The election of Jeremy Corbyn as Labour leader, although predicted by the polls, has still come as a shock to many. A republican trade unionist of the 1970s is now fronting Her Majesty’s Loyal Opposition – quite a change from New Labour.
People are predicting all sorts of outcomes.
- A coup to oust Mr Corbyn and replace him with Chukka Umunna or some other rising star.
- A party split with Mr Corbyn leading the left wingers whilst Labour moderates join up with the Liberal Democrats.
- A wave of popularity for Mr Corbyn that builds him a Thatcher-like advantage.
The whole Labour party leadership contest has been undignified, leading many to say that if they can’t even choose a leader efficiently, how on earth can they govern the country? Currently, Mr Corbyn is a long way from even looking like a credible Prime Minister, but who knows. Things may change.
A number of trade unions have already claimed they will use Mr Corbyn’s victory to unleash a wave of strikes to “topple” the current government, but that is unlikely to win their leader much popularity in the long run. Most Labour MPs know they won’t keep their seats if they are implicated in a strike that brings the nation to a standstill.
Mr Corbyn has already been the subject of disapproving comments when he refused to sing the National Anthem at a Battle of Britain service this week. Even members of his shadow cabinet agreed he should have done so and he has now said he will participate fully in the future. But if Mr Corbyn survives the wrath of his MPs – including his deputy Tom Watson who disagrees on Trident, the EU and NATO – this will probably lead to a shift in Conservative policy too and perhaps have the same impact that the Lib-Dems did when they were in coalition. Messrs Cameron and Osborne will be keen to show they are both a firm party of government and an all-inclusive administration. The introduction of the National Living Wage brought in after Ed Miliband’s defeat is an example.
Further down the line though and closer to 2020, there may be more concessions to the left. More family friendly rights may be unveiled in a bid to outflank Labour’s traditional support-base and exploit the media perception that Mr Corbyn only wants men in his top jobs. If so, it will be businesses that pay the price – particularly SMEs that can’t always afford to pay extra maternity or paternity rights.
Other common “give-away” areas (from which Mr Corbyn is likely to derive popularity) are pensions, holiday and working time. As a generally pro-business party, the Tories are unlikely to compromise on working time, leaving it to the courts instead. If Mr Corbyn leads a charge on workplace benefits in general, Mr Cameron may adapt future policies to compensate. So far we haven’t seen the promised “volunteering leave” from the Conservative manifesto materialise. The Tories may bring this out at a strategic moment.
The next few months will be critical for British business, as we find out if the political climate is to be one of centre right vs far left, or whether Corbymania will fizzle out with a coup or a Labour split. Whatever happens, it will affect companies including SMEs. The current government will not increase the size of the state to aid employment; so the big question is whether the Conservatives will stick to their plan of creating jobs through pro-business policies over time, or whether they will “blink first” and give in to populist calls for more extravagant employee benefits.
Having lived through the 70s I can remember what a horrible depressing shambles it all was, a shambles being re-enacted in France by M Hollande today. Under Nicolas Sarkozy things were serious. For example, 25% of under 25s were unemployed. But now things are much worse. Higher unemployment, lower productivity and business either closing down or leaving because the tax an employment regime means they cannot lawfully make a profit. It does not make for a healthy economy or a happy self-sufficient society. We have to learn from history because we can’t predict the future. But will we learn?
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