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Labour accuses big business of ‘siphoning away’ taxpayers’ money at start of conference

Exclusive: Senior shadow cabinet figure tells The Independent corporate chiefs are ‘sat on piles of cash’

Joe Watts
Political editor
Sunday 24 September 2017 08:27 BST
Comments
Labour leader Jeremy Corbyn speaks at a rally in Brighton ahead of his party's annual conference
Labour leader Jeremy Corbyn speaks at a rally in Brighton ahead of his party's annual conference

Labour has accused big business leaders of “siphoning away” taxpayers’ money into their own pockets, leaving young British people without the future prospects they deserve.

A senior figure in Jeremy Corbyn’s shadow cabinet attacked corporate chiefs for “sitting on piles of cash” that should have been spent improving skills for young workers.

In an exclusive interview with The Independent Shadow International Trade Secretary Barry Gardiner warned executives they had missed a chance to show they could be trusted to meet their obligations to society and promised a Labour government would make them pay.

It comes after businesses returned to Labour conference this year, keen to understand what the future might hold under a Corbyn government in the light of the party’s better than expected performance in the election.

Hundreds of extra business delegates are attending the event which officially begins on Sunday. Large corporations like BT, Aviva and energy provider E.On are paying for fringe meetings and a business forum event is set to be ram-packed.

The revival has led Mr Corbyn to declare that Labour is now “the natural party of business”, but Mr Gardiner made clear that did not mean the private sector would escape facing up to its responsibilities.

Ex-Chancellor George Osborne chartered a course to lower corporation tax from 28 per cent in 2010 to its current 19 per cent level today, with it set to fall further to 17 per cent. But Mr Gardiner said the change had been made on the understanding the windfall would in part be spent developing young people’s skills.

He said: “What they have done is they’ve paid out to their shareholders and they have sat on piles of cash in their reserves. That’s why we said that we would raise back up that corporation tax in order to fund student fees and other parts of our education programme.”

“They shouldn’t be surprised in any way when a Labour government comes along and says ‘look, we know that left to your own devices you simply take this money and pocket it’,” Mr Gardiner added.

“That’s not why the public, the Government, has reduced your tax bill. They have reduced your tax bill in order to grow the economy, not simply to see it siphoned away into a few people’s pockets.”

The former businessman, who worked in the City for 12 years, said the issue linked directly to anger over immigration, with corporations having relied on importing people with skills rather than taking time to invest in the British workforce.

Barry Gardiner, Shadow Secretary of State for International Trade

The Independent recently polled various Labour manifesto policies, with those representing a crackdown on corporate excess proving highly popular – in particular a measure to cap the pay of top executives at a specific ratio of a firm’s lowest-paid worker won overwhelming support.

Mr Gardiner said: “The idea that somebody in the same company can say to somebody else in that company, ‘you are earning below the average wage of £28,000 a year, and yet I in this company am earning, in some cases, 50 times as much as you are’…it is just to treat your colleagues with contempt.”

He pre-empted the inevitable attack from critics that his words are “anti-business”, saying: “This is not anti-business in any way whatsoever. It is about saying look, let’s ensure everyone in a company has a stake in the company, they want it to do well, because they know if it does, they also do well.

“It’s common sense. It’s what people want. As The Independent’s poll found out, this isn’t a case of saying ‘this is something people should think about’.

“They already think it. They think ‘who are the bozos who think it’s right that somebody should be earning £10m a year, when somebody in that company is being paid less than £25,000. They think it doesn’t make sense, and it doesn’t.”

Barclays, NatWest, the London Stock Exchange and accountants KPMG are also sponsoring fringe meetings at conference. Mastercard, Centrica, PricewaterhouseCoopers, Microsoft, Google and Hitachi also have a presence in Brighton.

In 2016 there were 1,832 business delegates at Labour’s conference, but this year a total of 2,757 have signed up. There are also reports that 25 per cent of stands at next year’s conference have already been booked.

As well as reacting to the election result, many business leaders like the party’s softer stance on EU withdrawal amid fears over disruption from a hard Brexit desired by some Conservative ministers.

But as firms try to ascertain what the party would do in the wider country, there is also an internal transformation taking place, with rival factions trying to reshape the party. In particular, there are plans to lower the number of MPs that a future candidate needs to enter a Labour leadership contest, from 15 per cent of the parliamentary party to 10 per cent.

Mr Gardiner warned Labour colleagues that the public is not interested in internal rule making procedures.

He added: “What they think is important, is ‘what is this bunch going to do for me if I vote for them?’.

“They don’t give a monkeys about 15 per cent, 10 per cent, 50 per cent, that’s not the issue. The issue is what’s our policy.

“And the one thing we know is that our manifesto in 2017, people liked it. That’s what we have got to focus on. That manifesto would not have been there, except for Jeremy Corbyn. Let’s be clear about that.”

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