Ed Balls’ fluff on Newsnight reflects Labour’s internal conflict on business

http://www.theguardian.com/commentisfree/2015/feb/04/ed-balls-newsnight-labour-conflict-business

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It’s a bit like the morning after the office party. Late last night there were some terrible moments and this morning everyone is going to pretend they didn’t happen. Or if they did then they’ve forgotten already. Or, as a last resort, pretend someone spiked their drink. But Labour’s hangover has been nearly five years in the making and it’ll take more than a morning to recover.

Ed Balls’ fluff on Newsnight, when he was unable to remember the name of the leading businessman he had been talking to, he said, only a few moments earlier was most uncharacteristic. It was later revealed to be, in a piece of dire symmetry, Bill Thomas, a non-executive director of that great business triumph, the Co-op Bank, and also author of a report on small business for Labour. But it already looks alarmingly likely to be his own 2015 version of Gordon Brown’s “bigoted woman” moment in 2010.

Related: Which business figures support Labour? Erm, Bill Somebody, says Ed Balls

What is even worse is that it comes just as a poll by the Tory peer Lord Ashcroft, the genius who has worked out how to weaponise opinion surveys, shows a Labour wipeout in Scotland even more devastating than was already feared. This is the poll that shows both Danny Alexander, the Lib Dem chief treasury secretary, and Douglas Alexander, Labour’s election strategist, drowning in the great SNP tide.

Labour’s three-day monstering by the Daily Mail and assorted other critics who have been amplifying the differences between business and Ed Miliband, was entirely predictable. Complaining about it is pointless, a bit like complaining about cats chasing sparrows. It’s just what they do.

All the same, after Ed Miliband “forgot” the deficit in his conference speech last year, it was clear there was a problem coming down the track. Maybe worth preparing for it? Well, they have been. Only this morning the Financial Times has devoted the front and the whole of its page 3 to reports of the Ed Balls-Chuka Umunna City “charm offensive”. It’s just that no one’s been listening.

The problem, not for the first time, lies partly in the uncertainty of the party’s message. The Balls-Umunna team have been working the City to try to persuade them of Labour’s pro-business credentials – in particular its enthusiasm for the EU – while to a more general audience Ed Miliband has been sending out much more business-sceptic signals.

Balls has been left in a bad place, picking up the pieces in Miliband’s wake, promising financiers that they would never hear anti-City sentiments from him. With even less subtlety, Umunna has been warning them that crossing Labour the way that Stefano Pessina, the non-dom hedge fundster and Boots boss did at the weekend, would damage their interests.

The real problem is the absence of a serious attempt to reframe the political conversation about business and the economy. The message the party learned in the years after the collapse of the corporatist model of Labour-business relations in the 1970s has been that you have to treat business on business’s terms.

That hasn’t been a total failure: the minimum wage would never have happened without the prawn cocktail offensive of the 1990s that familiarised the combination of caution and charisma that made early Brown and Blair such a formidable team. But it hasn’t been a rip-roaring success either.

Business captured politics and it has taken an advantage that it now exploits with a blind arrogance. It needs checking. Miliband’s instincts on this are right. But it can’t be some quixotic crusade. It needs a broader framework underpinning it. Otherwise the party is left lurching between two conflicting ambitions – appease business and frustrate voters who rebel at the sight of huge salaries for the bosses and zero-hours contracts for the workers. Or risk alienating business with tougher taxes and more regulation, and frighten the voters who believe all too readily the business message that any infringement of their right to a flexible workforce and deregulated markets will jeopardise employment and prosperity.

This tricky tendency of voters to hold conflicting ideas simultaneously has left Labour policy in paralysis, fearful of demanding that business recognises the value of the state and fearful of not making demands. No wonder Balls lost the plot on Newsnight.