Despite the economic turmoil unleashed by the banks last week, Gordon Brown has signaled that New Labour’s love affair with finance and big business will continue.
Brown had begun New Labour’s conference in Manchester last weekend by attacking “unacceptable” behaviour in the City of London.
The prime minister criticised high dividends and executive pay while treasury chief secretary Yvette Cooper told conference delegates that executive pay had to be restrained this year.
Within hours the media was attacking Brown for moving to the left.
Guardian journalist Martin Kettle even claimed that Brown had “unleashed a torrent of old-time anti-capitalist rhetoric”.
Brown’s response was rapid. He insisted that Labour is “a pro-business party” as he tried to scotch talks that he was sanctioning a move to the left.
All the Labour leaders came together to sing from the same pro-business hymn sheet.
Brown quickly backtracked on executive pay, saying it was up to the City watchdog, the Financial Services Authority (FSA), to police bonuses.
This was the same body which failed to act over the collapse of the Northern Rock earlier this year.
The FSA’s new chairman is Lord Turner of Ecchinswell, the former head of the CBI bosses’ organisation. He told Sky News that regulators should not get directly involved in what people are paid.
Then chancellor Alistair Darling moved to further quell speculation about any attempts to limit earnings in the City.
He said, “You need to remain level-headed and avoid knee-jerk reactions and saying things that don’t look so good in a few weeks time.”
He also categorically ruled out a windfall tax on the energy companies’ obscene profits.
When told that centre-left MP Jon Cruddas had claimed that the cabinet might still approve the measure, Darling replied, “No, I have made that pretty clear.”
Business secretary John Hutton rejected talk of tax increases for the rich saying wealth creation should never “be taken for granted or put at risk”.
He assured delegates that “this government will always look to create the best possible conditions to ensure British companies can succeed, no matter what other pressures we face”.
Kitty Ussher, the City minister, stressed that “nothing should be inferred” from talk of action on financial services regulation.
She repeated New Labour’s clear message, stating, “We are definitely the pro-business government, we need business to succeed.”
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