What will Labour’s civil war mean for business?

As we enter August, politics usually takes a back seat while we focus on the typical summer news agenda – sharks, seagulls and Cecil the Lion have willingly or unwillingly obliged this time around. For those of us who take more than a passing interest in politics, however, this year’s summer recess promises to be dominated by the long and increasingly bitter contest for leadership of the Labour Party. What started out as a fairly straightforward contest between former Government Ministers – Andy Burnham and Yvette Cooper (with Liz Kendall representing the slightly unknown quantity) – is now threatening to turn into a full blown ideological civil war, which could have major repercussions for the Party and broader political landscape.

Jeremy Corbyn’s rise from token left wing candidate (who initially required MPs to lend him their nominations in order to “broaden the debate”) to the current leadership favourite has taken virtually everyone by surprise, not least bookies who stand to lose a hefty sum after initially pricing him as 200/1. The past couple of weeks have seen a momentum shift in favour of the Islington North MP, with him securing the backing of the majority of trade unions and CLP nominations and with recent opinion polls showing that he is on course to win.

With this rise, has come shock and disbelief from the centrist ‘Blairite’ wing of the Party. For them, Corbyn is the embodiment of the radical and hard-left that has previously made the Party unelectable. As a veteran class warrior and unionist, Corbyn’s views have won considerable sympathy from left wing activists and disillusioned young Labour members. His ‘rejection’ of austerity and anti-privatisation message resonates with a significant portion of the public, but many of his views fall comfortably outside the mainstream – eg UK’s withdrawal from NATO, the abolition of the monarchy and public support for Hamas and Hezbollah. More moderate sections of the Labour Party (including many in the Parliamentary Party) have voiced concern that the adoption of these positions is emblematic of a Party slipping into its comfort zone as a platform for protest rather than a serious party of government.

Whether Corbyn can maintain this momentum and secure victory on 12 September remains uncertain. Fortunately for the other candidates, there is still well over a month of campaigning to go. Andy Burnham may yet still wrest back control of the agenda, or Yvette Cooper could emerge as a unity candidate and win through second preference votes. It is fair to say, however, that regardless of the final outcome, Corbyn’s elevation to frontrunner has ignited an acrimonious war of words between Labour Party factions and is likely to have a lasting impact. This was most bluntly demonstrated yesterday, when CWU’s General Secretary, Dave Ward, described Blairites in the Labour Party as a ‘virus’ to which Corbyn represented the antidote. Such language will only serve to raise the stakes on what has clearly become an ideological battle for the soul of the Labour Party, the consequences of which are not yet known. While a decisive shift to the left seems likely, other outcomes, such as a split in the Party cannot be discounted at this stage. Further consequences could involve a broader realignment in the UK political landscape, which may result in the Conservative Party controlling the centre ground or an opportunity for the Liberal Democrats to rebuild their support through better defining themselves against Labour as the more mainstream centre-left party.

Those who do not live and breathe party politics may question why any of this matters. Labour are, after all, not in government. For businesses and organisations that need to engage with the policy making process may soon regard the Party as off-limits as they focus all their attention with the Conservative Party. Indeed, some may argue that a Corbyn-led Labour Party would be so unelectable that it would simply lose all relevance.

While taking this position would be tempting, it may not be in their best interests. Many businesses sensibly adopt a strategic and long-term approach to public policy engagement. Key industries, such as those involved in infrastructure, energy, pensions and defence, need to ensure a cross-party consensus and non-partisan approach to its policy engagement. This balanced approach would become harder in the event of a radicalised Official Opposition. Business and organisations may also find that relevant policy issues become increasingly politicised and their operations become subject to politically driven attacks, leading to broader corporate and reputational issues.

So, this summer’s leadership campaign, which is turning more bitter and ugly by the day, should be of interest to a much broader audience than just Labour supporters and political anoraks – it could change the political and policy landscape for good.



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