Conservatives are not just losing the argument on business, Labour is winning it

Keir Starmer and Rachel Reeves have set about convincing firms that they are the party of profit, writes Cameron’s skills tsar and ex-CBI chief Paul Drechsler

I know a lot of influential people in business who feel the same as I do (PA)

I have worked with business leaders all my life – and I sense change.

Business leaders are, on the whole, “small C” conservatives who want stability and certainty. For decades, it was taken as a fair assumption that a Conservative government was dedicated to such principles. It is why so many business leaders donated to the Conservative Party. Tax and spend was seen, sometimes unfairly, as the Labour formula for failure.

I worked for 24 years at ICI, 10 years at Wates – and during my three years as president of the Confederation of British Industry (CBI), I always got close to business and reading the mood of its CEOs. They were always open to what they wanted, and were clear about who they trusted in politics. Brexit, Covid and splits in the Tory party have challenged that.

Rishi Sunak is patently a decent, trustworthy leader who appears to respect law and order and wants fiscal responsibility. As the first Asian-British prime minister, he is making history – but he is struggling to retrieve his party from the errors of his predecessors.

The Conservatives are not just losing the argument; Labour is winning it. Companies up and down the country are being wooed. I say this with no great pleasure – I was a Cameron appointee as chair of The Skills Funding Agency. But Labour have set about convincing business that they are encouraging entrepreneurs and enterprise (and, whisper it quietly: profit).

The change in the way Labour is perceived can be attributed largely to Rachel Reeves, the shadow chancellor and a former BoE analyst who has been leading the campaign to partner with business and Keir Starmer, the opposition leader. I know a lot of influential people in business who feel the same as I do.

At a recent panel sponsored by Heathrow Airport, Starmer made it clear that he wants to work with business: not once he is PM – as seems increasingly likely – but beforehand, too. He wants to work in partnership with business to encourage economic growth, improve productivity and keep inflation on a tight rein.

But there is a sense of dramatic change in many boardrooms and corridors of power. I am hearing that CEOs of big high street firms are starting to talk with warmth – and even optimism – towards Labour. This is a seismic change. When I talk to business leaders now, for the first time in 20 years, the conversation turns to what Labour might do with business. Whereas before this might have been about mitigating damage, now it is far more positive – even reassuring.

This could be dismissed as wishful thinking. There is an increasing consensus that the Conservatives are considered likely to lose and that Labour is winning the argument. It understands that it must – and will – help companies. It needs to end fears it is all about tax and spend and confiscatory in ideology.

The UK has an incredible set of cards to play on the international table. Our civil servants are admired the world over. Our strength in financial and professional services is bolstered by an exciting cluster of fintech businesses. Our world-leading universities create the conditions for pharma, life sciences and biotech companies, which are working to solve some of our greatest medical challenges.

I am admiring of how Sunak has given a much-needed sense of safety and stability after his two predecessors caused a run on the bank of trust. Bosses have been crying out for steady partners who deliver a sound industrial strategy, and respect the rule of law. And while that would have seemed impossible for Labour a few years back under Corbyn, now Starmer has put new colours on the ship and sailed Labour into sensible and sane waters. The rule of law is fundamental to a company’s license to operate, and its ability to carry out international trade.

Too much has happened that can’t be undone or easily reversed or forgotten by the Conservative government. The alternative now is a party led by a sensible lawyer who was director of public prosecutions, and one of the foremost legal advisers in the country. For law and order, this is more than stealing the Tories’ clothes. It is a total sartorial refit.

Business is a force for good. It creates jobs and improves people’s lives. Labour is showing itself willing to create the conditions for business to thrive, predicated on respect for people, collaboration between government, business and trade unions and competitive rewards for public servants.

If it can deliver this, then business optimism will have paid off.