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We know what we are against, but what are we for? Ed Miliband struck a chord with many people when he contrasted the evils of ‘predatory capitalism’ with the virtues of ‘productive capitalism’. Almost all of us hate the banks’...


We know what we are against, but what are we for? Ed Miliband struck a chord with many people when he contrasted the evils of ‘predatory capitalism’ with the virtues of ‘productive capitalism’. Almost all of us hate the banks’ obscene bonuses, irresponsible lending habits and scandalous mis-selling practices of recent years. We despise international companies that dodge national taxes. We can’t stand employers who exploit their workers, cheat their customers and pollute the environment. We want a new settlement between government, capital and labour. But what should that settlement look like?

The answers to that question are important for their own sake: the market system is plainly not working as well as it should. But, in addition, the answers are politically urgent. Across the spectrum, smart politicians are grappling with the issues – Vince Cable in his work as business secretary, for example, or Jesse Norman, a Conservative MP who has written with real insight about the need to replace ‘crony capitalism’ with a version that will serve the interests of the country as a whole.

True, any prospectus for a better capitalism will require intellectual heavy lifting. But precisely because the political competition in this area is now intense, public opinion matters more than ever. Ordinary voters may not supply the expert witnesses, but they will provide the jury What do they think, after five years of economic weakness, three years of coalition rule and two major conference speeches by Ed Miliband seeking to redefine Labour’s purpose? The Fabian Society asked YouGov to explore public attitudes to predatory, crony and productive capitalism. Where do voters think things have gone wrong, and what would they like done now?

First, we asked respondents to choose between two views of Britain’s recent problems. Do they flow from some specific mistakes that need to be corrected, or from more deep-seated failings in our society? The answer seems emphatic:

“Many people, including governments and the banks, made mistakes; but there was nothing fundamentally wrong with Britain’s economic system. Once the present period of adjustment is over, we should be able to return to steady growth and low unemployment”: 15%

“Britain’s recent problems have exposed fundamental problems with the way our economic system works. The ways in which government, banks and major companies operate will have to change radically before prosperity is likely to return to British families”: 67%

Neither/don’t know: 18%

However, answers to the next question suggest that ideologically-minded people on the left and right have a different view than normal voters of what “fundamental” means. We listed 16 possible causes of “Britain’s economic problems” and asked people to pick up to “four or five” that they blame most. The first point to make about the results is that this was a question that fired up our respondents. Far fewer than normal said “none” or “don’t know” – a mere 6 per cent.

The second point is that the three causes that outstripped the others, and by some distance, had nothing to do with the ideology of the market. Two of them concerned people behaving badly (banks lending recklessly and people living beyond their means) while one flows from a policy that the public thinks successive governments have got badly wrong: immigration.

I have grouped the causes into four groups of four – bad behaviour, policy mistakes and ideological critiques from both the left and right (respondents were not shown these four headings: they simply saw the 16 items in a randomised order). Failures of ideology make an appearance, but are not generally thought to be central to Britain’s problems.

True, the picture is slightly different when we look at the results by party loyalty. Labour voters are concerned about growing inequality (cited by 56 per cent). But this is on a par with, rather than miles ahead of, the two big behavioural errors to do with bank lending and out-of-touch politicians. And Labour voters are twice as likely to cite “excessive immigration” (39 per cent) as globalisation (21 per cent).

If anything, this analysis overstates perceptions of ideological failings by including government spending as part of the right-wing critique of our economic condition. Only 11 per cent blame excessive taxes. This is a better indication of whether people think the balance of public and private spending is fundamentally wrong: the relatively high figure for government spending is probably a reaction more to Britain’s current huge government deficit than to a deep-rooted judgement about the size of the state.

We then offered seven strategic options for the future: broad principles rather than detailed policy ideas. Respondents were invited to select up to three they most supported. Once again, we find that people have a specific view of what it means to solve fundamental problems: they want the present mixture of market forces and state action to work better, not a new ideological direction.

Thus, the top four broad-brush solutions to our problems are deemed to be education, infrastructure spending, more corporate responsibility and long-term stability for business. The remaining, more ideological propositions lag some distance behind in the last three places: the left’s call for tougher regulation, the right’s call for leaving business alone and the corporatist passion for new institutions in which business and employees work together.

The centre of gravity of public opinion is a desire for a capitalism that avoids both the perils of complete laissez-faire and the burden of an overly intrusive state. Had the label not been tried, mocked and spat out, one would be tempted to call it a third way. But what are the specific features of a better capitalism that would win public approval?

We tested eight proposals for government action and asked in each case whether people thought it would improve, worsen or make no difference to “the living standards and future prospects of you and your family”. Four proposals are extremely popular, with more than half the public saying they would make a positive impact: making large companies do more training, lifting the minimum wage by around £2 an hour to a “living wage”, breaking up the six big energy companies to increase competition, and changing company law so that directors have a legal duty to consider the social, community and environmental consequences of their decisions. In each case, fewer than 10 per cent think the change would make life worse.

Two more proposals also meet little resistance, but with fewer than half saying their family would benefit, and a large minority declining to take sides: putting workers on company boards and using public procurement to reward companies that behave well.

The final two proposals have more supporters than opponents, but provoke a hostile reaction from significant minorities: innovation groups for city regions, and making the minimum wage more flexible, so that it is set for each industry by agreement between employers and workers. Among Labour voters, a flexible minimum wage is the one proposal that provokes more opposition than support. This is consistent with other YouGov polls that show a widespread reluctance for local communities to be able to amend national standards. For example, most of us want an NHS that give us access to the same drugs and the same operations no matter where we live. We don’t want medical priorities to be decided locally: we fear that this would reduce our rights rather than enhance our care.

But if we don’t want national priorities to be challenged locally, what things can be done in our own communities? The top priority is the same as for national government: more training and apprenticeships. This is significant. Whether we ask about broad strategy, specific policy or local actionvh, training emerges as the people’s top priority. One of the most persistent features of the financial crisis has been the difficulty of young people getting a good job – and, often, any job. Any party that can seize this agenda will be well placed to win over floating voters at the next election. A slick policy and a single speech won’t be enough: an intelligent and sustained campaign is needed, and of a form that demonstrates seriousness of purpose and does not use the issue as a stick with which to beat other parties.

There is also widespread support for what might be termed local patriotism, such as buying supplies locally, giving jobs to people who have lived locally for some years, helping smaller local business and working with local schools and colleges. I doubt if many people think this can defend local communities against the challenges of globalisation. I suspect it is more to do with a sense that our lives are now often buffeted by forces beyond our control – forces that demonstrated their awesome power at the time of the global banking crisis in 2008 and in the recession that followed. We welcome whatever small steps can be taken locally to fend off these larger forces.

All in all, people think Britain’s old political economy has failed us, but they are wary of building a new political economy on foundations of ideology. Most people want fundamental change, but not the kind of radical change that people on the left (or, indeed, the right) often demand. Rather, most of us want a society that is fundamentally better educated, has a fundamentally better infrastructure, promotes a fundamentally more socially responsible business culture and has fundamentally better-run banks. These are all huge challenges. The party that is seen to rise to them won’t be the one that offers neat and simple prescriptions but the one that can persuade voters it has practical ideas – and also demonstrates the competence and commitment to provide an effective government and actually implement them.

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