We should praise Ed Miliband's ideas on business, not bury them

Outlook Trust the banks to go and spoil things. The very day after Yvette Cooper tries to make amends with the business community by burying Ed Miliband’s infamous distinction between “predators and producers”, a parade of large banks is hit with fresh regulatory fines for rigging markets, thus reminding everyone that some corporate behaviour really can only be described as… well, predatory.

The former Labour leader undoubtedly got many things wrong. But that 2011 Liverpool conference speech deserves to be praised, not buried. Read the original text and Mr Miliband’s distinction is much more careful than the way it is remembered: “Let me tell you what the 21st-century choice is: are you on the side of the wealth creators or the asset strippers? The producers or the predators? Producers train, invest, invent, sell. Things Britain does brilliantly. Predators are just interested in the fast buck, taking what they can out of the business.”

Then came some important caveats: “This isn’t about one industry that’s good and another that isn’t. Or one firm always destined to be a predator and another to be a producer. It’s about different ways of doing business, ways that the rules of our economy can favour or discourage.” I can’t see anything to disagree with in that.

Aggressive tax avoidance; inappropriate products pushed on clients by commission-driven sales staff; a mountain of zero-hour contracts; deliberately opaque pricing – these practices can all be justified on the basis of shareholder returns. But we are entitled to expect more from our businesses than that they do whatever it takes to squeeze out more drops of profit for shareholders and executives.

The economist John Kay, who was commissioned by the Coalition to write a review of equity markets, sums it up well: “The purpose of a corporation is to produce goods and services to meet economic and social needs, to create satisfying and rewarding employment, to earn returns for its shareholders and other investors, and to make a positive contribution to the social and physical environment.” Sensible business leaders already grasp this.

Labour’s central error lay not in Mr Miliband’s 2011 rhetoric but his failure to flesh out the themes of that speech over the subsequent four years, and his failure to offer a coherent package of reform that would create an environment in which productive, rather than predatory, business behaviour would thrive. “We sounded anti-business, anti-growth and ultimately anti-worker,” is Ms Cooper’s brutal verdict.

It is difficult to know how salient the party’s stance on business was in the minds of those who decided not to vote Labour. But there’s little doubt that Mr Miliband lost an important presentational battle. And there are lessons to be learned from that.

Yet the predators have not gone away, as the bank fines underline. The next Labour leader would be unwise to assume the road back to power and popularity must involve an uncritical dash through the gates of the big business lobby.