Starmer’s 1997-style prawn cocktail offensive
There’s a ‘sea change’ in the City as Labour woos business leaders ... and it’s working, writes Tom Rees
‘Labour looks like a serious party of goverment. They’re on it. It’s so impressive. When we talk to the front bench, doors open’
‘It certainly feels like that ’97 moment,” says a senior executive at a major housebuilder as business chiefs file in for croissants, lunch and later wine at Labour’s business conference. “The Tories are a mess at the moment. The removal of the housing targets is just a disaster. Hopefully we can have a more positive environment from Labour.”
Temperatures in London are still sub-zero, but inside the East Wintergarden venue at Canary Wharf, where MPS and party officials hobnobbed with executives, relations between business and Labour have almost completely thawed since the frosty Corbyn era.
“Labour is back in business and I think you can see that in the room today,” Sir Keir Starmer declared. On “table one”, shadow chancellor Rachel
Reeves was flanked by Aviva chief executive Amanda Blanc and shadow business secretary Jonathan Reynolds, while bosses from Tesco, M&S, KPMG, Microsoft and EY were among those also in attendance. HSBC, Drax, SSE, Mastercard and Just Eat were some of the more than a dozen sponsors.
The event was attended by 350 such City leaders yesterday, with the clamour for tickets so great that 100 bosses were left on the waiting list.
The scene was reminiscent of the first “prawn cocktail offensive” launched by the Labour Party to woo businesses before its landslide victory in 1997.
“I think I speak on behalf of everyone here [when I say] that it is clear the Labour Party, driven forward by Keir and Rachel, is calling out to businesses like yours and ours and wants to hear from all of us,” said City stalwart Blanc in one of the speeches. “The turnout today ... tells you that business is reciprocating.”
Warm words from chief executives from Aviva, Tesco and HSBC would have been unimaginable three years ago. The interest from corporate leaders in Labour may have as much to do with pragmatism as its shift in policy, given its lead in the polls of 20-plus points.
There are still remnants of the old tensions with business, as Sir Keir and Reeves were forced to bat away some uncomfortable questions. Businesses want looser immigration laws to boost the workforce and better relations with the EU, but Sir Keir’s red lines suggest major changes are unlikely.
The Labour leader also said yesterday that the Government’s planned strikes clampdown is the “wrong legislation”, though he promised he would not slap a windfall tax on profits in the City following the raid on energy. Reeves said boosted bank profits from higher interest rates are “very different” from the energy profits surge targeted in the wake of the Russian invasion of Ukraine.
It may also be difficult for a Labour government to radically transform the tax backdrop facing companies as they brace for a huge hike in corporation tax and the end of the super deduction from next April.
Labour has been praised by bosses for promising to scrap business rates but Reeves says lower taxes on some businesses will mean more for corporate giants. She says: “If you’re going to have lower taxes on smaller businesses and high street businesses, some of the big global multinationals – who are not paying their fair share of tax in Britain – will be paying more into the system. This is not a free lunch.”
None the less, attendees in Canary Wharf believe Sir Keir and Reeves are the real deal as disenchantment with the Conservatives grows. One executive at a utilities firm said: “Labour has really upped its game in terms of engagement with business.
“It’s had a sea change in the language and the issues it talks about. The biggest skill of a party is to listen and they’re listening.”
The boss of one industrial company says the Tory government is “scared of their own shadow” and does little in terms of business engagement.
“Labour looks like a serious party of government. They’re on it, it’s so impressive. When we talk to the front bench their door is open.”
Labour’s Treasury team launched detailed plans to boost Britain’s start-up sector this week. Reeves says her objective is to grow the economy after a stagnant decade, adding that her plans can make Britain the “best place to start and grow a business”.
“That is what the UK economy has been missing these last 12 years,” she says. “The problem is without economic growth, it is very difficult to improve living standards, and have the money that’s needed for public services.”
The party has not become a smash hit with business leaders overnight. The renewal of relations on show in east London’s financial district are the result of a painstaking charm offensive by Labour’s top business team.
Sir Keir, Reeves and Reynolds have been on a “prawn cocktail offensive 2.0”, a blitz of breakfasts, dinners and drinks receptions meeting bosses from FTSE 100 and global giants.
The party has been in regular contact with Sainsbury’s, Amazon, EY and Natwest among others.
If this is a 1997 moment for Labour, the packed East Wintergarden yesterday suggests that no boss in the City wants to be left behind.