Last weekend was a minor revelation. Attending a BBQ for my Godson’s 18th, conversation amongst the younger guests turned briefly to politics, at their instigation…

Bright and articulate, their views on politics and politicians were excoriating. The LibDems were a ‘dead party’ they said. As for Keir Starmer…., he and the Labour Party stood for nothing, comparing him unfavourably even to Corbyn who ‘at least had convictons’. No Starmer policies could be named, just an irritation with Labour abstaining on Covid related regulations in Parliament rather than having definitive views. Johnson came out the best albeit without the bar being set very high. He at least ‘stood for something’, notably Brexit, and had more character. There was a feeling however that he was probably fairly unfit to be Prime Minister.

Oh dear. I suggested a solution was that they go into politics to raise its standards. You must be joking was the reply. Careers in the civil service, engineering and the armed forces beckoned. Umm…Politics is rapidly becoming a profession that fails to attract the brightest and best.

But turning to the Government’s Opposition, what is the problem with Labour? Having survived the Batley and Spen by-election, Starmer is on a mission to rejuvenate the Labour Party. He has a job on his hands, admittedly made more difficult in a political environment dominated by a pandemic. Last week, he travelled to Blackpool to gain the views of former Labour voters in now Tory held seats. Their response was as bad as the young, soon to be voters, above. Views varied from irritation at opposing Brexit, a focus on Labour’s history of building up debt, failing to turn round run-down areas and simply letting down core voters with a London-centric view of life. Starmer, as a leader, scored poorly.

Under Starmer, Labour recently announced a purging of hard left factions and has been tough with disloyal Corbynites. Moderates may win the leadership of Labour’s largest backer, the trade union Unite, helping his cause. But this is the Party speaking to itself without any resonance with ordinary voters. It is simply a reminder that a new centre-left party is required in the long run.

But, today, if the Labour Party is to make progress against Johnson’s often chaotic Tories, Starmer’s team needs to produce a stream of ideas to get voters thinking. How are public services going to be paid for? What is Labour’s alternative social care plans to be ready when the government announces theirs? How do they rejuvenate inner cities in cooperation with the best of their regional/City mayors? What does life-long learning really mean in practice and how should it be organised and funded? How can we have a better relationship with the EU which makes the casualties of Brexit (including many who voted for it) feel Labour has constructively moved on. Finally, just ignore the culture wars, and start opposing the Government on aspects of managing the pandemic. Labour’s Shadow Home Secretary this morning attacked the ‘pingdemic’ but couldn’t provide an alternative solution. Pathetic.

It may be that Starmer is just too cautious and not political enough. But if he and his Labour Party don’t stand for something and soon, the Tories will romp to victory at the next election however poorly Johnson’s team governs.

The Tories are standing on their heads. Their raison d’etre and bedrock of support was always via an appeal to the wealthier parts of the UK, predominantly the South. They had a very clear offering to the centre-right of the political spectrum; support for institutions, lower taxes, controlled budget deficits, smaller government, mostly constructive nationalism, a United Kingdom, a tough but largely constructive approach to the EU. All with a sub-text that collectively such an approach allowed for a stronger economy to support the less well off.

No longer.

Admittedly, the pandemic has driven much of the recent political agenda, but the Tories have been busy adjusting their political stance ever since Johnson was voted leader and this will continue after the pandemic recedes.

In a successful swing at Labour’s heartlands, the Tories have stood for the opposite of the usual. Anti-EU, this debate was partly framed by giving power to the government to aggressively intervene in the economy, whether it is initiating huge infrastructure projects or propping up ailing industries such as steel (Margaret Thatcher must be turning in her grave). And to hell with Brexit’s overall impact on the economy… They have also been cavalier with the Union, have a new sub-text of spending money like water, pandemic notwithstanding, and tax rises will almost certainly be focused on the better off. They have to date successfully engaged in culture wars that the ‘old’ Tories used to largely and politely side-step, except for the odd red-faced backbencher.

No wonder Labour, even under Keir Starmer, has not been able to lay a glove on them.

Lucky with his Opposition led by Corbyn in 2019, Johnson won in the South through fear and won spectacularly in the Midlands/North through great tactics as Labour’s traditional seats turned blue.

