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Sir Keir Starmer’s opposition Labour party will step up efforts to woo the private sector on Thursday by hosting a “business day” for 400 corporate leaders. That tickets reportedly sold out within hours suggests it is pushing on an open door. Many companies hope a change of UK government could at least produce the stability and consistency that Conservative governments of late have singularly failed to provide. Yet to secure the corporate world’s trust, Labour needs to provide more detail of its plans, in several crucial areas.
Labour has reason to be wary of providing too much information; winning the next election will require it to hold together the broadest coalition, without unsettling key constituencies. But Starmer needs business help to deliver the growth that is at the heart of his agenda. The partnership with business he has touted should extend to explaining today how key elements would work, so that companies can plan accordingly.
One big question is how Labour sees the balance between employers and employee rights. Central to its programme is a package of worker protections that has been important to keep the Labour left onside while steering away from radical Corbynism. Reducing insecurity and curbing zero-hours contracts, for example, are hard to argue with. Yet granting basic individual employment rights from day one would limit employers’ flexibility. After a surge in industrial action in the past year, many bosses will also balk at a repeal of key Conservative trade union legislation, making it easier to go on strike. Business should know what elements of the package will be prioritised, who will be covered — and what transition periods will be granted.
In terms of its growth agenda, Labour’s boldest bet is its Green Prosperity Plan — a rough equivalent of America’s Inflation Reduction Act — with debt-funded public investment in the green economy increasing, over time, to £28bn a year. Given the state of public finances, pushing back the timescale to hit that figure made sense. Goaded by Tory accusations that a Labour government would be profligate, it now seems poised to water down the commitment even further — at risk of undermining the very consistency that business hoped a Labour government would bring. Business will want reassurance that component parts of the package remain intact, and clarity on the specific technologies it will seek to boost.
More transparency is needed, too, on Labour’s broader strategic priorities, beyond a pledge to focus on areas with “existing or potential comparative advantage”. Shadow chancellor Rachel Reeves’ insistence that Labour would “unashamedly champion” financial services is welcome, along with a plan for the sector that would back or extend recent Conservative deregulation.
But mixed messages must be avoided. Labour’s desire to close a tax loophole used by private equity executives must be balanced with the need to attract private capital as one of the fastest-growing forms of investment. It should also spell out more clearly how it aims to nurture other service sectors that are a mainstay of the UK economy, from professional services to creative industries.
Though Brexit is rarely mentioned, the UK opposition should explain how its priorities will be supported by greater alignment with or divergence from EU regulation in different sectors. And with reform of planning central to plans ranging from accelerating green energy approvals to building more homes, Labour should set out how it thinks it can change the rules without being ensnared by Nimbyism and inertia as the Conservatives have been.
Starmer has promoted some Blairites while adopting a programme as radical in many ways as Ed Miliband’s losing manifesto in the 2015 election. This is clearly no longer the party of Jeremy Corbyn. But business needs more visibility on exactly how this iteration of Labour would act in office.