As David Cameron and Ed Miliband renew calls for a new form of ethical capitalism, Channel 4 News asks whether this latest political cause celebre will have any electoral or practical impact?
Two speeches; two party leaders; one message – or so it seemed this morning.
Both Ed Miliband and David Cameron set out their vision for a renewed financial system: David Cameron announced plans for a co-operative bill, building on Nick Clegg’s proposals for a ‘John Lewis’ economy, that would get rid of “barriers” and allow employees to have a greater stake in their companies.
On the same day, Ed Miliband called on the prime minister to tackle the “surcharge culture” that sees consumers “fleeced” by powerful companies and called for an end to hostile takeovers for profit that he said has blighted British business.
In recent weeks, both parties have moved on to very similar ground and are using the ‘capitalism-with-clauses’ lingo.
But while David Cameron called for a more “popular” capitalism, Mr Miliband wrote in an article for the Financial Times the debate should be about more than a “rebranding”, saying: “I think they seriously underestimate the scale of the change we need”.
“When I’ve talked to him [Ed Miliband] he’s very clear in talking about inequality and poverty going up as the biggest failure of New Labour,” Sunny Hundal, editor of the blog, Liberal Conspiracy told Channel 4 News.
When I’ve talked to Ed Miliband he’s very clear in talking about inequality and poverty going up as the biggest failure of New Labour. His view is that we have to reconstruct society in lots of different ways to make sure there is more transparency in the financial system. Sunny Hundal, Liberal Conspiract editor
“His view is that we have to reconstruct society in lots of different ways to make sure there is more transparency in the financial system.”
Ed Miliband wants to put workforce representatives on company boards and pay committees, whereas the Conservatives are happy with more transparency which they feel will change the culture without the need for legislation.
Surprisingly, it is Mr Miliband’s policy that meets with the approval of the right-leaning think tank Reform: “Labour is more serious about this than the Conservatives,” Reform’s director Andrew Haldenby told Channel 4 News.
“The coalition is leaping with great speed on the band wagon, but it runs deeper. I think Labour will be happy for this to go further, and I think Labour is winning the argument in this.”
However David Cameron first spoke about necessary changes to capitalism before he was elected, and in 2009 – a year after the credit crunch began – used a speech at Davos to argue that it is “time to decentralise economic power, to spread opportunity and wealth ownership more equally through society and that will mean, as some have put it, recapitalising the poor rather than just the banks.”
But have his policies since reflected this vision? The Conservatives have shown a willingness to tackle tax evasion and the Vickers report on banking reform looks set to be welcomed by David Cameron, George Osborne and Vince Cable.
Eamonn Butler, director of the right-leaning Adam Smith Institute told Channel 4 News that Mr Cameron hasn’t had the chance to put his ‘positive’ capitalism into practice.
Cameron took office at a time when people were looking at the Thatcher legacy. Therefore I think he came out with a rhetoric that capitalism can’t do everything, but when it does work properly, it is quite moral and responsible. Eamonn Butler, Adam Smith Institute director
“He took office at a time when people were looking at the Thatcher legacy,” said Dr Butler. “Therefore I think he came out with a rhetoric that capitalism can’t do everything, but when it does work properly, it is quite moral and responsible.”
But not everyone on the right agrees that Cameron’s pledge for more morality in the system is genuine: “The party leaders are making these speeches, but every single other bit of their [Conservatives] policy is against it: they call for less regulation in business, smaller government – certainly all their business policies are about stronger business, less red tape,” said Mr Haldenby.
In the throes of economic recession, banker bashing is almost a necessary prerequisite of getting elected, and it seems the idea of ‘responsible’ capitalism is now seen as another vote winner.
But Dr Butler points out that this way of understanding the market has always been present among right-wing thinkers. “There is a long tradition of intellectual thought that business is a highly moral process. In a competitive market you only make profit if you serve people,” he said.
However making capitalism more palatable is short-term aim, Mr Haldenby told Channel 4 News, who doesn’t believe the public – 80 per cent of whom work in the private sector – will care about it in five years time.
“The sense of injustice about the banks – that is obviously a core part of public feeling,” he said. “But the idea that our whole capitalist society has gone wrong? I don’t think people think that.”
Whether or not they do, it is unlikely that speeches alone will be enough to capture public imagination.
“I actually think that voters are much more cynical than before and won’t easily be persuaded by talk,” Mr Hundal told Channel 4 News. “It is big, bold and symbolic measures which will really bring home the concept for ordinary people.”