by Mark Stockwell

One of the many, many issues faced by Labour’s moderate wing at the moment is that they are – perfectly understandably – so preoccupied with the short-term problem of saving their seats in June, and the medium-term one of how to oust Jeremy Corbyn and his ilk afterwards, that the longer-term challenge of putting together a viable centre-left platform is going largely unaddressed.

Those who favour trying to resuscitate a seemingly moribund party have directed longing glances across the Atlantic to Justin Trudeau’s Canada. Those who are coming to the painful conclusion that a breakaway may be necessary – with a view to triggering a full-on realignment – are casting admiring looks across the Channel to the newly-inaugurated French President, Emmanuel Macron, and his fledgling ‘la République en Marche’ movement.

But more immediate concerns have left little time or energy for thinking through what political centrists will need to do to provide an effective opposition – and, all in good time, an alternative government – to an emboldened Theresa May with a large majority at her back.

The Prime Minister is essentially campaigning for a free hand to negotiate Brexit, in the hope that increased parliamentary numbers will strengthen her negotiating hand, not just with the EU but also with potential internal critics.

She has also repeatedly made it clear, however, that she is looking to take both her party and the country in a different direction. Brexit is only a part of this story: a necessary but not sufficient condition for what amounts to a rethink of the Conservatives’ view of the role of the state in the economy. The May team’s conversion to the cause of a cap on domestic fuel bills is a recent, high-profile example of this, and recent pronouncements on ‘workers’ rights’ are also part-and-parcel of this repositioning, but the change in approach goes much deeper. It amounts to a rejection of the laissez-faire approach that has characterised Conservative industrial policy for 30 years and more (with the exception of Lord Heseltine, now paradoxically estranged from the higher echelons of the party).

The government’s proposals for building an ‘industrial strategy’, published in January, were light on detail – but some of the contours are already becoming clear. In particular, the PM and many of her key advisers have given off decidedly mixed signals regarding the desirability of foreign investment in the UK economy.

While paying lip-service to the idea that ‘the UK is open for business’, almost from day one the May administration has been willing to make noises – in public and private – calling into question the desirability of particular deals, starting with the Sino-French Hinkley Point C project (where it could at least be argued that key infrastructure and national security issues were at stake).

Indeed, even during her leadership campaign, Theresa May cited Kraft’s 2010 takeover of Cadbury as an example of a deal that should have been blocked. And when Kraft threw its hat into the ring for the Anglo-Dutch giant Unilever in February of this year, No.10 declined to comment publicly – but few doubt that the UK Government played a part in ‘persuading’ Kraft that its intentions were not regarded as strictly honourable and they rapidly withdrew their bid. This despite no key infrastructure or security issues being involved: nobody was suggesting the nation’s supply of PG Tips or Marmite would dry up in the event of a takeover, dire though such an eventuality would clearly be.

Opposition figures, such as former Business Secretary Vince Cable, and former Shadow Business Secretary Chuka Umunna, have cited the fall in sterling since the Brexit vote as a reason for a recent wave of foreign takeover bids – and also as a reason for rejecting them, arguing that they are effectively being sold off at ‘bargain basement’ prices. But the barbarians only come to the gate when they think it is poorly defended: takeovers tend to target firms where future potential exceeds current performance.

One might have thought that the shareholders – you know, the people who actually own the company – might be permitted a say in whether the price is right, but the rights of this benighted group (which may well include you and me, through our pensions funds and ISAs) seem to have been forgotten or overlooked. (In Unilever’s case, at least, the argument didn’t hold water, as the FT Alphaville column pointed out.)

The source of the political pressure is clear. Large firms like Unilever employ many thousands of people in the UK, including in a number of strongly ‘Leave’-voting areas. These are exactly the sort of people the PM has in mind when she talks of “changing how the country works – and who it works for”. It was May, of course, who famously pointed to the Tories’ reputation as “the nasty party”. By showing a willingness to intervene to ‘save British firms’ from the rapacious hands of foreign corporate fatcats, she hopes, presumably, to show that under her the Conservatives care about the fate of the people who work for them.

