Is Labour the answer?

John McDonnell
Wiki_commons_Tsering_Lhamo_Sophie Brown
Share this content

As the Conservative Party seems determined to rip itself to shreds, with the former foreign secretary taking time out from what sounds like a very messy divorce to stir trouble, perhaps it is time to look at the various alternatives.

While the status quo may not be many people's taste, it does have the advantage of being the devil that we know. Theresa May seems relatively harmless and is likely to prove malleable in an effort to avoid being drowned like an innocent kitten that has strayed into dangerous waters.

Regardless of the lady's wishes, her future may well be decided within the next week if Jacob Rees-Mogg and his stormtroopers have their way. The general consensus in the media appears to be that this self-important band will then seek to promote the former mayor of London as the next Tory leader and, in their eyes at least, prime minister.

Such an outcome is likely to delight and terrify readers in equal measure. Nobody seems quite sure as to what this jolly toff's policies might be, although given his love of a headline they could be as extreme as those of the president of the United States.

Most accountants probably believe that the Labour Party is ruled by the devil incarnate and its policies will prove extremely damaging to the middle classes ie you and me.

In this light, it is worth spending a little time considering the speech delivered by John McDonnell to the TUC earlier this week.

Rather than high-quality tub-thumping socialism, the shadow chancellor seems to be promoting a number of policies that could have come directly from the mouth of the much maligned but, in retrospect, relatively mild-mannered George Osborne.

In this writer's eyes, you would expect proper Labour Party policy to involve spending the rare moments between regular renditions of the red flag and making the final arrangements to turn the United Kingdom into the United Republic nationalising all significant industries and unionising every workforce in the country.

However, McDonnell confounds such views with his proposal that workers in larger companies should be given the opportunity to share collectively in the benefits of ownership of their company. While an obvious initial reaction was to assume that he meant that the workers should be handed the company lock, stock and barrel; in fact, it appears that he wishes them to share in the profits (not really a true socialist concept) and management of those companies.

As the author of a book entitled Employee Share Schemes, this is music to my ears.

However, the analysis seems a little naïve in that an employee with four shares in shall we say BT will have relatively little say over that company's management. Even if every employee pooled their four shares, they would still come way behind the smallest of pension funds.

Other policy proposals such as outlawing false self-employment are unlikely to scare those in the profession, who might see an opportunity for additional work from those attempting to defend themselves.

The thorny point of taking on the gig economy could prove more controversial but realistically there has to be every chance that any Chancellor of the Exchequer would regard this as an opportunity to bring in some much-needed revenue to bolster our ailing economy.

This columnist has no idea of what might develop over the next few weeks but whatever comes about is almost certain to be quite fascinating, even if there is every chance that in the longer term it could all end in tears.

About Philip Fisher


Please login or register to join the discussion.

12th Sep 2018 11:26

At least one good thing that can be said about Labour re tax is that they were a bit cautious (squeamish even) about introducing retrospective tax legislation (despite threatening it), whereas the Tories seem to have embraced wholesale retrospective tax legislation numerous times over the past 8 years. As an example just look at the 2019 loan charge that is (almost unbelievably) 20 years retrospective and is (unsurprisingly) now causing suicides etc.!

Thanks (0)
13th Sep 2018 13:30

Employees are free to purchase shares in the companies they work for if they so wish or negotiate share ownership in lieu of salary.
This is no more than tub thumping business bashing by a rather creepy IRA sympathising Marxist.

Thanks (3)
14th Sep 2018 18:49

The representation of workers at board level is something that imho merits consideration within larger entities though I would much prefer incentive rather than compulsion. (CT Reduction for companies introducing increased stakeholder role in management could be one way to go etc)

Labour comes to all of us over a certain age with some baggage that is hard to shake, I date from 1960 so the 1970s features high in my conscience and has likely shaped some of my political and fiscal views, apart from the fiscal chaos of the 1970s on a more personal level their withdrawal of school grants in the 1970s led to the school I attended closing disrupting my education at age 15, something I find pretty hard to forgive given what it did to my academic results by the upheaval of a school move midway through my O Level courses.

However even I am starting to view the conservatives, my natural party since my first general election vote in 1979 (First MP I voted for was Alex Fletcher, Conservative and a CA), as now badly damaged, their USP re fiscal competence now looks in tatters.

They can now only get away with being the "Nasty" party only if they deliver economic benefits, we will very soon see if Brexit, their baby for all intensive purposes, delivers any or in fact the reverse.

Despite reservations re Labour I have come to the view that Brexit is for life ,a Labour government is only for five years, so despite a lifetime of mistrust for Labour I suspect I, like a fair few others, could readily discard the Conservatives in the event chaos to business and the economy ensues post March 2019- so either they deliver on the promises (no significant trading disruption and trade friction) or I suspect a large swathe of what I might call One Nation Conservatives , those who have rendered them electoral support despite reservations re how they go about managing the economy and without embracing their at times ideological views ( I am still more Keynesian that Friedman), could desert them.

Labour, if they are not stupid and too radical, would have a golden opportunity in such an event to remove them from power for 10-20 years, so the big question is, in such an event will Labour pragmatism re gaining and holding power modify their more radical urges; time will tell.

Thanks (1)
17th Sep 2018 15:55

I am also just old enough to remember the cuts and chaos of the late 1970s as Labour struggled under the imposition of IMF terms. I can also remember the warnings of capital flight and sterling crashes if exchange controls were lifted. When they were removed sterling rose and investment flooded in.
Brexit is not a left/right issue. The referendum was necessary because UKIP won more seats in the EU than each of the other parties. All the parties (apart from the irrelevant LibDems who are neither liberal or democratic) supported a referendum and the triggering of Article 50.
It is not within the gift of the Government to promise friction free borders post Brexit - that rather depends on our friends over the Channel. But you are right - if they mess up they deserve to lose to New new labour who if they can't control John McDonnell's radical urges will be nothing like the (more honourable) Labour of yesteryear.

Thanks (1)
to Knight Rider
26th Sep 2018 21:25

Well, the lets have 10% of your equity, 1% a year for ten years ,idea certainly had me gasping; "Our economic policy will self destruct in five seconds" being my first thought.

The devil will likely be in the detail but I suspect I will be a bit miffed if they try to grab 10% of say Royal Dutch Shell, as I expect a fair few other shareholders will be, the largest of which is I think a US fund.

Commonsense says there would need to be some sort of geographic split of its market cap for a multi national which just happens to have its main listing in the UK and earns most of its profits elsewhere, if not I suspect a few will happily forego their UK listing and we will all be a little poorer as a result.

Meanwhile I think something like Berkshire Hathaway, reasonably removed from the UK (though they do have some UK investments) ,may have to be my next top up investment and a review of my ITs (which mainly have overseas earnings but do have a UK listing (though likely less than 250 employees) )might well be prudent.

I wonder which companies have a listing in Venezuela and all their earnings in that country, they might be safer?

Thanks (0)
03rd Oct 2018 15:18

Oh well, no-one else said it so I will.

If Labour is the answer it must have been a *%£!ing ridiculous question.

Thanks (0)