KEIR Starmer’s Labour Party is preparing an assault on the ruling Conservatives’ claim to be the UK’s natural party of business with a growth plan focused on the industries of the future, following the recommendations of a former Tory minister. 

On Thursday (Dec 8), Shadow Chancellor of the Exchequer Rachel Reeves will announce that “Labour is back in business” at a conference to be attended by 350 company leaders, including top executives from Aviva, SSE and HSBC. The Labour Party said that the centrepiece of her pitch will be a plan to boost startups based on recommendations from Jim O’Neill, former chief economist at Goldman Sachs.

O’Neill’s study “provides crucial insights towards achieving one of the guiding ambitions of the next Labour government: to make Britain the best place to start, and to grow, a business”, Reeves will tell delegates. 

Labour’s Shadow Chief Secretary to the Treasury Pat McFadden said that the party wanted to strike a “partnership with business that will see better growth for the country”.

He called on the government to improve its Brexit trade deal and resolve the rolling strikes causing chaos across the country. On striking health, postal and rail workers, he urged the government to negotiate a broad deal across the public sector. 

“When you’ve got such widespread industrial action, you need a better approach than going through one industry after another condemning the staff,” he said in an interview with Bloomberg Television. “All of this speaks to a government that’s lost its grip.”

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He added that Labour would not “re-run the Brexit argument” despite wanting to stay in the European Union (EU), but would “try to make the best possible future we can outside the EU”. That would mean seeking recognition of professional services industries, creative industries and the City of London.

He accused the government of “having completely ignored the City” during the Brexit negotiations. Financial reforms expected to be announced tomorrow are being “dressed up as Brexit freedoms” when many have nothing to do with the EU.

This is the latest step by Labour to rebuild relations with UK businesses after leader Starmer’s left-wing predecessor, Jeremy Corbyn, damaged the party’s standing with corporate Britain.

At the Labour Party conference in September, Starmer vowed to “fight the Tories on economic growth” and “turn the UK into a growth superpower”. The annual gathering drew scores of company executives and lobbyists. Former Tory donors have also been turning to Labour, and in the third quarter, the party raised £1.7 million (S$2.8 million) more than the Tories did – its biggest fund-raising advantage since the last general election in 2019.

When Labour last came into power in 1997, a good relationship with businesses was pivotal to their success. Then-Chancellor Gordon Brown held a series of meetings with executives dubbed the “prawn cocktail offensive”. 

Sunak’s territory

O’Neill, the former Goldman Sachs chief economist, served as a minister in David Cameron’s and Theresa May’s Conservative governments. His review, titled “Start-Up, Scale-Up”, calls for greater collaboration between institutions and venture capital firms to unlock billions of pounds of extra investment, a bigger role for the British Business Bank and greater help for university spin-outs.

According to Labour, the proposals would unlock institutional investment by drawing on lessons learned from France’s Tibi programme to link venture capital with institutions.

Secondly, they would give the British Business Bank greater independence and the ability to leverage external funds to amplify its work.

Lastly, they would involve publishing an annual dashboard which summarises each university’s offer to spin-outs, along with success metrics.

The push to encourage new businesses also treads firmly on ground that Prime Minister Rishi Sunak has sought to occupy. While he was still Chancellor, he said that he wanted to prioritise innovation in the British economy. Speaking at a lecture, he recalled his time spent studying in California “surrounded by Silicon Valley startups, living and breathing that entrepreneurial culture”.

But Reeves will stake Labour’s claim on the new industries, saying that Britain is at a “post-Brexit crossroads”.

“We can continue down the road of managed decline, falling behind our competitors, or we can draw on bold thinking to propel us forward,” she is due to say at Thursday’s conference. She will add that O’Neill’s recommendations are the first step in closing the £16 billion investment gap in high-growth firms that the UK is currently missing out on.

The proposals feed into Labour’s broader vision that policies that serve workers are also good for business. They come amid forecasts of recession and just days after the UK’s biggest business lobby, the Confederation of British Industry, accused the government of having “no plan” for growth.

O’Neill, who is an independent peer, said: “The more that all political parties support the ecosystem of startups for the UK, the more they become entwined in the DNA of policy thinking for the future.” BLOOMBERG