by Samuel Dale
Today the leader of Her Majesty’s Opposition Ed Miliband, prospective Chancellor Ed Balls and future minister Chuka Umunna were tearing shreds out of well-known chemist, Boots.
With less than 100 days to a general election Labour is not promoting a new policy to boost growth, there are no proposals to boost pensions or housing (or, heaven forbid, cut the deficit) so instead the party returns to its old favourite: business bashing.
In an interview with the Sunday Telegraph Alliance Boots executive chairman Stefano Pessina said a Miliband Government would be a “catastrophe” for Britain.
Pessina didn’t go into policy detail but made it very clear that he thought Miliband would be a Hollande-style disaster.
It’s hardly a surprise that major businesses are criticising a party that is planning to raise corporation and income tax, impose price controls, tax tobacco firms, fund managers, pensions, payday lenders and banks while increasing the regulation of energy firms, railways, financial services and employment law.
Meanwhile, the Tories want to cut taxes across the board and attract as much business to Britain as possible.
It is emphatically not a surprise to see a business leader speaking out, Ed Miliband has done everything he can to bait them.
He has made no olive branch to recognise business’ role as job creators or tried to attract more foreign companies and investment to the UK.
Instead of responding to Pessina with a list of pro-business policies, Labour has none. It has no choice but to go on the counter-attack.
Here was shadow business secretary Chuka Umunna response yesterday: “It is important that the voice of business is heard during this General Election campaign, not least on Europe.
“But the British people and British businesses will draw their own conclusions when those who don’t live here, don’t pay tax in this country and lead firms that reportedly avoid making a fair contribution in what they pay purport to know what is in Britain’s best interests.”
Ed Balls was on the radio this morning to re-enforce the message and Miliband weighed in too later.
MPs took to Twitter. Shadow transport secretary Lillian Greenwood tweeted: “Multi-millionaires don’t like paying their fair share of tax, who’d have thought it? #ForTheMany not just a few at the top #VoteLabour”
And MP Mike Gapes tweeted: “Does Boots boss own a big mansion in UK ? Does he pay income tax in UK ? Does he vote in UK ? Does he pay tax and vote in Monaco?”
This is an unedifying spectacle, more Syriza than serious. Tackling the man, not the ball is petty and self-defeating for a party aspiring to government.
Here’s how it will play out.
Today, Labour bigwigs will pat themselves on the back: Miliband vs the powerful, again. He took on the banks, Murdoch etc… now Boots.
But tomorrow interviewers will stop asking about Boots and start asking about Labour’s business policy. Why are business leaders criticising Labour? What is Labour doing to support business? The party needs answers, not just counter-attack.
More damaging still, corporate Britain has noted Labour’s response to Boots. It fits a pattern, this morning the institute of Directors today warned about a growing anti-corporate mood in UK politics.
The next 90 days will see a steady stream of critical and more vociferous business commentary on a possible Labour Government similar to the Scottish referendum debate.
In the final frantic days before polling last September, business came out fiercely for the Better Together campaign promising economic chaos if the country voted Yes.
Project Fear worked and Scotland voted Yes in large numbers. The same is starting to happen in Britain and Labour just raised the temperature.
You can’t keep hitting someone and expect them not to hit back. Business hasn’t picked a battle with Labour but it will fight if it has to, and at the most politically sensitive moment.
Middle Britain will worry about their pensions, the low paid about their jobs and the rich about their pay packet. It will be damaging and draw Labour onto its weakest ground, economic competence.
Labour has no allies among British business and only itself to blame. It won’t be able to go on the counter-attack every day for the next three months, it needs answers on its business policy.
Sam Dale is a financial and political journalist
Tags: Boots, Business, Ed Miliband, Samuel Dale, Syriza
The problem is that no-one on the Labour front bench actually understands where money comes from. Money, in the Labour worldview, is something which actually belongs to the government and businesses making profits for their shareholders and keeping people in jobs are actually depriving the government of money and hence are bad, evil, wicked and greedy.
Note that paying or not paying tax isn’t in any way a moral issue – it’s a legal one. No-one but an idiot pays a penny more than he has to.
That has to be the best yet on here.
More and more Labour is just making policy on the hoof. The whole approach is totally ramshackle and appears so to the general public.
What’s really frustrating about this is that Labour actually could tell quite a good story about why we are better for business. In fact that’s what I imagined Chuka’s response would be. But unfortunately we didn’t use it as a welcome opportunity to talk about how we’ll be good for business, but rather to lay into the business and individual that made the comment. Rather like playing the man, rather than the ball.
The “pro business” lot could hardly have picked a worse candidate to go into battle for them, could they.
A tax heaven resident billionaire that had pulled Boots out of the UK for tax reasons.
It played very much into Ed’s hands, and I thought Ed smashed the back of the net with his response.
In a post crash world marked by poor productivity and low paying jobs, mindless prostration at the feet of business is not the vote winner many on this site and further out to the Right perceive it to be.
Labour’s response was everything it needed to be. And it will shore up Labour’s vote.
Well done Ed.
“The next 90 days will see a steady stream of critical and more vociferous business commentary on a possible Labour Government similar to the Scottish referendum debate.
Already started.. And not a few either.
A logical person would think you need businesses onside to provide wealth and employment. Obviously not.
Labours main pro business policy is not to play ducks and drakes with membership of the EU.Ignored by Dale,too inconvenient.
As Andrew Adonis has pointed out business leaders are worrying about the 50per cent tax rate and the mansion tax neither of which will affect their business-looking after number one in other words.
