Is Labour now the party of business?

Starmer is wooing Davos delegates but trails Sunak on economic trustworthiness

Rachel Reeves and Keir Starmer in Davos
Rachel Reeves and Keir Starmer in Davos
(Image credit: Fabrice Coffrini/AFP via Getty Images)

Keir Starmer has told the annual meeting of the World Economic Forum in Davos that “the British economy will be open for business again” under a Labour government.

Business figures and bankers said Starmer and his shadow chancellor, Rachel Reeves, “had impressed in their attempt to demonstrate that the opposition is ‘open to business’”, reported Swiss Info.

The pair were “not slow to embrace the Davos spirit” in Labour’s “most high-profile attempt at business engagement”, said the site, but the party has been “building relations for over a year”.

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What did the papers say?

Labour raised more than £2m from individual donors last year as Starmer’s “pro-business drive showed signs of cutting through”, wrote Ben Riley-Smith, political editor of The Telegraph.

Electoral Commission declarations show a similar rise in donations to Labour from companies, reflecting a “concerted effort” by Starmer to “project a more pro-business message”.

Gareth Quarry, a multimillionaire recruitment tycoon, donated £100,000 to the Conservatives under David Cameron and Theresa May but lost faith in the party under Boris Johnson. Last year, he announced that he would be giving Labour £100,000.

“Having previously engaged with the Tory Party on business over many years, Johnson’s infamous ‘f--- business’ attitude was sadly all too evident,” Quarry told The Telegraph, whereas with Labour under Starmer, he has “found a party truly committed to working in partnership”.

Reeves, a former economist at the Bank of England, has been “getting into her role as a City-friendly shadow chancellor for a while now”, wrote Katy Balls, political editor of The Spectator, “embarking on a time-intensive charm offensive with business leaders”.

A Tory peer told Balls that they were at a breakfast meeting she addressed “and I hate to say it, but she was plausible. All too plausible.”

When Labour held a conference for business leaders at Canary Wharf, one of London’s financial hubs, last month, Starmer said the party wasn’t just pro-business but “proudly pro-business”.

Attendees were “wooed first by coffee and pastries, then over lunch with a noodle dish and strawberry-and-melon-infused water”, said the BBC’s political correspondent, Iain Watson, but “neither Starmer nor Reeves” could “name a single company which was endorsing the party itself for the first time”, he noted.

Business leaders are “increasingly clearing their diaries for time with shadow ministers”, said the i news site, including shadow levelling up secretary Lisa Nandy, to discuss Labour’s plans to regenerate UK towns as the party “continues to rebuild its reputation among company executives”.

Starmer will hope to be able to mirror on a national level the successful relationship that Westminster City Council has built with businesses since Labour won control last year.

The day after Labour took the council, “there were certain [business] people running around in a panic”, council leader Adam Hug admitted to the Financial Times, but the “feedback we get is that [companies] feel that we’re much better at listening to them than the previous [Tory] administration”.

What next?

Writing for The Times, Reeves said Labour’s plans include “fixing the holes in the Brexit deal, making sure Britain is the best place in the world to start and grow a business”, and “putting in place a new industrial strategy to give business certainty”.

Labour would “deliver a zero-carbon power system by 2030 and start a programme of home insulation to kit out 19 million homes with the energy-efficient retrofit they need”, she added.

She said her plans “mean we will restore economic growth, improve living standards, create jobs, tackle climate change, and bring in global investment – all built on the rock of economic stability and certainty”.

Starmer said he had been promoting the idea of a Clean Power Alliance at Davos. On a CNBC-moderated panel, he said the international body, an “inverse OPEC,” would address the joint economic challenges of climate change, renewable energy job creation and household energy costs.

However, there are signs that Labour has more work to do to become the party of business. Downing Street has been “heartened” by polling suggesting that Sunak is ahead of Starmer on trustworthiness on the economy, wrote The Telegraph’s Riley-Smith, even with the Tories trailing by 20 points overall.

Labour’s long time on the sidelines could prove an obstacle. In 2021, the boss of a multibillion-pound global investment fund, which owns significant infrastructure assets in the UK, told The Guardian that while Labour are “more palatable” they have “zero track record”.

“You would be electing a party that has not been in power for some time and would have to have extremely clear policies,” they added.

In the meantime, we should not expect many fireworks, said the BBC’s Watson. Labour is “putting emphasis on not putting a foot wrong”, he wrote, because “appearing serious and responsible and appealing to new sources of support is seen as far more necessary than generating headlines”.

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Chas Newkey-Burden has been part of The Week Digital team for more than a decade and a journalist for 25 years, starting out on the irreverent football weekly 90 Minutes, before moving to lifestyle magazines Loaded and Attitude. He was a columnist for The Big Issue and landed a world exclusive with David Beckham that became the weekly magazine’s bestselling issue. He now writes regularly for The Guardian, The Telegraph, The Independent, Metro, FourFourTwo and the i new site. He is also the author of a number of non-fiction books.