UK opposition Labour courts business before election
With a UK general election looming, the country’s main opposition Labour party is seeking to persuade business and financial sector leaders that it can be trusted to steward the economy better than the ruling Conservatives.
Prime Minister Rishi Sunak’s party trails badly behind Labour in opinion polls ahead of a national vote expected this year, as it rapidly loses a reputation for economic competence.
Labour on Wednesday launched ‘ambitious proposals to drive competitiveness, streamline regulations and unlock billions of pounds of growth in financial services.’
On Thursday, party leader Keir Starmer addresses chief executives and international investors at an event in London, telling them Labour will ‘fix an unprecedented stagnation in British productivity growth.’
“Labour is the party of business,” he will add, according to excerpts of a speech released to media. Expected at the event is Richard Walker, a former donor to the Conservative party who this week switched his support to Labour.
The chairman of British supermarket Iceland wrote in the left-leaning Guardian newspaper that Labour was ‘the right choice for everyone in business who wants to see this country grow and prosper.’
UK business remains hampered by high inflation and
stagnant growth. Companies are also counting the cost of Brexit. Following Britain’s departure from the European Union, the country on Wednesday finally rolled out post-Brexit border checks on food, plant and animal products imported from the neighbouring bloc, fanning fears of fresh price hikes. On financial services, Labour said it planned on ‘building a more collaborative relationship with the EU.’
Labour’s plans unveiled Wednesday focus on financial
services, which have also taken a knock following Brexit, with companies picking the likes of Wall Street over London for new listings. Online betting giant Flutter this week took the first step to switch its main listing from the British capital to New York.
“The financial services industry is one of Britain’s greatest assets, supporting millions of jobs and billions of pounds of investment to our shores,” Labour’s spokesperson
on finance, Rachel Reeves, said Wednesday.
Confident of replacing finance minister Jeremy Hunt, she added: “The next Labour government will unashamedly champion the UK’s financial services sector. We will work in partnership with business to kick down the barriers to growth, spur on investment and showcase Britain’s standing as a world leader in the industry.” Barclays bank chair Nigel Higgins said Labour’s plan recognised that ‘a vibrant and dynamic financial services sector is crucial for long-term economic growth’ as well ‘the importance of international competitiveness.’
Not to be outdone, Sunak on Wednesday refreshed his ‘business council’ comprising chief executives running top UK companies who will offer advice ahead of the election.
“Without the jobs, growth, and innovation created by UK firms, the country simply wouldn’t function,” Sunak said in a statement announcing the latest council members.
New member Debbie Crosbie, CEO of major home-loans provider Nationwide, said “business and government have a common interest in strong economic growth. It releases investment for communities, funds improvements in public services, and inspires innovation.”
The government has dangled the prospect of tax cuts before the nation goes to the polls, a move the International Monetary Fund on Tuesday warned carried major risks. IMF chief economist Pierre-Olivier Gourinchas said the Fund ‘would advise against... tax cuts as envisioned.’
Instead “there is a need to put in place medium-term fiscal plans that will accommodate a very significant increase in spending pressures”, he added.