Pass the megaphone Alex, we’re all anti-capitalists now. Scotland’s First Minister, Alex Salmond, was taken to task last week by commentators and businesspeople for joining demonstrations against job losses at Diageo’s Johnnie Walker plant in Kilmarnock. Lord Mandelson, First Secretary, has laid into the Phoenix Four who bought MG Rover for the price of a petrol cap and made off with £40 million. It’s raised the whole question of whether it’s right and proper for senior politicians to clash openly with business. Charges of hypocrisy and grandstanding abound. Do they really care or are they just after cheap populist votes?
It was undignified, we were told last week, for Alex Salmond to be behaving like Arthur Scargill or Jimmy Reid. Criticising one of Scotland’s largest firms for putting profit before social responsibility. The head of CBI Scotland, Iain McMillan, condemned Salmond’s behaviour for putting future investment at risk. Though the people of Kilmarnock rather liked the idea of a politician rolling his sleeves up for once and actually getting down to street level.
At First Minister’s Question Time Salmond made no apologies for his megaphone diplomacy. “I am proud of my attendance at that rally”, he barked at the Labour benches. “I’m proud of the workers and council and unions and all parties who attended that rally, I thought it was a formidable and inspiring demonstration of people anxious to defend their right to work and their communities”. Labour really hate it when Salmond outflanks them on the left and they looked sick as the proverbial parrot as he all but accused their leader Iain Gray of siding with the class enemy.
But while we all enjoyed the knock about, there is a question about the FM’s credibility here as a born again class warrior since he has been so conspicuously committed in recent years to private enterprise, low taxation and deregulation. Diageo bosses dismissed the proposals made by the Scottish government task force on Kilmarnock as politically motivated, economically illiterate and likely to jeopardise 4,000 other jobs in the drinks giant. They understood the market a lot better than politicians, claimed Diageo bosses, and Salmond should leave commercial decisions to the people who have to live with the consequences and answer to their shareholders.
Critics said that Salmond was only ‘grandstanding’ and hunting for votes in an SNP target seat, but that’s what politicians do. Listen indeed to Lord Mandelson, the business secretary, laying into the “Phoenix Four” shysters who took the money from the MG Rover rescue and ran. Mandelson reached for the megaphone to make clear to Labour voters in the Midlands, where Rover used to support 50,000 jobs, that he was on their side and felt their pain. He rather theatrically threatened the directors with legal action if they dared to set up in business again in Britain. It would have been churlish to point out that it was a Labour Trade and Industry Secretary, Stephen Byers, who handed MG Rover to the Phoenix Fraudsters.
MG Rover’s fate was a vivid illustration of what has happened to British capitalism during the Labour decade when the economy turned from making things to manipulating debt. The Phoenix Four used complex financial engineering – setting up new companies with obscure relationships to offshore tax havens – which allowed them to gain from shifting debt and assets around the monopoly board. But they didn’t break any laws. Indeed, by the degraded standards of modern business practice, they should probably be commended for their ingenuity. Modern turbo capitalism doesn’t have much time for sweaty men in overalls making things, whether it’s cars or whisky.
There was something richly ironic in Peter Mandelson attacking businessmen for indulging in dodgy deals. He had to resign twice from the cabinet over his complex relations with wealthy individuals. The first time was over a housing loan from the Labour minister, Geoffrey Robinson and the second was after allegations that he had helped an Indian businessman to get a British passport. Lord Mandelson now lives in a £2.2 million pound house overlooking Regents Park purchased entirely legitimately through legal earnings. He has been spending a quality time with Russian oligarchs like Oleg Derispaski on his yacht in Corfu.
No one could accuse Alex Salmond of enriching himself or supping with oligarchs. Though he did rather become a cheerleader for Scotland’s banks, especially RBS, before it was revealed as the world’s worst bank. Perhaps, indeed, that experience made him rethink his uncritical endorsement of private enterprise. For in the end he is right. Firms do have a social responsibility, just like everyone else, and it doesn’t do any harm for them to be reminded of that every now and again, with or without the megaphone.