UK Labour party's new love affair with British business

UK Labour party's new love affair with British business

Labour's deputy leader Angela Rayner (L), leader Keir Starmer (C) and shadow finance minister Rachel Reeves
Labour's deputy leader Angela Rayner (L), leader Keir Starmer (C) and shadow finance minister Rachel Reeves. Photo: Paul ELLIS / AFP
Source: AFP

After years of disenchantment, British business leaders flocked to this week's Labour conference, signalling a reset in relations between the centre-left party and a corporate community scalded by the economic policies of the ruling Conservatives.

Several hundred business bigwigs met and talked to opposition leader Keir Starmer on Monday at a business forum that was sold out at the annual gathering in Liverpool, northwest England.

"If we do come into government, you will be coming into government with us," Starmer said in front of representatives from Microsoft, Ikea and energy supplier Octopus, among others.

The 61-year-old, whose party is well ahead of the Tories in opinion polls ahead of a general election expected next year, talked up the idea of a "partnership" between the business world and Labour.

Starmer has brought his party back to the centre since succeeding left-winger Jeremy Corbyn as leader in 2020 following a landslide defeat to the Tories at the last election in December 2019.

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Since then, pandemic lockdowns, Brexit and the Ukraine conflict sent shockwaves through the British economy, with stagnating growth and high inflation triggering a cost-of-living crisis for Britons.

The Conservatives are seen as having failed to manage the economy well, with unrealistic spending plans unnerving the markets and poisoning relations with the business community, which appears ready to reengage with Labour.

"I think they understand the value of economic activity and the need to do more in Britain," Martin Land, director of renewable energy project Mersey Tidal Power told AFP.

Land, and others, exchanged views with several Labour lawmakers in Liverpool.

He said he was won over by the party's commitment to "skills" and its desire to strengthen trade relations with the European Union, which have been complicated since Brexit.

A survey carried out by communications agency Lodestone in September found that 70 percent of business leaders expect Labour to win the next general election and 64 percent would see their arrival in Downing Street as a good thing.

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"The relationship between Labour and business historically has been volatile. It's been often one of suspicion," which peaked under Corbyn's leadership, said Lodestone director Tom King.

"So there was a big mountain to climb for Keir Starmer when he became Labour's leader," he added.

'Sensible alternative'

King noted that Starmer and Rachel Reeves, who would become finance minister in a future Labour government, have "worked extremely hard at turning round the narrative about Labour", in particular by putting economic growth at the heart of its strategy.

Although business leaders are still waiting to hear more about the concrete measures Labour intends to introduce, they believe the party will intervene in the economy in a way that "will improve the business landscape as opposed to harming it", particularly in terms of the environment, added King.

Prime Minister Rishi Sunak's announcement last month that he was putting the brakes on a number of measures intended to achieve carbon neutrality by 2050, including delaying the ban on the sale of petrol and diesel cars, was coolly received by industry, particularly motor manufacturers.

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Labour is promising to invest £28 billion ($34 billion) in green energy and wants to relax constraints on trade between the UK and the European Union, another policy giving hope to many businesses.

After the "instability" created by the Conservative party -- in particular Liz Truss's spooking of the financial markets last year -- Starmer and Reeves appear to be "a very sensible and competent alternative", said King.

Several business leaders have openly criticised the Conservatives. They include the boss of frozen food chain Iceland and billionaire John Caudwell, one of the Tories' biggest donors, who has withdrawn his support.

"For any business leader, having that stability and to be able to understand where the vision is, I think is really important. And I think that could come back from the Labour party," Anthony Impey, head of Be the Business, which advises businesses on improving their performance, told AFP.

In an article published in The Independent newspaper a few months ago, the former president of the CBI employers' association, Paul Dreschler, said that Starmer was "winning" the economic battle against Sunak.

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It remains to be seen whether courting business risks alienating some of Labour's historic partners.

Trade union activists have handed out anti-Amazon leaflets at the conference, which is partly sponsored by the US tech giant. Amazon opposes union recognition.

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Source: AFP

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