But will this alliance of voters hold? A few straws in the wind, including the by-election defeat in Chesham and Amersham, may make the Tories a little uneasy:

• Attacks on the Green Belt which is upsetting traditional supporters in the South
• Higher taxes in the face of a more moderate Labour Party which may just allow voters in the South to think it is safe to vote elsewhere
• Culture wars going too far. Snide comments from ministers on the Black Lives Matter bending of the knee will strike a note of widespread irritation, particularly now some national footballers are involved, with one openly calling the Home Secretary racist
• Brexit. Whilst done, if not the impact of its longer-term fall-out, not caring about the Union and continuing with initiatives to gently or not so gently undermine institutions generally may start to resonate with voters, particularly in the South
• Scrutiny on general competence as we emerge from the pandemic. This may attract the attention of all voters. It is interesting that in the recent Batley and Spen by-election, if it wasn’t for George Galloway’s divisive campaign aimed at the Asian community, which split the Labour vote, Labour would have won handsomely in this Northern seat
• Then lastly, cuts in foreign aid. The Tories are being attacked from many sides, including by all their living former Prime Ministers, although probably not by their new target base of voters

As this blog has written before, Tory hegemony seems strong, and it is difficult to see anything but a Tory victory at the next election.

However, Labour is under new, moderate if, to date, ineffective leadership and the LibDems came second to the Tories in well over 70 seats mostly in the South. The new Tory ‘Red Wall’ in the North had better hold as some traditional Tory voters may be getting restless and with good cause.

Sometimes it feels that the famous Churchillian phrase about democracy could be applied equally to free markets; ‘democracy is the worst form of government – except for all the others that have been tried.’ It is an analogy that can cross boundaries to economics!

Western capitalism as we know it is under threat. The disparities of wealth in many countries have grown; injudicious tax cuts in the US for the better off, global asset price inflation due to quantitative easing, elements of corruption and elitism, now the pandemic. The list is long. Much of it has fuelled populism which, of course, is a poor solution to inequality. Just think Trump, Bolsonaro and Modi for a start. They may not intentionally have set out to undermine capitalism/free markets but their sense of entitlement, acceptance of corrupt practices, particularly when supporters are involved, and a disastrous handling of the pandemic have all contributed to greater inequalities and capitalism’s malaise.

So, it is a huge relief and very welcome that the world’s leading economies yesterday signed up to a plan to force multinational companies to pay a global minimum corporate tax rate of at least 15 per cent. It is a recognition that things have to change. Many multinationals, notably technology companies, have reached a size where they face little competition and accountability, moving money around the globe to dodge legitimate taxation. No longer. A fair treatment of companies, large and small, global and local is crucial to the survival of Western capitalism. The ‘little person’ should have an equal voice and this initiative could raise at least an extra $100bn in taxation potentially for public investment. No mean feat.

Future initiatives to strengthen capitalism should involve more active corporate governance to curb senior executive pay. For example, according to the latest Chartered Institute of Personnel and Development (CIPD) report on executive remuneration, the average FTSE 100 Chief Executive gets 119x the remuneration of the average full-time employee. This multiple has risen pretty much consistently over the years and apparently there is no tangible evidence as we emerge from the pandemic that companies have begun to address the fundamental flaws in the executive pay-setting process.

Incredibly, one might not even be averse to considering some form of wealth tax which seems the only solution to dealing with the inequality of wealth caused by excessive asset price inflation since the 2008 crash and the advent of quantitative easing.

The world faces multiple crises as it tries to escape the pandemic. In the West, in particular, there are huge challenges facing economies including infrastructure investment, lifetime education to reskill the workforce and access to comprehensive health and social care. Populism and threats to democracy will only be defeated in the longer term if disparities of wealth are narrowed to pay for much needed improvements in how society operates.

Agreeing a global minimum corporate tax rate, whilst seeming a little dry to grab many headlines, is a huge step forward for capitalism and another visible benefit of President Biden’s victory over Trump. There is still much work to do, however, to convince all voters that Churchill’s comments on democracy apply equally to free markets as we know them.