It has been a generally good week for Labour leader Jeremy Corbyn, with two important policy proposals on business and defence.
They come a week after Corbyn’s much-reported Shadow Cabinet reshuffle.
The first was a proposal big businesses should be prevented from dishing out huge dividends to shareholders unless those businesses are paying the living wage.
In theory, the idea is a good one, as it typically tends to be the most wealthy shareholders who receive these dividends, thus causing significant inequalities between those who actually proceed the profit on the ground, and those simply picking up the rewards.
Furthermore, in a bid to boost profits, companies could in fact push down employee salaries to the bare minimum levels.
The average UK living wage is £8.25, according to the Living Wage Foundation, compared with the £6.70 minimum wage.
And yet, in practice, the idea falls to pieces. As Robert Peston points out quite clearly: “Jeremy Corbyn’s proposal that companies that don’t pay the living wage should be banned from paying dividends would create perverse incentives for companies.
It would reinforce the propensity of many businesses to deliberately operate at a loss, such that the question of paying dividends would not arise.”
One does not have to look far for evidence companies could take such measures; just look at companies who operate at a loss in the UK so as not to pay tax here.
Furthermore, the government interference in the market in such a way will be received with much criticism from proponents of liberalism. However, at times this has to be sacrificed to improve the lives of everyone.
Secondly, Corbyn revealed today the Labour party could pursue a compromise on Trident nuclear missiles, when the vote on its renewal is put to MPs.
Corbyn suggested on the Andrew Marr Show today, Labour could support the renewal of Trident, but only if their nuclear warheads were scrapped.
It is a clever move by the Labour leader, whose position on Trident has come under fire from many on his own benches.
This position could placate the unions, who believe scrapping the nuclear submarines would result in huge job losses; it also maintains a submarine presence in the UK, keeping the number at 10 (four or which are currently armed with nuclear warheads).
The argument remains that the UK’s nuclear deterrent does the job of deterring possible nuclear war, but the jury is out on that one.
Until the pundits can be assured Corbyn has the support of his own party behind him, anything the Labour leader says will likely be taken with a pinch of salt.
However, the recent reshuffle could build that support, and allow him to pursue worthwhile policy. His living wage proposal is appealing if lacking business know-how, but he failed to mention imposing a living wage on the public sector.
The Trident proposal may satisfy some in his party, except those who still believe in weapons Corbyn believes are a thing of a Cold War era.