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Sir Keir Starmer told a room of chief executives at the Labour party conference in Liverpool on Monday that he wanted a “muscular relationship with business” as part of his mission to get companies back on side after a tricky first year in government.
The problem was working out what the prime minister meant, four puzzled business leaders said.
After shelling out £6,000 per person, companies had been promised an improvement on last year’s gathering, including more face time with ministers. “The mood is better than I expected it would be, but that’s because I’ve spoken to more chief executives than politicians,” said one boss.
Bosses attending included Paul Thwaite of NatWest, Jennie Daly of Taylor Wimpey, Shirine Khoury-Haq of The Co-operative Group, Centrica’s Chris O’Shea, Octopus Energy’s Greg Jackson of Octopus Energy, Steve Rigby of Rigby Group and ClearScore’s Justin Basini.
While some leaders were enthused about their roundtables, others expressed frustration that the ministers allocated to the discussions were not the most relevant ones.
“It was a bit of a mess — why were we talking to someone without any interest or focus in our area,” one said. On one table a minister from the environment department was put on a discussion about high streets.
Others were more successful, such as a roundtable featuring new investment minister Jason Stockwood, who was told by HSBC UK boss Ian Stuart that his bank would like to commit financing to the Heathrow runway extension — it just needed to get approved and built at a faster rate.
Conversations kept returning to Labour’s promises to minimise red tape. “They’ve said they will do it, now they just need to get on with it,” one chief executive said.
Starmer told business leaders over breakfast he had instructed cabinet ministers to reduce regulation in their departments by 25 per cent.
“I’m not sure what that means, or how it would be measured but it would make a difference if they’re serious,” one attendee said. “There’s so much crap businesses have to wade through to do anything — and it restricts ministers too, so there is some promise there.”
The prime minister also promised that Labour would foster closer ties with the EU, including talking up the prospect of student visas and freedom of movement for creative artists. This was shrugged off as relatively meaningless for most businesses, however.
“He mentioned the EU four times and he obviously thought he was going to get a clap. He didn’t.”
Businesses raised concerns about chancellor Rachel Reeves’ claim that she would abolish youth unemployment by promising guaranteed paid work for young people who have been out of work for the past 18 months.
“This government said that they would be listening and working with business — this was announced without any consultation or any details on what it means for us, the ones who presumably will be providing these jobs,” one executive said.
“If it means that they will use it as an opportunity to rework the apprenticeship levy, then it’s a positive. But we aren’t hearing that, or reassurance it won’t just add any extra costs or complexity to our business.”
What was not lost on the audience was the government acknowledging some of the pain caused by the increase in employer national insurance contributions in the last Budget.
Starmer opened the breakfast by saying that he “couldn’t not recognise the impact from the Budget on business”.
However, most executives are already intensely focused on what fresh tax raids await in the chancellor’s November Budget, with many interpreting her comments that “the world has changed” as opening the door to higher taxes.
Shevaun Haviland, director-general of the British Chambers of Commerce, said Reeves needed to go further to directly address business concerns.
“Firms recognise the clear message that fiscal responsibility is important, but they are still hurting. The impact of the national insurance rise continues to be felt. It has hit confidence, investment and recruitment.
“That’s why our message to the chancellor is this: ‘if you want to see growth, there can be no more taxes on business’.”
One chief executive said they were relieved Labour had finally woken up to the threat from Nigel Farage’s Reform UK. “A Farage government would be potentially as damaging to business as Corbyn was.”
Another executive added: “I think it’s neither reasonable nor sensible to expect business not to engage with the party that currently looks more likely than not to form the next government.”
But others said that while Reeves was keen to draw a line between Labour and Reform, the party still needed to tackle the distraction of the “enemy within” — referring to the leadership ambitions of Greater Manchester Mayor Andy Burnham.
Reeves’ speech contained a barely disguised put-down to Burnham, who said last week that Westminster was too “in hock” to the bond markets.
“There are still people who peddle the idea that we could just abandon economic responsibility and cast off any constraints on spending. They are wrong — dangerously so,” the chancellor said.
Burnham, who has distanced himself from a leadership bid, hit back, saying: “I reject entirely this idea that I’m hopeless and I have no idea how to add up.”