RUTH SUNDERLAND: Tories hit by business blues

Tories hit by business blues: Shadow Chancellor Rachel Reeves and boss Sir Keir Starmer sidling up to corporate grandees, says RUTH SUNDERLAND

  • Perceptions over competence to run economy have changed since election 
  • Rishi Sunak and Jeremy Hunt have failed to articulate vision for economic reboot
  • This has left a void for Labour 

New Labour – remember them? – had their ‘prawn cocktail offensive’ when Gordon Brown and his acolytes successfully seduced the City ahead of the landslide 1997 victory. 

As Shadow Chancellor Rachel Reeves looks ahead to 2023, her thoughts will be turning along similar lines. She and her boss, Sir Keir Starmer, have been sidling up to business leaders. Reeves was spotted hobnobbing at the distinctly un-socialist Chelsea Flower Show, a magnet for corporate grandees. We can expect these efforts to intensify this year. 

Perceptions among the electorate of the two main parties and their competence to run the economy have changed since Boris Johnson won the 2019 election when Jeremy Corbyn and his hard-Left sidekick John McDonnell were rejected by voters. 

Happy days: Shadow Chancellor Rachel Reeves and her boss Sir Keir Starmer have been sidling up to business leaders

Starmer is parading about, declaring himself to be proudly pro-business. The party just before Christmas hosted a shindig for CEOs in Canary Wharf, sponsored by no less an agent of international capitalism than the banking giant HSBC. 

The event was a sell-out, with a waiting list. Guests and keynote speakers included top tier figures such as Tesco’s John Allan and Aviva’s Amanda Blanc. 

This should give the Tories pause for thought. Business people closest to the party – the donors – tend to come from a narrow sub-set of the commercial world – self-made entrepreneurs, hedge fund managers or financiers who do not answer to a board or shareholders. Leaders of large listed corporates usually remain party-neutral in public for fear of offending. 

The cosying up to Labour is a blend of pragmatism and frustration with the Tories over strikes, the Liz Truss debacle and lingering resentment over Brexit.

Leaving the EU, plus the Truss interlude – when the UK was given a ‘moron premium’ to cover the risks of political stupidity – has, they believe, deterred overseas investors. 

There is an undercurrent among business leaders of feeling ignored and slighted by the Conservatives. It barely matters whether any of this is correct or fair. Perceptions have taken root in the absence of a strong counter-narrative. 

Hunt is working on plans to turbo-charge growth ahead of the Budget, as we explain below, but he will face intense scepticism. 

We are told, as if it were fact, that Britain is a basket case, that we are performing far worse than comparable economies, and that our situation is uniquely awful. It is nonsense. The UK is still the sixth largest economy, our financial sector remains world-beating, we have the huge advantage of the English language, robust property rights and the rule of law. 

The Truss/Kwarteng mini-Budget needs to be put in perspective. There were no military coups, no riots and the boring blokes in suits were soon back in charge. 

Rishi Sunak and Jeremy Hunt have steadied nerves on markets but they need to do more. The pair looked impotent in the face of the wave of strikes over Christmas. 

They have slapped millions with higher taxes and failed to articulate a convincing vision of how they will reboot the economy. 

This has left a void for Labour. Reeves says she will make the UK the start-up capital of the world, scrap business rates and draw up a new industrial strategy. 

From a party that was so recently in the grip of Corbynites (who have not gone away) and which remains in hock to the unions, this may be implausible stuff. Even so, this narrative will gain a stronger hold in 2023 if the Tories fail to nip it in the bud.