UK Business Is Abandoning Tories, Commons Committee Chair Says

(Bloomberg) -- The UK business community is shifting away from Rishi Sunak’s Conservatives and engaging more with Labour, according to an opposition MP who leads parliamentary scrutiny of the government’s business policies.

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Corporate executives are trying to meet with Keir Starmer’s party because “we are ready for government,” Labour’s Darren Jones told Bloomberg’s Emily Ashton on BBC Radio 4’s Week in Westminster program on Saturday.

Jones, who is chair of the House of Commons business select committee, said the relationship between companies and Labour was “very hostile” under former leader Jeremy Corbyn but that’s now “completely changed.”

Read More: Former Tory Donors Turn Their Support to Starmer’s Labour Party

Chancellor of the Exchequer Jeremy Hunt’s package of spending cuts and tax rises on Thursday received a lukewarm response from the British business community, which welcomed his calming influence on financial markets but complained he isn’t doing enough to spur economic growth.

The business world has had a tense relationship with the Conservative Party in recent years, fueled by a sense that they were ignored over their warnings about the negative economic impacts of Brexit and that the Tories lack a comprehensive, consistent plan to grow the economy.

Tina McKenzie, chair of policy and advocacy for the Federation of Small Businesses, one of the UK’s largest business groups, said Hunt could’ve done more to help companies at a time when firms are struggling with high inflation, staff shortages and cashflow pressures.

McKenzie told Bloomberg Radio on Friday that Labour’s stance on cutting business taxes for small firms is more appealing than that of the Tories.

Read More: Keir Starmer Says UK Labour Is ‘Proud of Being Pro-Business’ (1)

The growing ties between the business world and Labour has come as Starmer’s party enjoys a lead of about 20 points over the Conservatives in opinion polls. The next election is expected in 2024 -- with Labour trying to get back into office after 12 years in opposition.

Even Conservative MP Anthony Browne acknowledged that businesses “follow the opinion polls” and that Starmer has appeared to understand that parties don’t get elected if they are seen as “hostile to business.”

“This was the lesson from Tony Blair and I see Keir Starmer do the same thing, the prawn cocktail offensive in the City,” he said on the BBC’s Week in Westminster.

But Browne dismissed claims that small businesses are abandoning the Tories, saying: “We are absolutely the party of entrepreneurs.”

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