“In an interview with the Sunday Telegraph Alliance Boots executive chairman Stefano Pessina said a Miliband Government would be a “catastrophe” for Britain.”
An Ad Hominem attack on the Labour Party, It can hardly be surprising if the response is in the same vein.
Not only is he a resident of Monoco, but another major British company had it’s domicile moved to Switzerland, with a delisting from the London Stock Exchange
He is a financier making large deals to arbitrage the tax systems. The deal with Walgreens included a maneuver call Tax Inversion which would base the company in London as Corporate Taxes are lower than in the US.
This kind of deal making benefits no-one other than the deal makers and the arbitrage acts against the interests of the nation state, frequently businesses themselves and often the workforce.
And as I am sure Dr Ha-Joon Chang of Cambridge University would confirm, we don’t need the inward investment in the UK, we can fund our own employment.
Business fill economic niches, if Boots was not to retail cosmetics in the UK others would fill the demand for retailing cosmetics etc.
Mr Stefano, is not someone with the interests of the UK public at heart. He is entitled to his views, but it should not be accorded undue weight due to his (temporary) position as the chairman of Boots the Chemist or as a member of the Global elite. They have excessive influence as it is, and considerable structural advantages.
http://www.boots-uk.com/About_Boots/Boots_Heritage/Boots_History.aspx
p.s.
British retailers entering the US market has a poor history (e.g Tesco).
Pessina is an Italian living in Monaco who runs a sort-of-but-not-really UK company. What tax is he dodging then? Italian presumably. Is the Italian tax-take now something that concerns the head of the Labour party so much that he felt compelled to make a public statement on it?
Or is it Milliband and the increasingly reality divorced leadership playing to their base by deploying those intensely loaded words ‘Tax Dodge’. Boo! Boo, I say! Tax dodging BAD, business man BAD.
Fer chrissake if they’re going down this route why not drop the fig-leaf and just have Ed M scream from the rooftops “PESSINA STRANGLES KITTENS”.
Nail on the head, and with the only policy announcements being a man who isn’t even standing announcing another bribe for the Scottish paid for by robbing the English, I really can’t understand where this campaign is going.
The problem with putting a credible position forward regarding business os you have to have experience of…….running a business.
Even someone running a corner shop knows more about business than anyone who hasn’t run one.
I was in the pub trade as a self-employed tenant licencee , two pubs, both town centre, one doing food and functions, one just a traditional boozer. Employed a dozen regular staff and more ‘on-call’ for functions etc (which actually made me bigger than three quarters of the SMEs in the country), and all the smart-arses that worked for regional development etc with their business degrees talked out of their arses and no-one on the Manchester Chamber of Commerce thought neither they nor the politicians who had never had a business, actually knew wtf they were on about. But they did make very pretty colourful powerpoint displays. meaningless – but pretty.
Big opportunity for Moribund to lay out some policy in response to the comments. Instead we get an ad-hom attack which leads to more business leaders jumping in to say Labour would be a disaster. Who is advising Miliband to do this ?
As others have made good points about Labours lack of business acumen and statist view that all wealth and income is the property of the state, I shall say no more.
Lets see a bit more CSR from these CEO’s head of companies based in Britain. And lets see them paying up on their tax, instead of squirreling it away in Monaco and elsewhere. We need to Name n Shame these Tax Dodgers. They are no friends of Labour until they behave more responsibly, and set an example to their staff.
I’m in favour of better relations with Business especially SME’s but I am not a friend of Tax Dodgers that feed on the gullibility of the Public.
“but I am not a friend of Tax Dodgers that feed on the gullibility of the Public.”
Frighteningly naive statement that Swart. Tax avoidance is perfectly legal. The government puts those loopholes there specifically to be used by the rich so that it doesn’t frighten them. In fact, Osborne has closed many and there is less manoevre room than there was under the previous Labour government.
Your line companies based in Britain is the killer. We live in a globalised economy and if you cosh these companies and their CEOs they will just re-locate their HQ and you lose the lot. To keep them, we have to offer them a better deal than our competitors.
A similar comparison is ISIS. Nobody likes ISIS but no government has the courage to demand sanctions on Saudi Arabia and no consumer is that bothered that they will stop using petrol.
“Pessina is an Italian living in Monaco who runs a sort-of-but-not-really UK company. What tax is he dodging then? ”
Notice that the Tories are happy to side with a foreigner poking his nose into our election when it seems to suit their cause.
The question is actually: what tax is Boots dodging? Perhaps £1.1bn according to some sources after its residence was moved out of the UK to Switzerland.
And yes it damn well does matter. If Boots is able to take advantage of the commercial environment in the UK, including the fact it trades off the coattails of the NHS, it should jolly well pay the tax on that free of artiifical profit reduction measures such as being loaded with post acquisition debt.
Always amused at “patroitic” rightwingers cheering on the fundamnetally unpatriotic act of corporates exporting tax revenue to other countries.
@BenM: Boots the Chemist quite legitimately minimises the amount of its profit confiscated by government. Nothing illegal in that and, given that Boots’ statutory responsibility is to its shareholders and not any of the assorted governments within whose jurisdiction it operates, entirely moral.
Boots pay the taxes it has to, its employees pay the taxes they have to and I have no doubt that Pessina has made arrangements to pay the taxes he has to.
Paying tax isn’t patriotic, it’s a legal obligation. Putting your soft white body between BenM and the Queen’s enemies, as I rather suspect Tafia spent some years doing, that’s patriotic.