With entrepreneurs fleeing in droves, the Tories risk no longer being the party of business

Writing from the Conservative Party conference in Manchester, Andrew Grice says that business leaders may be leading the charge on abandoning the Tories and embracing Labour

Richard Walker, executive chair of the Iceland supermarket chain, has quit the party with a blistering attack (GMB/ITV)

Are the Conservatives losing the confidence of business? There are growing signs of it. Richard Walker, executive chair of the Iceland supermarket chain, has quit the party with a blistering attack, accusing them of being “out of touch” in the cost of living crisis, “flip-flopping” on net zero and HS2 and not living up to their name because they are “not conserving anything”.

Walker tried to become a Tory parliamentary candidate but did not find a seat. He accused the party of wanting to muzzle him and telling him not to trumpet Iceland’s pledge to go net zero by 2040. Tory sources insist his criticism of the party is well known. A good communicator, Walker would have been an asset for the Tories. I think it’s a pity that party politics is so addicted to discipline and being on message that it can’t find a place for someone like him.

He is not the only business figure to express frustration at the Tories. John Caudwell, the founder of Phones4U and the party’s largest donor before the 2019 election, threatened to stop donating over the “madness” of Rishi Sunak diluting net zero measures. Another donor, Philip Harris, the peer and founder of Carpetright, said the Tories did not “deserve” to win the next election and has given Labour’s Rachel Reeves £5,000.

Sunak is very good at charming small groups of businesspeople. “Tell me what we can do for you,” is his stock opening line. He has worked hard to repair damage to the relationship caused by Brexit, opposed by many in the corporate world, and by Boris Johnson’s “f*** business” jibe.

But Sunak has hiked corporation tax (though Labour would have increased it if the Tories hadn’t got there first). And the prime minister’s dithering over whether he will delay or scrap the Birmingham to Manchester leg of HS2 has further strained relations.

If there’s one thing business wants, it’s certainty. A prime minister who promised stability after the turbulence of the Johnson and Truss regimes has created instability over HS2. There are real fears that foreign investors will be put off by the coming U-turn, while some furious contractors are wary of working on government projects again.

As usual, companies and their lobbyists are out in force here at the Tory conference in Manchester. It’s the governing party, after all. But significantly, more of them will turn up at next week’s Labour conference in Liverpool, which they will attend in record numbers. About 300 chairs and chief executives of big companies are due to be there. Labour’s 200 tickets for a £2,520-a-head business forum sold out in a day. Keir Starmer and Reeves, the shadow chancellor, win plaudits from company chiefs in a charm offensive during which they make reassuring noises about sticking to Labour’s tough fiscal rules.

As the head of one trade group told me today: “People can see which way the wind is blowing. All they want to do now is find out what a Labour government would do, particularly on the fiscal side. A lot of people have lost interest in the Tories.”

It’s a damaging signal for Sunak as he tries to convince Tory activists and MPs at his conference that all is not lost, and the party can still retain power at next year’s election.

Although there is no “business vote” as such, the views of company bosses matter. Signs that the Tories are losing their confidence while Labour is gaining it is another blow for Sunak. More Tory donors will probably turn off the taps and some will doubtless switch to Labour.

The doubts in the business world about the Tories, and its cautious embrace of Labour, contribute to a picture of a political tide turning and a country braced for a change of government. The very opposite of the one Sunak wants to paint at this conference.