Britain ‘open to business’
Labour’s Starmer sends clear message at Davos meeting of WEF
Labour edged closer to becoming the government-in-waiting that the polls imply after the party leadership’s successful first day out at Davos.
British business figures and bankers said Labour leader Keir Starmer and his shadow chancellor, Rachel Reeves had impressed in their attempt to demonstrate that the opposition is “open to business.”
Starmer and Reeves met executives and investors to explain their plans and drum up support. One top banker who saw the party leader at a private breakfast attended by several executives Thursday morning said the general impression was that he had “surprised to the upside.” Starmer was later introduced on a panel as the UK’s “likely next prime minister.”
Another business leader who asked not to be named pointed out that the free invitation to the World Economic Forum’s annual meeting showed the party is being taken seriously by the opinion shapers who run Davos. They drew a comparison with invites for senior Tories before winning the 2010 election.
The government sent only a skeleton delegation to Davos this year, with Business Secretary Grant Shapps and International Trade Secretary Kemi Badenoch standing in for Prime Minister Rishi Sunak. Both parties are vying for the business vote, which proved key to Labour’s 1997 election victory under Tony Blair.
‘CONFIDENCE DISCOUNT’
The business community is frustrated with the Conservative government after a year of political mayhem that saw three prime ministers and four chancellors. There is no growth plan and the UK is falling behind the US and Europe, they say.
The catastrophic mini-budget has left the UK with a “confidence discount” that is damaging prospects, according to Ruth Leas, chief executive of Investec Bank.
“The UK is a little bit on the back foot at the moment in taking care of its own internal issues,” Leas said. “Business leaders don’t want to be left behind. While we repair at home, others are focused on moving forward. We have plans from the US and EU. The UK can’t take too long to come up with its plans.”
Labour is 20 points clear in the polls but victory in the next election, to be held by January 2025, is far from guaranteed — in part because it has yet to secure the corporate vote. Labour is repairing relations with British business after they were badly damaged by former leader Jeremy Corbyn, a product of the party’s left wing.
The banker who saw Starmer at breakfast warned that a Labour government remains a potential risk to the economy, because of its recent track record. Shapps played on the theme in an interview with Bloomberg TV.
“No disrespect to Sir Keir Starmer, but it’s not very long ago that he sat in Jeremy Corbyn’s cabinet — the extreme left-wing leader of the Labour Party,” the business secretary said. Noting that he’s “very happy for all of us to be pro-business,” Shapps added that “I would just ask who’s heart is really in it.”
Labour’s image can be fixed by “breeding familiarity” with business through further engagement, the banker added. Another business figure welcomed the fact that the party was listening, which gives businesses a chance to ensure policies are shaped in their best interest.
‘SERIOUS PLAN’
Starmer and Reeves were not slow to embrace the Davos spirit, attending Matthew Freud’s party on Wednesday alongside Badenoch, Blair, Princess Beatrice, Princess Eugenie and numerous senior executives. Both Starmer and shadow chancellor Reeves attended the JPMorgan party Thursday night.
They also struck a more diplomatic note than Shapps, who attacked the US’s massive clean energy subsidy programme as “dangerous” protectionism, an aggressive position when Brussels is trying to ease tensions. Starmer said: “We need that in the UK as well.”
Responding to concerns about the lack of a growth plan, Shapps did outline a vision for an innovation-led programme he labelled “Silicon Valley with a British edge” at a lunch organised by the Confederation of British Industry. But those attending said it was short on policy detail.
Starmer provided more specifics. He pledged to end new investments in the North Sea, to build a closer economic relationship with the European Union and work with the US on subsidies.
He would champion an “active state” that also “partners with the private sector to take these opportunities.” And he proposed an “inverse” Organization of the Petroleum Exporting Countries, a Clean Power Alliance to counter the influence of the oil cartel, with countries sharing information and investment as they forge a path to so-called net zero carbon emissions.
Davos is Labour’s most high-profile attempt at business engagement, but it has been building relations for over a year. Last month, Reeves told a conference attended by 350 executives that “Labour is back in business,” while corporate leaders have responded, saying they’re prepared to work with the opposition party.
“Labour hope to form the next government so it’s really important to talk to business and investors about our plans for the future,” Reeves said on her panel. She stressed that economic policy has to be “built on the rock of fiscal responsibility” but that the country needs a “serious plan for growth” if the UK is “to turn round the poor economic performance for over a decade.”