the most open or tolerant towards business.
The left wing of the Labour party is suspicious of the benefits of business and, in response, business will be cautious to engage. This was often the case under the leadership of the now comparatively centrist Ed Miliband.
However, despite his intention to heavily regulate businesses and nationalise others should he ever become Prime Minister, Jeremy Corbyn took a surprisingly considered approach in the selection of his Shadow Cabinet.
Take for example the appointment of Angela Eagle MP as Shadow Business Secretary. The former CBI economic team staffer understands the needs of business and is used to speaking their language.
Considered a moderate by the left-wing, she served as Chief Shadow Secretary to the Treasury under Ed Miliband MP and also has government experience as a Junior Minister in the latter days of New Labour.
In this regard, Eagle’s appointment could be seen as an attempt to appear less hostile toward business and to add some much-needed frontbench experience to the Shadow Cabinet.
The City will be hoping that she intends to continue the pro-business policy package proposed by her predecessor by retaining his calls for reducing administrative burdens and introducing a rates freeze for SMEs.
Among the new faces of the Shadow Cabinet is Lisa Nandy MP, now Shadow Secretary of State for Energy and Climate Change. Based on her previous statements we can expect her to resist government attempts to accelerate shale gas development, and to continue backing renewables while pushing for clean coal under carbon capture and storage.
The moderates of the Party, those “business friendly” Blairites (Liz Kendall MP, Yvette Cooper MP and Chuka Umunna MP among others) who deserted the front bench are still valued voices and can play supporting roles on policy issues advanced by the new Corbyn team. Indeed, they continue to proactively engage with businesses – a hint at how they intend to continue to fully involve themselves within policy development. But whether they provide the necessary balance on Labour’s benches in parliament remains an unanswered question.
So while the initial response to a Corbyn leadership may be to ignore the Labour party it should be remembered that among the sensible members of the Shadow Cabinet, and the experienced and influential former Shadow Ministers who now reside on the backbenches, there are plenty of routes for engagement.
Businesses do need a strong opposition to counter unfriendly government policies. But only if it can propose a pro-enterprise agenda which creates jobs and incentivises growth.
While initially taking a harsh stance on businesses, threatening to renationalise railways, cap executive pay and raise corporation tax, Corbyn has already started taking a more moderate stance on some of his policies – merely days into his leadership. He has already signalled that he will not advocate positions such as NATO withdrawal, and opposition to EU membership.
Businesses will thus have to wait and see what a revamped Labour party policy really looks like once the Leader and his Minister’s feet are under their desks. A key event to watch will be this year’s Party Conference – a key indicator of how much of Corbyn’s early rhetoric actually translates into policy.
The Trade Union phoenix
Trade unions are rooted within Labour’s history. But arguably even more so within Corbyn’s political philosophy and will undoubtedly have a significant influence over his policies.
Union workers will be integrated into Corbyn’s wider team and hold a considerable political role. Indeed, he has already appointed Simon Fletcher as his Chief of Staff. The same Mr Fletcher who was Ed Miliband’s union relations adviser and Ken Livingstone’s Chief of Staff.
It is also possible that the more left-wing unions such as Unite (who were a constant thorn in the side of Ed Miliband) will find their love of the Labour Leader’s office reinvigorated. This will bring with it a considerable financial boost to the party and greater positive exposure to the working public.
But the hold of the unions on policy will be a concern for some. The role of the unions in the development of ideas into the National Policy Forum (VPF) and the National Policy Executive (NPE) is one to watch carefully.
Hurdles, pitfalls, and the tests ahead
Corbyn’s first mission is to bridge a divided party. The Parliamentary Labour Party may already be divided in their views about their new leader, but there is no escaping the fact that a serious (60%) mandate from the Party members needs to be respected.
His Shadow Cabinet includes faces both old and new, and ensuring they are all aligned in their messaging will require some serious man-management. The fact the party could not organise a proper whipping operation over the welfare cap vote just days into Corbyn’s leadership indicates management may be a serious problem for the party.
Corbyn’s other misstep was a refusal to sing the national anthem at the Battle of Britain memorial resulted in some serious media criticism. Whether his principled approach can really work in the modern era to appeal to a mass public remains to be seen.
The Spending Review and Autumn Statement, due on 25 November, will be an early test of Corbyn’s grasp of the big budgetary issues. Hitherto, the Labour party has slowly accepted the need for greater cuts; Corbyn is however expected to abandon the party’s nuanced approach to deficit reduction. While he will not be able to stop deep cuts to public spending, he is more likely than his predecessor to make the electoral choice between Labour and the Conservatives even more stark.
Further ahead, next May's elections in England, Scotland, Wales and London will be regarded as a make-or-break litmus test for Corbyn’s leadership and appeal. Scotland should theoretically, as a left leaning country, be more fertile territory for him to work with to regain disillusioned former voters.
But with the SNP’s stock being high (60% approval in the latest opinion polls), a tough battle lies ahead of him. To have a chance at gaining support in Scotland, Labour may have to outdo the SNP on its pledges to oppose austerity.
Yet tax devolution, the SNPs wild card, may likely be Labour’s greatest weakness in Scotland with Corbyn feeling rather uncomfortable with greater tax devolution. He has already set out a pro UK financial agenda for Scotland, with plans to keep Scottish income tax rates closely fastened to the UK’s. Corbyn’s Scottish agenda will also include raising business tax rates, which is in stark contrast to SNPs push to control business taxes and cut corporation tax revenues in Scotland.
One thing for certain is that Corbyn will have great influence on politics in the years ahead; he will decide on the priorities, tactics and tone of the opposition in Parliament. Businesses and lobbyists alike will have to revisit the way they work and thus be prepared to engage effectively with the new Labour team.
Businesses should not be afraid of engaging with Labour. The Shadow Cabinet contains reasonable and experienced politicians that can dialogue on a constructive level. And it will be important to engage them before they are inevitably reined in by an increasingly confident leader’s office and empowered unions.