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Populist Cameron trumps pathetic Labour

Interviewing the prime minister for the Sunday Telegraph, Matthew D’Ancona curiously concluded that David Cameron was a man with a mission – “to save capitalism from itself”.

Cameron is acutely aware that the system is in deep trouble and that vast numbers of people are increasingly angry about the widening gulf between them, the rich and the powerful.

A new poll has confirmed that economic fears are by far the greatest concerns. So Cameron is in a bidding war with Labour to fool a worried public that action is being taken to curb the excesses of the system. With Ed Miliband’s party in practice a semi-detached part of the coalition government, Cameron’s task is made easier.

Cameron’s trumpeted curbs on executive pay, aimed at giving shareholders a direct say in determining salary packages and pay-offs, is aimed at soothing outrage over the earnings of company directors, as is his decision to maintain the top 50p rate of tax.

People are aware that the class divide is deeper than ever. The vast majority, are disgusted at the wealth of a tiny minority. Rising prices and bills combined with rapidly rising unemployment and wage freezes have cut deep into people’s standard of living.

Anger at top people’s wealth is of course totally justified. An independent survey finds that chief executives of 87 of the FTSE 100 firms helped themselves to a 33% rise in pay and perks in 2010-11, taking their average package to £5.1million. Other directors took pay rises of 49% over the year, walking away with £2.7million each.

Small wonder then, that the Tent City occupation outside St Paul’s, which initially targeted the London Stock Exchange, has continued to strike a chord amongst large numbers of people, including City workers.

For a Conservative leader, Cameron has been harsher in his criticism than Labour of how economic growth and speculation on the markets has benefited a tiny minority. Edward Heath, the Tory prime minister before Margaret Thatcher, once famously talked of the “unacceptable face of capitalism”. 

Cameron went one better in outright populist rhetoric directed at big business. He told BBC’s Andrew Marr show, that where “there was excessive growth of payment, unrelated to success, frankly ripping off the shareholder and the customer, [it] is crony capitalism and is wrong. It’s also, and this is the key point, payments for failure”. 

It’s not the first time that Cameron and his strategy directors, who include Steve Hilton and Andrew Cooper, have invaded territory which Labour felt it could lay claim to. But that’s not difficult. Shadow Business secretary Chuka Umunna’s pathetic weekend call for a “responsible and better capitalism” hardly sets the pulse racing.

The truth is that these political leaders hope to cash in on disquiet with the system simply to keep the show on the road, just as the spectre of uncontrolled financial markets and the greatest debt crisis in history is causing economic havoc. 

The notion that shareholders can somehow regulate the fortunes made out of the system is just as harebrained as the idea that politicians can control or even influence the flows of capital through the world’s financial market. 

Giving shareholders more power will do nothing to change the spots of the capitalist leopard. Institutional shareholders like insurance companies have already presided over the biggest transfer of wealth from the majority in society to the minority. And many of them benefit from the same high earnings as the CEOs they are supposed to regulate.

Along with business secretary Vince Cable and the Labour leaders, Cameron is simply cashing in on the oh-so-threadbare but still powerful myth that capitalism can be reformed or tamed by pretending that “fairness” can be spread around. Behind all the rhetoric lies the awareness that they are impotent as the system careers further and further out of control.

Corinna Lotz
A World to Win secretary
9 January 2011

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