Speaking at the Fabian Society New Year Conference today, Jeremy Corbyn announced a raft of policies designed to move Labour sharply and explicitly to the left. They ranged from universal healthcare and a lifelong education service to controversial ‘pay ratios’ for businesses, to make sure ‘rewards don’t just accrue to those at the top’.
The Conservatives are likely to use the ‘pay ratios’ proposal to depict Corbyn’s Labour as anti-business and ‘anti-aspiration’. But Corbyn was nevertheless right to make the suggestion. As he pointed out, such an idea is far from anti-business. OECD research has shown that substantial wealth inequality ‘actually holds back growth’. And research in Germany has found that companies with a smaller pay gap between senior executives and junior staff are more productive and profitable, especially when staff have John Lewis-style shares in the company.
Laying out such proposals now and in such a way, however, may prove a mistake.
The latest polling shows that just 22% of the public think Corbyn would make a good Prime Minister, while 42% think Cameron is performing well in the role. The uncertain terms of Corbyn’s proposals will do nothing to alter these figures. Rather than making clearly defined proposals, Corbyn is still trying to push a new, supposedly more democratic politics for the Labour Party by presenting his policies as works in progress and still up for debate, describing them as ‘ideas under discussion’.
Corbyn’s polling has been poor on most fronts, but one of the worst areas by far is the economy. He simply cannot afford ambivalence and uncertainty on economic policy – and certainly not on radical and controversial ideas like pay ratios. Faced by a Conservative Party that has carefully cultivated a reputation for economic certainty and stability – sometimes even against the facts – Corbyn needs clear and persuasive policy proposals, not vague works in progress.
As for timing, Corbyn has chosen a difficult week. On Monday the 11th, Cameron made a fairly successful play for the political centreground with his speech on inner city poverty. Deploring inner city ‘sink estates, he pledged £140 million for a new development programme to move sink estate residents in new and improved housing. It’s an area Corbyn would do well to defend, seeing as the housing crisis will be a major battleground in Sadiq Khan’s mayoral election campaign. But his response was sadly limited, simply scorning Cameron’s £140 million as a ‘drop in the ocean’.
The housing crisis has escalated enormously during Cameron’s premiership. Sadiq Khan has been capitalising on this and holding Cameron to account in London, but Her Majesty’s Most Loyal Opposition will not be doing its job until Corbyn does the same for the rest of the UK. With the housing crisis at its peak and ‘Dickensian levels of homelessness’ being reported, Cameron should not be able to take the centreground and claim to be the leader of the working class party. But without proper scrutiny from the opposition, he can. Corbyn’s pay ratio policy is sound, potentially popular, and, if implemented, would probably actually improve the productivity and profitability of businesses. But Cameron is making a play for the centre and unless Corbyn stops him and holds him to account, he will find it all-too-easy to portray Corbyn’s Labour as hard-left, anti-business and, ultimately, irrelevant to the British public.