When Boris Johnson hesitated through his “Peppa Pig” speech to business leaders at the CBI conference on Monday morning, some of the British Prime Minister’s own colleagues were left to look “through their fingers”, in one word.
But Labor officials could not believe their luck. “We were amazed,” said one adviser, arguing that Johnson’s performance highlighted the difference in temperament with Sir Keir Starmer, the leader of Britain’s largest opposition party.
Starmer’s own CBI speech a few hours later was a very different speech: serious, almost heavy and without jokes. He stressed Labor’s plans to scrap business interest rates and reintroduce a formal “industrial strategy” while maintaining strict fiscal responsibility.
The Labor leader won praise from Lord Karan Bilimoria, president of the CBI, who welcomed Starmer’s attempt to “seize the initiative”.
He told the Financial Times: “Having a Labor leader standing on a CBI platform defending the role and success of companies shows how far the party has come. The leader of the opposition’s promises of sound public finances, the green economy and that making Brexit work for business will be heard by companies up and down the country. “
Starmer seeks to emulate the success of former leader Tony Blair, who sought to reassure business leaders that the left-wing party did not pose a threat to corporate Britain in the years before he returned to Labor to power in the 1997 election after 18 years in opposition. .
Labor is generally seen as strong on the NHS, one of the most important election issues. But just as before the Blair era, it has tended to lag behind the ruling Conservative party in terms of economic competence, not least since the global financial crash of 2008, two years before it was ousted from power.
The credibility gap widened even further under Starmer’s hardline left-wing predecessor Jeremy Corbyn between 2015 and 2019. John McDonnell, Corbyn’s shadow chancellor, had once threatened to “overthrow capitalism.”
In contrast, Rachel Reeves, whom Starmer appointed shadow chancellor in May, has played up her sober credentials as a former HBOS banker and Bank of England official.
Supporters of Corbyn have been appalled by the new management’s decision to drop plans for a £ 80 billion annual tax and spending program and the nationalization of utilities.
After Starmer declared “when the company profits, we all do” during his speech to the CBI this week, James Schneider, Corbyn’s former spokesman, retaliated, calling it “financially illiterate, greed-is-good bullshit”.
Many business people find the Labor front bench easy to deal with, though that admiration is dampened by the perception that the party is not exactly on the edge of power. The next election is due to take place in 2024, and over the last two years, Labor has rarely been at the forefront of opinion polls.
Starmer’s team sees proximity to business as an important part of improving the party’s financial credibility. In February, Labor stood behind the Tories on four different economic indicators, according to Opinium.
The same survey this month showed that it still followed the ruling party in “managing the economy” and “reducing national debt”. But Labor had taken the lead in the other two polls: “spend public money efficiently” and “improve your financial situation”.
Senior Labor politicians now meet at Zoom every two weeks with the so-called “B5” group of the largest business organizations, which includes the CBI, the Federation of Small Businesses, Make UK, the British Chambers of Commerce and the Institute of Directors.
This is a marked change from Corbyn’s time. The meetings are usually attended by one of Ed Miliband, the shadow business secretary, Reeves or Starmer, or a combination of the three.
“Labor has changed dramatically with its involvement in business,” said Craig Beaumont, head of external affairs at the FSB. “We have a closer and more structured relationship with the opposition now, which was not the case under Jeremy Corbyn.”
Beaumont said Reeves “especially understands that – and you can see the political decisions starting to flow from it, as if business interest rates”. He added that “for the Conservatives, this is now a much more competitive space”.
A Conservative MP who attended the annual dinner of UK Finance, a financial services trading body, admitted on Tuesday night that Starmer and his team were cutting through. “I was chatting with a couple of bankers who very sharply said that Labor courted them in a very coordinated way. They said ‘you have to take care of your back'”.
Reeves has been busy courting business figures over breakfast, lunch and dinner. “She’s probably met 30 or 40 CEOs since she started the job in May,” said a colleague.
The Conservative Party’s pro-business reputation has taken a hit since Johnson forced a tough Brexit through, Reeves told FT. “Companies, large and small, are increasingly being shut down by the government and Labor. . . has given them a new home. ”
The main opposition party has adopted many of the policies that business groups have been pushing for, from producers’ calls for a new industrial policy to retail executives calling for a revision of business prices.
“Labor has made a great effort to get involved, and we have regular meetings with Ed Miliband and Rachel Reeves,” said Roger Barker, policy director at the Institute of Directors. “It’s a very good thing that all the big parties have a business focus.”
Still, an ally of Reeves said there were several areas of disagreement, citing City’s anger over her policy of cracking down on interest rates – a tax advantage that private equity traders enjoy. “It’s good to have honest and sincere conversations,” the person said. “We are honest that we will not always agree with people.”