So where does this leave Labour – or, perhaps more accurately, the moderates of all parties and none looking to rebuild a centrist force in British politics after the election?

The sort of people May is targeting are the very people Labour has traditionally seen as its core support. Firms like Unilever are also some of the last bastions of a unionised workforce in the private sector. No surprise then that Unite was an active voice calling for the Kraft bid to be blocked to protect jobs – on a simplistic level, they wouldn’t be doing their job if they didn’t. (To be fair, Kraft had not helped themselves in this respect by reneging on an earlier promise to protect Cadbury jobs in the UK – the casus belli cited by May for her retrospective opposition to the deal.)

A combination of Brexit and Corbyn’s disastrous leadership has left not just the flanks but the very heart of the Labour Party exposed to attack. The centre needs to respond to this threat and develop a programme based on a clear articulation of the benefits of globalisation, rather than selectively pandering to populism on the grounds of expediency.

In some instances – the practical effect of the “workers’ rights” outlined by the PM on Monday, for example –  the job may be simply one of drawing attention to the gaps between rhetoric and reality. But in other areas, moderates will need to rethink their own positions. The attitude to foreign takeovers is one such.

There is all manner of evidence that injections of foreign cash and new management techniques can have a positive impact on a firm’s performance – and ultimately on the productivity of the host nation’s economy. As Oliver Kamm has written in the Times recently: “The only way of securing sustainable increases in real wages will be by higher productivity” – an observation that should not need to be made but which nonetheless bears this stark expression.

So talk of a ‘race to the bottom’ and the like is entirely misplaced: attracting foreign capital is key to improving living standards, even if a multitude of questions remain as to how the proceeds of improved productivity can be more equitably distributed. So desperate has the UK’s record on productivity been in recent years that it’s almost a case of crossing that bridge when we come to it.

More immediately, flows of inward investment also serve to paper over the cracks of the UK’s yawning current account deficit, propping up the pound’s value and preventing further erosion of living standards. Even a best-case Brexit (favourable divorce terms from the EU and high-value trade deals with other major economies) will not bridge this chasm overnight.

In a post-Brexit world especially, then, a government – or an opposition – retreating into economic nationalism and resisting inflows of capital would not be advancing the interests of low- and middle-income workers – it would be jeopardising them.

For a new Labour leader, or the leader of a breakaway force trying to establish itself as a coherent alternative to a residual ‘continuity Corbyn’ party, this provides a key differential from today’s hidebound left. Macron has successfully distanced himself from François Hollande, broken away from his old Parti Socialiste ‘comrades’, and promised to reform the sclerotic labour laws that hold back the French economy and deter foreign investors. Equally, a centrist leader in the UK could demonstrate their difference from the old left represented by Corbyn and the unions, by resisting protectionism and making a clear, coherent case for an internationalist, even globalist agenda.

In terms of opposing a rampant Conservative majority in Parliament, there would also be advantages. For one thing, many on the Government benches would find themselves in instinctive agreement with this pro-market position, as a recent ConHome editorial suggests. This is not, as some on the hard left would have you believe, a bad thing – least of all for those with ambitions of bringing about a structural realignment.

More importantly, though, building an alternative to the Conservatives will depend on being well-placed to benefit from the likely adverse consequences of a hard Brexit. It is possible of course, if these are sufficiently dire, that simply not being the party in power at the time will be enough to see the pendulum swing.

But waiting for the other side to fail – and the country to suffer as a result – is never a good look. How much easier for a party, or simply a leader, to prosper when they have resisted the obvious temptation to make tactical forays into populist territory and instead patiently, consistently made the case for a coherent, internationalist response to the challenges the UK faces.

Mark Stockwell is a former Conservative adviser

Tags: Brexit, General election 2017, globalisation, Jeremy Corbyn, Mark Stockwell, moderates

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