The party of business?

What does it mean to be “the party of business”? Either not very much at all, or too many things at once. The Conservatives proudly describe themselves as The Party Of Business on their own website, and have always had a straightforwardly unambiguous – and overly simplistic, perhaps, but not deluded – assumption that they and business are broadly on the same side and that this is a good thing.

Labour’s origins, its close links with the trade unions and its explicit goal of rebalancing power between workers and employers all mean that its relationship with business has always been more fraught. Seeking a constructive relationship with business is one thing; becoming widely recognised as “the party of business” would have as many downsides as upsides in holding together Labour’s broad coalition of support (although headlines suggesting that business is losing faith with the Tories are never unwelcome to Labour, when they do come along).

Business, of course, is a category so broad as to be almost useless. The interests of FTSE-100 companies frequently fail to overlap with each other, let alone with those of SMEs, and all politicians seek to elide them where convenient, or to point out that their concern with the behaviour of some businesses does not make them “anti-business” across the board (“I went to my local cafe this morning and had a coffee”, Jeremy Corbyn told the British Chambers of Commerce in March 2016. “I support businesses like them. I hope they do well”).

But making a broad range of businesses and business leaders positive, or at least not negative, about the possibility of a future Labour government is a useful goal for its new leadership. This has not happened for a while. For Ed Miliband and Jeremy Corbyn, concerns from many businesses about a broad range of Labour policies on tax and ownership failed to outweigh worries about the impact on economic stability of Conservative support for an EU referendum in 2015, and Conservative willingness to countenance a possible no-deal Brexit in 2017 and 2019. Corbyn was more willing than Miliband to see this business scepticism as a badge of honour and as part of the explanation for defeat (if it’s both, of course, that suggests strategic confusion).

For Keir Starmer and his team, exploiting the risks of a no-deal Brexit is off the agenda for now: the issue is “settled”, says Starmer, although it might become rather more unsettled later. But coronavirus, and its huge impact on the economy, provides a new opportunity for business engagement. This is both because there are sudden new policy challenges on which it is worth Labour engaging with businesses to understand and plan to overcome, and because coronavirus has exposed big weaknesses in the Government’s competence which are helping to encourage people to look elsewhere.

In the mid-1990s, many businesses started to lose trust in John Major’s Conservative Party, and to take New Labour seriously, partly because of reassuring messages from Tony Blair but also because of a broader loss of confidence in Tory competence after Black Wednesday. Blair’s desire to win them over did not stop him running campaigns against “fat cats” or promising a windfall tax on the profits of the privatised utilities – Labour should be perfectly capable of delivering tough messages to businesses it is seeking to engage constructively with. The willingness of businesses to engage with Labour in opposition during that period reflected a solid business judgement that Labour was likely to be in government sooner rather than later and that it was better to build constructive relationships with its key figures than to attack them. Conservative incompetence in that period was at least as important in changing businesses’ perceptions as Labour’s perceived competence, although both were necessary conditions for the shift.

Already, Labour under Starmer, and especially shadow Chancellor Anneliese Dodds and shadow Business Secretary Ed Miliband, have started reaching out to business stakeholders more proactively than was apparent under the previous regime. That makes it a good time, in turn, for businesses to think about how best to engage with them: where can Labour help to put pressure on the Government to improve its support for businesses during and after the pandemic? What are the areas where Labour can work with businesses to set out what its vision of economic recovery after coronavirus should look like, in line with its own values and priorities? How can the relationships and lines of communication between business and the Labour Party be more effective and mutually beneficial than they used to be?

For Starmer, Dodds and Miliband, the aim is not to be universally regarded as “the party of business”, but simply to be a party that a broad range of businesses, large and small, feel they can do business with.

 

Tom Hamilton, Associate Director