Nagging doubts about Labour 100 days on

`Raging against so-called excess might make good copy but at what point does it spill over into a more general antipathy towards business as a whole and the pursuit of profit?'

Labour reaches the end of its first 100 days in power in an unfamiliar position. On the defensive. The loss of the Uxbridge by-election, Robin Cook's marital break-up, the Gordon McMaster suicide and the mishandled affair of Lord Simon's BP shareholding have conspired to present a picture of a Government less in control than it likes to be. To top it all, interest rates have just gone up for the fourth time since Tony Blair took office, increasing the payment on the average mortgage by pounds 40 a month.

Harold MacMillan had an explanation for the sort of quicksand Labour has suddenly run into. Asked once what was hardest thing to handle in government, he replied: "Events, dear boy, events."

Well, the events of the last 10 days bear out that adage. If they make Labour appear more human as a party, more fallible as a government, perhaps that is no bad thing. The stage-managed, news-managed, Mandelsonised way Labour has conducted itself since 1 May has begun to wear a little thin. It has encouraged those who argue Labour is more about style than substance, that it prefers slogans to policies. The critics think they have exposed a "rhetoric gap" between its words and actions.

Labour's response, unfortunately, has been to come up with another gimmick wrapped in a slogan. Mr Blair, we were told yesterday, is going to produce an annual report so that the "shareholders of Britain plc" can see how well Labour's performance is measuring up to its promises.

This is an irrelevance. Worse still, it distracts attention from the real substantive progress Labour has made, notably in economic management, but also in the regulation of the City, the implementation of competition policy and its commitment to tackle unemployment.

No one could seriously accuse Gordon Brown of not having had a seismic impact since taking over as Chancellor. The decision to give the Bank of England operational independence to set interest rates ranks as one of the most significant constitutional changes since the War.

The jury is still out on how well the policy is working and will remain so until well into next year. It will take until then to reach a judgment on whether the strategy of gently nudging up interest rates a quarter point at a time has succeeded in keeping the cost of borrowing lower than it otherwise might have been, while still delivering a soft landing for the economy.

There is a legitimate fear that it will produce a stand-off between monetary and fiscal policy, encouraging expectations of higher rates and thereby pushing the pound to unsustainable levels. That concern was fuelled by the very modest personal tax increases announced in the Budget at the expense of higher taxes on business. Until this week, the ammunition was mounting. But the Bank's latest tactic of combining another rise in rates with a broad hint that there would be no more for the foreseeable future seems to have done the trick in bringing sterling back down to earth for now.

Similarly, the decision to strip away the Bank's responsibility for banking supervision and bring it under one roof along with all the other City regulatory bodies marks a sea-change. The creation of super-SIB is certainly the most significant regulatory change since the 1986 Financial Services Act.

There are questions about how this new overarching body will work. There is a worry that the advantages gained from bringing separate regulatory functions together will be negated by the unwieldy and bureaucratic animal that emerges.

There will be ample scope for power battles and there will be plenty of room for empire building, especially given the size of the new headquarters the super-SIB is hunting for. But no one can argue with the boldness of the strategy.

As far as competition policy is concerned, the reassurance, initially at least, came in what the President of the Board of Trade, Margaret Beckett, promised not to do. There would, she said, be no change in the burden of proof in takeover cases nor any change in the policy of vetting mergers on the basis of their impact on competition.

The decision to replace the Monopolies and Mergers Commission with a more broadly based Competition Commission and grant the Office of Fair Trading new powers to fine companies engaged in cartels or anti-competitive agreement are also a step forward. The previous government pledged to do much the same but never quite found the Parliamentary time.

Similarly, there can be few grumbles with the reform of the Private Finance Initiative, while Labour has made enough noises to suggest that neither the Social Chapter nor the national minimum wage will prove quite the bogeymen business once feared.

So far, so good. The equity markets have taken New Labour in their stride, the FTSE 100 index rising by 10 per cent since the election, even though the performance of gilts has been less impressive.

The nagging doubts about Labour concern not the broad sweep of its changes but whether, for all Mr Blair's words, it really is a pro-business government. On the one hand Mr Blair has gathered to his breast a small coterie of "can do" business leaders whose endorsement he touchingly believes will cement Labour's credentials with the rest of the business community. Step forward Sir Peter Davis of the Pru, Martin Taylor of Barclays, Gerry Robinson, Alan Sugar and, until he blotted his copybook by being beastly to his cabin crew, Bob Ayling.

On the other, the savage treatment meted out to Railtrack, for a set of profits that were hardly exceptional, and Camelot, for executive bonuses that merely reflected its money-raising success, suggests that Old Labour, red in tooth and claw in a different way, lurks not far beneath the surface.

