OPINION: Labour rolls over for CBI and big business

Gordon Brown’s love-in with business started back in the early 1990s with the so-called ‘prawn cocktail’ circuit. Labour knew then courting the Confederation of British Industry (CBI) was important to its winning strategy and the party is still at it today.

Originally Brown was just trying to show business leaders that he was willing to listen to them as much as the trade unions. Indeed, back then even some unions were trying to influence the CBI. 

I remember attending its conference with my old boss Gavin Laird, a leader of the engineering union, who was the first trade unionist to address there.

New Labour has now gone further and done more than the Tories ever did in trying to give businesses what they want. When Brown became Prime Minister he even appointed the right-wing former CBI boss Digby Jones to a top job to prove just this.

In particular, Labour has cut business taxes dramatically. Corporation taxes are now among the lowest in the western world, down from 40 per cent to 28 per cent and even less for small businesses. Indeed, so low have some taxes fallen that bosses admit to being embarrassed about how they can pay less than their cleaners, mainly due to the cut in capital gains tax from 40 per cent to ten per cent. Even the Daily Mail was up in arms about private equity bosses only paying ten per cent tax. This is why Alistair Darling announced a new flat rate of 18 per cent in his pre-Budget report.

And is the CBI happy? Of course not. It is now complaining  that when people sell their business they will have to pay that 18 per cent tax, oblivious to the fact that most of us pay  far greater.

What is remarkable is that the Government seems to have surrendered the PR battle over this even before the arguments have begun. Brown even intimated in his speech to the CBI this week that the Government was prepared to look again at this change.

The odd thing about all this is how everyone simply sings to the tune of the CBI. All the more surprising when you consider how much more big bosses pay than their workers.

In opposition, Brown ran a very successful anti-‘fat cats’ campaign against the privatised utility bosses. This made the ‘windfall tax’ on their companies very popular with the electorate despite very hostile opposition from the CBI.

It was also the CBI who led the campaign against the minimum wage, saying it would cost Britain millions of jobs.

Business and the CBI aren’t always right and Labour would do well to remember that.
charlie.whelan@haymarket.com

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