General election: do business leaders back Labour?

A photograph of British shadow chancellor Rachel Reeves

(Image credit: Getty Images)

published 29 May 2024

As we race towards a 4 July general election, the Labour Party is at pains to point out that a change in government would not be bad for business.

Speaking to business leaders at Rolls Royce on 28 May, shadow chancellor Rachel Reeves called Labour the “party of growth”, adding that more than 120 business leaders have signed a letter expressing their support for a change in government.

“A few years ago, you might not have expected to hear those things from the Labour Party,” Reeves acknowledged, addressing criticisms the party has faced in the past. But she also implored business leaders to “think how far we have come under Keir’s leadership in four short years”.

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We look at the details behind Labour’s suggestion that it is “being recognised as the natural partner of business”. What are its policies? Which leaders have signed the letter? And how is Labour performing on the issue of the economy in the polls?

As well as looking at Labour's approach to UK businesses, you can also what a Labour government could mean for your money.

What are Labour’s policies towards UK businesses?

Reeves’s speech made one point very clear – Starmer’s Labour Party is a world apart from the one that ran for office under Jeremy Corbyn in 2019.

Corbyn was never mentioned by name, but Reeves was keen to paint a picture of a modern, centrist Labour. “I’m not one of those politicians who thinks the private sector is a dirty word, or a necessary evil,” she said.

However, so far, the party’s commitment to business leaders is light on detail.

Reeves addressed this pre-emptively in her speech, saying: “I know there is no policy I can announce – no plan that can be drawn up in Whitehall – that will not be improved from engagement with business. And our manifesto will bear the imprint of that engagement.”

One point that Reeves did reiterate in her speech was Labour’s promise to cap corporation tax at its current rate of 25% for the duration of the next parliament. This was not a new promise today, but one that the party unveiled in February.

Which business leaders signed the letter?

The letter Reeves flagged in her speech was sent from 120 business executives to The Times.

It includes signatories such as Benny Higgins, former chief executive at Tesco Bank; Andrew Higginson, board member at JD Sports; John Holland-Kaye, former chief executive at Heathrow airport; Tom Kerridge, chef and restaurateur; and Jimmy Wales, the founder of Wikipedia.

The letter said: “We, as leaders and investors in British business, believe it is time for a change. For too long, our economy has been beset by instability, stagnation and a lack of long-term focus.”

It went on: “Labour has shown it has changed and wants to work with business to achieve the UK’s full economic potential. We should now give it the chance to change the country and lead Britain into the future.”

Critics have dismissed it by pointing out that no FTSE 100 chief executives are included in the list of signatories. Furthermore, many of the signatories are former chief executives rather than leaders in current positions.

What’s more, as Politico Playbook pointed out, the letter came back to bite the party when “the Unite union (a significant Labour donor) complained that Heathrow boss John Holland-Kaye was on the list, after firing and rehiring some 4,000 staff on worse conditions in 2020.”

How is Labour performing on the economy in the polls?

The letter from business leaders has not had quite the reception Labour would have been hoping for. However, the party will be pleased to see it is currently polling ahead of the Conservatives on the economy.

In the latest monthly tracker from YouGov (6 May), 27% of those polled said Labour would be the best party at handling the country's finances. Meanwhile, 20% of respondents voted for the Conservatives.

This trend has been in place for some time now, with Politico suggesting it started around the time of Liz Truss’s mini-Budget.

This is a bitter pill for the Conservatives – a party that has traditionally painted itself as a safe pair of hands when it comes to the country’s finances.

Katie has a background in investment writing and is interested in everything to do with personal finance, politics, and investing. She enjoys translating complex topics into easy-to-understand stories to help people make the most of their money.

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Before joining the MoneyWeek team, Katie worked as an investment writer at Invesco, a global asset management firm. She joined the company as a graduate in 2019. While there, she wrote about the global economy, bond markets, alternative investments and UK equities.

Katie loves writing and studied English at the University of Cambridge. Outside of work, she enjoys going to the theatre, reading novels, travelling and trying new restaurants with friends.