Bosses v Miliband: a defining chapter in the General Election campaign?
Leaders of top British firms openly criticise Labour chief’s tax and economic plans as political temperature rises
As predecessor Gordon Brown found out to his cost during the 2010 General Election, the British economy is a decisive factor in General Election campaigning. And this year, it will be Ed Miliband’s turn to test his wits on the issue against Tory prime minister David Cameron and Lib Dem deputy PM Nick Clegg.
Miliband has already pledged that, if he successfully leads Labour to victory in May, he will tackle high levels of executive pay, restore the 50p top rate of income tax, impose a “mansion tax” on homes worth more than £2 million and freeze energy companies’ prices for 20 months. However, in recent weeks, Miliband has been criticised by bosses of some of the UK’s biggest companies for those very policies, which have been cited as “anti-business.”
In recent days, Boots boss Stefano Pessina has joined the fray: in an interview with the Sunday Telegraph, Pessina described the prospect of Miliband leading the country as a “catastrophe”.
As Alliance Boots chief executive, and coordinator of a £46 billion trans-Atlantic merger of his form with US retail giant Walgreens, Pessina said that Miliband’s strategy for power is “not helpful for business, not helpful for the country and in the end it probably won’t be helpful for [Labour].”
Miliband retaliated yesterday with a dig at billionaire Pessina’s tax arrangements, stating that the Monaco-based boss should stop lecturing voters and “start paying his taxes”. At a special Ask the Leaders event organised by Sky News and Facebook, Miliband said: “It turns out that the chairman of Boots lives in Monaco and is actually avoiding his taxes. I've just got to say to you, I don't think people in Britain are going to take kindly to being lectured by someone who is avoiding his taxes on how they should be voting in the UK general election.”
In forceful language, the Opposition leader added that he would “stand up to these powerful forces” and act on tax avoidance by individuals and corporations. A spokesman for Walgreens Boots Alliance later claimed that Pessina’s remarks had been taken out of context.
However, Pessina’s criticism of Miliband seems to have marked the opening of a can of worms, as other bosses – from Pizza Express chief executive Luke Johnson to former Marks & Spencer chief Stuart Rose – made their reservations about his ambitions known.
Lord Rose, now a Tory peer, was particularly scathing – branding Miliband a “seventies throwback”. In a Daily Mail article, the former retail boss and advisor to Gordon Brown accused Miliband of ruining Britain’s pro-business consensus, adding that Labour’s “business-bashing” could curb investment and lead to “shuttered shop fronts, empty high streets and lengthening dole queues”.
“Why should they be disqualified from speaking about matters which are directly their concern?” he asked. “As a man responsible for 70,000 workers – 70,000 livelihoods supporting 70,000 families – Mr Pessina was perfectly entitled to speak out.” Instead, Rose scorned, Pessina had been confronted with a “tide of derision” and “personal jibes” from Labour quarters.
According to Rose, the public had been reassured by mainstream politicians over the past few decades that “business was not the enemy” – but “now Ed Miliband and Labour have blown that consensus apart”.
Although Miliband’s policies focus heavily on the social issues and welfare of the working and lower-middle classes in the UK, he will be mindful of the need not to alienate the business community entirely. Pessina and Rose may have pledged their allegiance to the Tories, but they are also distinctive and respected voices in the business world for their achievements.
Depending on which poll you read, the race to Downing Street seems close between Labour and the Conservatives. Jobs and industry will be one of the Conservative Party’s leading arguments for why it should achieve a majority, and the electorate – financially squeezed since the economic crisis in 2008 – will need reassurances that their own economy, in terms of their jobs and savings, is in safe hands. Infamously, Gordon Brown went into the final weeks of the 2010 election campaign without the backing of any major business leaders at all, and ended up being ousted in the Tory and Lib Dem solution for the hung Parliament. Miliband would do well to remember that.
As business and political leaders fight their respective corners in the run up to the Election, issues of authenticity are sure to become hotter topics. For more on those issues, sign up to this forthcoming CMI seminar.