Raging against such so-called excess might make good copy but at what point does it spill over into a more general antipathy towards business as a whole and the pursuit of profit? Despite her policy statements, Mrs Beckett seems to be intent on referring or blocking every merger that lands on her desk, not always with the backing of her competition experts. Is this to protect consumers or is it really because she dislikes corporate activity?

The Chancellor has spoken often and at length about how New Labour will foster enterprise and sweep away barriers to growth and productivity. But in his attempt to be more "businesslike" by dressing down both for the Mansion House speech and the annual CBI dinner, was he really betraying his latent distrust, even dislike of the City?

The one consolation is that the Conservatives have scarcely won any more business friends during Labour's first 100 days. The attack on such a distinguished businessman as Lord Simon may have drawn blood. But in doing so the Tories seem to have completely forgotten which side their bread is buttered on.

Suggested Topics
Life and Style
life
Arts and Entertainment
Diana from the Great British Bake Off 2014
tvProducers confirm contestant left because of illness
News
Brad Pitt and Angelina Jolie reportedly married in secret on Saturday
peopleSpokesperson for couple confirms they tied the knot on Saturday after almost a decade together
Sport
footballLive: Latest news from Champions League draw
PROMOTED VIDEO
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Junior Asset Manager

£25000 - £35000 Per Annum: The Green Recruitment Company: Job Title: Junior As...

HR Generalist (standalone) - Kent - £30,000

£28000 - £30000 per annum: Ashdown Group: HR Generalist / HR Officer (standalo...

Oracle Developer/IT Analyst

£35000 - £36000 per annum + benefits: Ashdown Group: A market leading financia...

Investment Analyst

£33000 - £40000 Per Annum Discretionary profit share: The Green Recruitment Co...

Day In a Page

Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone
Amazon is buying Twitch for £600m - but why do people want to watch others playing Xbox?

What is the appeal of Twitch?

Amazon is buying the video-game-themed online streaming site for £600m - but why do people want to watch others playing Xbox?
Tip-tapping typewriters, ripe pongs and slides in the office: Bosses are inventing surprising ways of making us work harder

How bosses are making us work harder

As it is revealed that one newspaper office pumps out the sound of typewriters to increase productivity, Gillian Orr explores the other devices designed to motivate staff
Manufacturers are struggling to keep up with the resurgence in vinyl records

Hard pressed: Resurgence in vinyl records

As the resurgence in vinyl records continues, manufacturers and their outdated machinery are struggling to keep up with the demand
Tony Jordan: 'I turned down the chance to research Charles Dickens for a TV series nine times ... then I found a kindred spirit'

A tale of two writers

Offered the chance to research Charles Dickens for a TV series, Tony Jordan turned it down. Nine times. The man behind EastEnders and Life on Mars didn’t feel right for the job. Finally, he gave in - and found an unexpected kindred spirit
Could a later start to the school day be the most useful educational reform of all?

Should pupils get a lie in?

Doctors want a later start to the school day so that pupils can sleep later. Not because teenagers are lazy, explains Simon Usborne - it's all down to their circadian rhythms
Prepare for Jewish jokes – as Jewish comedians get their own festival

Prepare for Jewish jokes...

... as Jewish comedians get their own festival
SJ Watson: 'I still can't quite believe that Before I Go to Sleep started in my head'

A dream come true for SJ Watson

Watson was working part time in the NHS when his debut novel, Before I Go to Sleep, became a bestseller. Now it's a Hollywood movie, too. Here he recalls the whirlwind journey from children’s ward to A-list film set
10 best cycling bags for commuters

10 best cycling bags for commuters

Gear up for next week’s National Cycle to Work day with one of these practical backpacks and messenger bags
Paul Scholes: Three at the back isn’t working yet but given time I’m hopeful Louis van Gaal can rebuild Manchester United

Paul Scholes column

Three at the back isn’t working yet but given time I’m hopeful Louis van Gaal can rebuild Manchester United
Kate Bush, Hammersmith Apollo music review: A preamble, then a coup de théâtre - and suddenly the long wait felt worth it

Kate Bush shows a voice untroubled by time

A preamble, then a coup de théâtre - and suddenly the long wait felt worth it
Robot sheepdog technology could be used to save people from burning buildings

The science of herding is cracked

Mathematical model would allow robots to be programmed to control crowds and save people from burning buildings
Tyrant: Is the world ready for a Middle Eastern 'Dallas'?

This tyrant doesn’t rule

It’s billed as a Middle Eastern ‘Dallas’, so why does Fox’s new drama have a white British star?