Labour is wooing businesses and bankers as it readies itself for office in a repeat of the “prawn cocktail offensive” by Sir Tony Blair and Gordon Brown to get finance on side before their 1997 victory.
Business leaders say Sir Keir Starmer and his shadow chancellor Rachel Reeves have stepped up their efforts to win over the City, in private talks with bankers and chief executives. One City lobbyist said: “Labour leaders have spent many more hours with business than they have in schools and hospitals. I’ve been invited to breakfast with Jonathan Reynolds (shadow business secretary) about a dozen times in the last few months.”
While Chancellor Jeremy Hunt was giving his Mansion House speech, Labour was hosting the venture capital sector at a private dinner. Ed Miliband emailed City bosses seeking an audience to discuss energy policy. Many business leaders say they have mostly been impressed, and are reassured that a Labour government will not attempt radical regulation.
Labour insiders say they have seen a flood of unsolicited donations from the City. According to the Electoral Commission website, donations this year include:
- £31,000 from PwC
- £25,000 from Victor Blank, former chairman of Lloyds TSB
- £29,700 from Ernst & Young
- £6,000 from Linchpin Private Equity
- £200,000 from Peak Scientific Holdings, which manufactures gas generators
Party donations normally increase substantially in the six months before an election. Nicholas Smith, chairman of Labour in the City, said: “Labour’s engagement with the financial sector is more comprehensive and systematic than at any point in years. It has made rapid progress establishing trust and regular channels of communication.”
A private email from Severn Trent boss Liz Garfield made the cosy relationship plain. Ms Garfield, after talks with the party hierarchy, told her fellow utility bosses that Labour did not want to include nationalisation in its next manifesto, but warned that something must be done about utilities. She suggested they rebrand themselves as “social purpose” companies, that make a profit but “rebuild public confidence” in privatised firms.
Ms Garfield even sent out a draft of a press release that would show utility companies and Labour working together to “ensure world-class public services”.
The creative industries are seen as a battleground for both parties. Sir Keir spoke to 100 creative and media bosses at a private breakfast, organised by the Thirty Club, a networking club for advertising executives, at the Berkeley Hotel in March. Chief executives in other sectors report the same approach. One said: “It’s not explicit, but the plan is clearly, ‘don’t force us into loads of new rules by your behaviour. Sort it out yourselves, make some money, then we’ll take the tax to pay health and education’.”
Simon French, chief economist of broker Panmure Gordon, said: “Rachel Reeves has toured the City and Wall Street and left a favourable impression. She is not John McDonnell, nor is she Kwasi Kwarteng. Other shadow ministers have also engaged on their own agendas. While they have not necessarily inspired, they have not left the City terrified of what a change of government may bring.”
Labour’s quest to return to power has been thrown into sharp relief by last week’s by-elections, which has pitted Sir Keir against Mayor Sadiq Khan over the Ulez expansion after the party failed to win the Uxbridge and South Ruislip seat. Meanwhile, Labour romped to victory in Selby and Ainsty, North Yorkshire, in one of its biggest-ever swings from the Tories.
In many cases, business people are assuming Labour will win a general election — perhaps easily — and are preparing for that, whatever their natural political inclinations. Pollsters say that the Tories have for many years enjoyed a double-digit lead over Labour when it comes to managing the economy. That looks like it’s gone, after the Liz Truss premiership.
Amanda Blanc, chief executive of Aviva, addressed Labour’s business conference. She said: “The market reaction to the mini-Budget shows that political decisions cannot be divorced from reality or from business. We can’t just invent growth. We can’t just improve productivity by wishing it so... It is clear the Labour Party is calling out to businesses like yours, and ours, and wants to hear from all of us. The turnout today tells you that business is reciprocating.”
One political adviser to a FTSE 100 business said: “Under Corbyn, it seemed too risky to even engage with Labour. Conservatives had a high point under Cameron and Osborne in terms of business. Theresa May was a bit rubbish at it and Boris said ‘f*** business’. Rishi Sunak and his team are much savvier in the meetings but for too long the others in the room were juniors.” Mr Sunak has appointed former Morgan Stanley banker Franck Petitgas to boost relations with the City.
As part of the drive to appear moderate, Ms Reeves has insisted she would have an “iron grip on finances” to reduce fears of unfunded spending. Not everyone is entirely won over. One banker said: “We respect that they are banging on our doors, but where is the beef in terms of policy? The whole of Labour strategy is the Ming vase on a slippery floor thing. Barring a miracle they are going to win. My worry is that they are lacking in ideas.”
According to figures from the Electoral Commission, Labour raised £5.8 million in political donations in the first three months of this year, including £500,000 from Gary Lubner, the former boss of Autoglass. He told the Financial Times he wanted to give Sir Keir financial help to put the party in power “for a long time”. However, Labour still has some way to catch up with the Tories. They received more than £12 million in donations in the same period, helped by a £5 million gift from billionaire Mohamed Mansour.
