Four years ago Labour was in the wilderness with business. Despite a “tea offensive” to woo City boardrooms before the 2019 general election, the party under Jeremy Corbyn was also bracing for its policies to spark a potential run on the pound if elected.
In the run-up to the next general election, the only stampede in the City is among executives scrambling to get close to Keir Starmer’s Labour, aiming to understand – and influence – its policies before an expected victory over Rishi Sunak’s Conservatives.
Last month, tickets for “business day” at this September’s Labour party conference sold out within 24 hours of going on sale, reflecting Labour’s strong position in opinion polls and Starmer’s bear hug of corporate executives.
“Many business leaders have sold their shares in the Conservative party and are buying into the idea that Labour will win in the autumn,” says Jim Murphy, a former Scotland secretary who now runs Arden Strategies, a political consultancy that advises business on navigating the world of politics.
“Over the past four years Labour has behaved like a scratchy startup. In a few months’ time they need to behave like a government,” Murphy adds.
To build bridges with the City, the party has developed a business engagement team almost from scratch at the heart of Starmer’s operation, having earmarked a 21st-century version of its 1990s “prawn cocktail offensive” as one of the best ways to argue that Labour can be trusted with running the economy.
At its core is Vidhya Alakeson, a former charity boss who now works as the Labour leader’s director of external affairs, overseeing a team of 10 staff and secondees from the private sector; including from corporate affairs agencies and the big four accountancy firm EY.
“Vidhya is clearly working all hours of the day and night,” says the external affairs director of one FTSE 100 company being courted by the party. “She is absolutely the person you want on your team.”
Before Alakeson joined, Labour had almost no coordinated business engagement function to speak of. However, wooing industry is now a central plank of the party’s election efforts under Starmer, who along with his shadow chancellor, Rachel Reeves, shadow business secretary, Jonathan Reynolds, and shadow health secretary, Wes Streeting, are referred to by one corporate lobbyist as “the big four”. “They’re everywhere,” the lobbyist adds.
Before the general election, Labour staffers have pulled together a master spreadsheet of business contacts; listing views on policy and willingness to make public endorsements. A grid of potential locations for speeches and photo opportunities has been compiled, agreeing in principle the places Labour frontbenchers would visit once the election is called.
Reeves last year hired Oliver Newton, a former civil servant who led business engagement for the government in Northern Ireland, as an adviser, while her chief of staff, Katie Martin, also builds links with the City. Starmer’s head of private office, Jill Cuthbertson, who manages his diary, is also a key figure for companies looking to secure a slot in his schedule.
Over the coming months Labour has plans for a tech summit as well as forums on housing, infrastructure and planning, building on previous events including a sold-out conference at the Oval cricket ground in London sponsored by SSE, HSBC, Mastercard and Bloomberg, where Reeves pledged not to increase corporation tax above the current rate of 25%.
With opinion polls showing the party on track for victory in a general election expected later this year, corporate executives have sought meetings with shadow ministers to gauge how a Starmer government might manage the economy.
Reynolds has been approached for meetings by firms considering listing on the London Stock Exchange, including the Chinese online fashion retailer Shein – which could rank as one of the exchange’s biggest ever corporate listings with a valuation of up to $90bn (£72bn).
However, courting the City is not always a comfortable business for Labour, while some executives remain uneasy with elements of the party’s agenda.
This month, Labour announced a “partnership” with the telecoms firm Virgin Media O2 to provide smartphone glucose monitors for children with type 1 diabetes.
Starmer said the deal, which also includes the Supporting Children with Diabetes Charity, showed Labour would work “hand in glove” with business to improve health services. But bringing in private enterprise to fix the health service often provokes accusations of betrayal on the left of politics, with Virgin Media O2 owned by the Spanish operator Telefónica and Liberty Global, the telecoms firm founded by billionaire Trump donor John Malone.
On the other side, business groups including the CBI and British Chambers of Commerce are uncomfortable with Labour’s plans for the biggest overhaul of workers’ rights in a generation, and have urged caution. Peter Mandelson, the Labour peer and Blair-era veteran, has also urged the party not to “rush” through the changes.
In recent weeks Labour has held meetings to soothe business concerns, and given signals it is willing to amend its plans. In February, the party signalled to business that its plans for government would “have your fingerprints on them”. Still, insiders argue, Labour’s values are not for sale. “They can lobby all they want. We can be friendly but disagree,” says one adviser.
However, business will be heavily called on in Labour’s plans for the economy, with Reeves hoping to “crowd in” private investment to help bolster growth at a time when the government finances are constrained by self-imposed debt rules.
Central to this will be a £7.3bn national wealth fund, which is being designed with help from a finance industry taskforce that includes the former Bank of England governor Mark Carney, the chief executive of Barclays, CS Venkatakrishnan, and Aviva, Amanda Blanc.
Not everyone on the left is impressed. “It’s the return of the public-private partnership,” wrote the socialist Morning Star newspaper. “The big danger is that, like Labour’s last public-private partnership, the private corporations will get all the growth, while the public sector gets ripped off.”
Others are more optimistic that a balance can be struck. “There’s elements of the hard left who’ll always be angry,” says Murphy. “But this is not a values-free engagement. And too many C-suite people [executive-level managers] think of Starmer’s Labour as though it was a Blair tribute act or a Corbyn burial society, when it’s neither of those things.
“It’s not so much a charm offensive of business; it’s gone beyond that. Ultimately a charm offensive is what you do with business when you don’t expect to win.”
