Cooking the Books 1: Brown means business

In a bid to show that his administration of capitalism would be different from that of Blair, Gordon Brown handed out some junior ministerial posts to people from outside the Labour Party. One of these was Sir Digby Jones, former president of the Confederation of British Industry and a stalwart defender of the profit system, who is now the Minister for Trade and Investment. Not that he had to renounce any of his previous views to become a minister in a Labour government.

His boss, the Secretary of State for Business, Enterprise and Regulatory Reform (previously, simply the Department of Trade and Industry), John Hutton, is equally pro-business. At a news briefing shortly after his appointment, Hutton spoke of aiming to make Labour rather than the Tories the natural party of business, promising that his department would be aggressively pro-business. Echoing the sort of thing Sir Digby used to say when he was president of the CBI, Hutton stated:

In the whole debate over more employment regulation, you have to be mindful of the costs to British business. Youve got to be very careful and always take into account the impact and burden on business (, 3 July).

Meanwhile Browns successor as Chancellor of the Exchequer, Alistair Darling, was described by the journalists who interviewed him for the Financial Times (3 July) as making clear his determination not to pander to leftwing Labour prejudices against big business and the City. According to another journalist, he hinted as clearly as a Chancellor ever can that foreign financiers living in Britain would continue indefinitely to enjoy their present very favourable treatment under the nondomiciled tax regime (Anatole Kaletsky, Times, 5 July). Some MPs are not happy with this regime which allows capitalists with overseas interests living in Britain to avoid paying tax on their overseas profits. They want the House of Commons Treasury Committee to investigate the matter, but:

It is understood, however, that ministers are reluctant to rush into action to try to capture extra revenue from non-domiciled residents, because of the risk of driving them entirely off-shore or to other, lower-tax jurisdictions, as well as potentially damaging the Citys competitiveness (Times, 13 July).

As Darling himself put it in his FT interview, I am very well aware that people who do business, and who contribute to business here, can go elsewhere.

Darling also made it clear that he wasnt going to do much about venture (sometimes pronounced vulture) capitalists or private equity industry as they call themselves, who specialise in taking over and asset-stripping companies considered not to be making high enough profits. How could he as Brown had just appointed the most prominent of them, Damon Buffini, to be a member of the new Business Council he set up to advise him of the desires of Big Business?

Labour, both in and out of office, has always upheld capitalism, but at one time they used to champion manufacturing capital as opposed to finance capital. That was the time when Harold Wilson talked of initiating a white-hot technological revolution and blamed the gnomes of Zurich for his failure. Now the Labour Party has abandoned such prejudices against financial capitalists and is embracing them with open arms.

Within capitalism, financiers play an important and essential role, helping to channel capital to where it can make the most profit. But as far as the actual production of real wealth is concerned, despite their ludicrous description of themselves as an “industry”, they contribute absolutely nothing. With the decline of manufacturing in Britain, the financial capitalists, home-grown and non-domiciled, have assumed a more important role in collecting a share of world profits for British capitalism, by sharing in the proceeds of the financial deals and speculations done in London.

Any British government has to take this into account. Being pro-financial capital is what being pro-business means these days. Labour has duly acknowledged this and continued its evolution away from the trade-union pressure group it originally was.

Leave a Reply