Boris’ tax mania could push British business into Labour’s open arms
An exec recently recalled a meeting between banking bosses and ex-Shadow Chancellor John McDonnell when it looked like Labour may just seize power.
As the suits traipsed into a room the Marxist quipped: “Don’t worry. We’re not sending you to a re-education centre in Doncaster … yet.”
He also promised to whack corporation tax up from 19 to 26 per cent if he made it to No.11.
It turns out McDonnell wasn’t the one to watch out for. In last week’s Budget, Rishi Sunak confirmed corporation tax will shoot to 25 per cent under the Tories.
What’s more, Boris’ Blues are shaking their own Magic Money Tree and spraying around billions to reposition themselves as the “real party of public services”.
Politics – funny old game.
The Tory schizophrenia has the great and the good of Britain’s boardrooms looking for love. And a Labour party under new ownership is quietly going about trying to woo them.
Critically, it has the beginnings of a plan that is having some success.
It began with Labour leader Keir Starmer’s largely forgetful opus to the “Road Ahead”. Buried on page 22, was a clue: business, he wrote, is a “force for good”.
In a stroke of a pen, big business in Britain realised it was dealing with a different beast.
Fortunately for Starmer, his Shadow Chancellor Rachel Reeves has also turned heads with a string of impressive performances in the Commons and politically astute policy recommendations in areas the Tories are too afraid to touch.
It was no accident Reeves used her speech at the Labour Conference in September to promise a fundamental reform of business rates.
It was a laser guided attack following countless meetings with business leaders, where the one-time Bank of England economist has listened to bosses taken aback by Boris Johnson’s approach.
Retail chiefs have been calling for reform of rates since 2008 and for more than a decade have been disappointed by the lack of appetite from the Conservatives to consider exactly the kind of review Labour is now promising.
On the eve of her speech, Reeves and her team knew they were onto something good when business groups, given advance sight of the promise, emailed in supportive quotes by the truckload. As each one dropped into the inbox it was cheered like a goal at a football match.
Fast forward a month, Reeves has continued to build momentum on her debut.
Take last week’s Budget.
Rushed in at short notice to reply to the Chancellor in the Commons, Reeves coped admirably despite having to attack a Brownite document she could have written herself. Tearing into the Tories for loading the burden on working people, the Shadow Chancellor said that never before had the public been asked to “pay so much for so little”. It was one of those lines in politics that immediately stuck. You would hardly be surprised to see it flying on an election banner. Or on the side of a bus, perhaps.
The following day she went one better and found a dividing line with Tories.
On her morning broadcast round, she pointed to the anaemic GDP forecasts at the end of the current Parliament and lamented the lack of “any plan for growth” in Rishi’s calculations.
It buys Labour time. And make no mistake, business is keen to listen to the Opposition.
For many, they feel Boris Johnson only thanks them when they make him look good and believe Michael Gove is much more into entrepreneurs than established companies.
Still, there are obvious hurdles Labour will have to overcome before big business actually switches sides.
While Keir Starmer has backed away from talk of renationalising the railways and energy companies, he signed a pledge to do just that during his bid for the leadership.
And then there’s the trade unions. Labour’s paymasters have been promised a collective bargaining role in key parts of the private sector, despite representing around 13 per cent of the private workforce.
Brexit also looms large. Labour insists it accepts the vote, yet continually talks about wanting to be closer to Brussels to help exporters hit by red-tape. But there is confidence that the party is on the right path.
“Rachel used to be met by business leaders with relief, simply because she wasn’t the old lot,” one insider says.
“But now there’s genuine warmth.”
Watch this space.