Labour's Business Charm Offensive Faces Scrutiny at Conference
Labour's business conference attracts corporate leaders, but concerns over workers' rights reforms and potential tax hikes loom. Clarity on policies sought as Labour aims to maintain its pro-business stance.
The Labour Party's annual conference has kicked off with a highly anticipated "business day," drawing parallels to the fervor surrounding Glastonbury Festival ticket sales. Corporate leaders who secured £3,000 passes are converging in Liverpool, eager to influence policy and forge connections with politicians.
Labour's efforts to cultivate a business-friendly image have been notable, with the Treasury's extensive outreach to executives reportedly causing some friction within Downing Street. A Whitehall insider revealed, "The focus on business has been so intense that No 10 are suggesting an overcorrection."
However, beneath the surface of this corporate courtship, tensions are simmering. Polls indicate growing apprehension among business leaders regarding the impending workers' rights overhaul, a key initiative of Deputy Prime Minister Angela Rayner. This reform is expected to be unveiled next month as part of the employment bill.
The government's approach to flexible working has become a focal point of debate. Plans to make flexible arrangements a default option, requiring employers to justify denials, have raised concerns. The Confederation of British Industry (CBI) reported that 58% of its members, including FTSE 100 giants like AstraZeneca, Unilever, and GSK, anticipate negative impacts from these changes.
Business leaders are grappling with a lack of clarity on policy details. The distinction between "day one" employment rights and those activated after a probationary period remains a subject of "intense" discussion between Angela Rayner and Business Secretary Jonathan Reynolds.
"I think unions will be more angry than businesses will when they see the employment bill [next month]"
Adding to the uncertainty, Sir Keir Starmer's recent warnings about potential tax increases in the upcoming Autumn Budget have dampened consumer confidence. Private equity firms are particularly wary of losing their carried interest tax advantage, currently taxed at a lower rate than the top income tax bracket.
While corporate Britain initially welcomed Labour's election victory, the party now faces a critical juncture in its relationship with the business community. Leaders are seeking more concrete policy details and a positive economic outlook to maintain their support.
As the conference progresses, Labour must address these concerns and reaffirm its commitment to being the "party of business," a promise Sir Keir Starmer made to corporate leaders in Liverpool just one year ago. The coming days will be crucial for Labour to demonstrate its ability to balance workers' rights with a pro-business agenda, potentially shaping the economic landscape of the UK for years to come.
