Prawn cocktail? Now we serve guinea fowl, says Labour’s man wooing City
Shadow business secretary Jonathan Reynolds tells how party is capitalising on disaffection with Tories
For a shadow business secretary seeking to prove Labour is “proudly pro-business”, there could scarcely be a more gratifying accolade than receiving the Freedom of the City of London. So it is no surprise that the parchment document certifying the privilege conferred on Jonathan Reynolds last week is already on the wall of his Westminster office.
Dating back to the 13th century, the practical reasons for obtaining the Freedom of the City may have faded into the past, though Mr Reynolds says he is looking forward to exercising his right to drive sheep over London Bridge.
The bestowal of the award is a telling example of the mutual wooing taking place between the business community and a Labour Party that is odds-on to form the next government.
The flirtation is taking a variety of forms. The Sunday Telegraph can reveal that Labour is accepting “donations in kind” from City firms via secondments worth hundreds of thousands of pounds. Our analysis has found that while major corporations shied away from lending personnel to Labour when Jeremy Corbyn was leader, since 2021 they have funded secondments worth more than £240,000.
According to Mr Reynolds, the placements have allowed the party to bolster its business engagement, but he also thinks they reflect changing attitudes to the party. “I don’t think perhaps if Labour wasn’t a serious proposition for government, we’d have so many offers,” he says.
This year he has registered a secondment from NatWest as well as one from the Lowick Group, a public relations firm. He is in discussions about receiving another placement from a bank in the new year, while the professional services giants EY and PwC and the law firm DLA Piper have also seconded staff.
Mr Reynolds is playing a key role along with Rachel Reeves, the shadow chancellor, in Sir Keir Starmer’s mission to recast Labour as responsible would-be custodians of the national finances. Hailing from a coal mining family in County Durham with a father who was a fireman, Mr Reynolds has a classic Labour background, but also dipped his toe in the corporate world with a stint working for the commercial law firm Addleshaw Goddard.
His job of winning round business has undoubtedly been made easier by the financial and political turmoil that has engulfed the UK since Liz Truss’s mini-Budget, including the economic pain signalled by Jeremy Hunt’s Autumn Statement last Thursday.
Mr Reynolds claims the tax rises and spending cuts announced by the Chancellor reflect not only “the last 12 weeks of chaos” but “12 years of failure” to achieve robust growth, leaving the Conservatives in an “economic straitjacket of their own making”.
In a reprise of the “prawn cocktail offensive” when Labour charmed City figures in the 1990s, Labour is seeking to capitalise on the Tories’ difficulties with regular business events – although Mr Reynolds says guinea fowl is now more likely to feature on the menu.
The party is having little trouble drumming up interest, hosting more than 100 corporate leaders at a reception on Wednesday.
“As the Government has become ever more unstable, ever less popular, and the polls are what they are, obviously that [interest] has increased considerably, and we’re delighted by that,” Mr Reynolds says. “When we say we want to work in partnership with business it is not some sort of electoral ruse or messaging or positioning. It’s what we genuinely believe is necessary for a Labour government to achieve the kinds of things that it wants to achieve.”
At his meetings, Mr Reynolds says he hears a litany of complaints from businesses about the current political situation, ranging from the Government
being “too unstable to provide the platform for long-term investment” – including high turnover of ministers in key departments – to restricted access to the EU Single Market.
He claims “persistent problems” have been ignored, with Labour putting “full replacement” of business rates at the heart of its agenda (though the details remain vague) and promising reform of the “inflexible” apprenticeship levy.
The new stance has meant junking rhetoric from Labour’s recent past.
In 2011, the then Labour leader Ed Miliband provoked controversy when he used his conference speech to split firms into wealth-creating “producers” and exploitative “predators” – labels that Mr Reynolds rejects.
“I wouldn’t use that kind of rhetoric,” he says. “I wouldn’t think you could arbitrarily binarily divide businesses
‘When we say we want to work in partnership with business it is not some sort of electoral ruse’
into one thing or the other.” That being said, Labour is not going to stop attacking companies such as P&O Ferries, which caused uproar when it sacked staff en masse and replaced them with agency workers. “You will not find many business leaders who will endorse P&O Ferries,” he says. “They think that brings business into disrepute.”
Labour’s effort appears to be making headway. A senior figure at a FTSE 100 company told The Telegraph Labour’s relationship with business was “night and day” compared with the Corbyn years, with firms “falling over themselves” to talk to the party. “It’s extraordinary the interest in Labour and the dialogue that’s going on,” they said.
They added: “People like Rishi [Sunak], they think he’s serious, and they hope he succeeds. But they look at the polls and they see a real possibility of a Labour government and this change in the political cycle.”
The party has already succeeded in picking up several former Tory donors.
Kasim Kutay, the chief executive officer of life sciences investor Novo Holdings, told The Telegraph he had decided to support Labour because he was “disaffected by the direction of the country” and “for the first time in a long time we have a truly serious alternative”. He is looking for Labour to address the “structural and long-term issues” affecting the economy through “a long-term industrial policy strategy”.
The party is promising to be a more hands-on strategic partner for industry, with pledges to use public funding to “crowd in” private investment in infrastructure projects going down well in some quarters.
But questions remain over Labour’s wider fiscal policy, with the party reluctant to spell out much detail on tax beyond populist pledges to scrap non-dom status and private schools’ exemption from VAT.
Labour’s proximity to business poses some risks, particularly given the party’s reliance on union funding and the leadership’s recent reticence to back striking workers.
Mr Reynolds seeks to square the circle by insisting Labour supports the right to strike while aiming to get to a “point where people don’t need to take industrial action because we’ve been able to resolve those disputes”.
The business secondments could also open the party up to claims on the Left of inappropriate influence – something Mr Reynolds denies.
He likewise defends the practice of inviting donors who are members of Labour’s Rose Network to meet with frontbench politicians. “There is no access that comes with that that I wouldn’t want in terms of a legitimate conversation between a shadow business secretary and a business person,” he insists.
With Sir Keir giving a speech to the CBI next week, the guinea fowl offensive looks set to continue. Mr Reynolds may struggle to find time to drive sheep across London Bridge.