So, Sir Keir Starmer has finally decided to grace us with his presence. After another week of globe-trotting – which encompassed a military parade in Paris, some greenwashing at the COP summit in Azerbaijan, and a round of sun-drenched glad-handing at the G20 in Brazil – he flew back to a sub-zero Britain.
And to rebut the charge his habitual jet-setting is making him look dangerously aloof and out of touch, what did the Prime Minister do? Visit a farmer who’s deeply worried last month’s Budget would see their family ousted from land they have been ploughing for generations? Go to a housing estate to reassure tenants fearful about the impact of their winter fuel allowance being axed?
Nope. He rolled up for a meeting with BlackRock, the world’s largest asset manager, which has an estimated market value of $11.5trillion. Sitting opposite a smiling BlackRock CEO Larry Fink (personal wealth $1.2 billion), Starmer cheerily tweeted: ‘I’m determined to deliver growth, create wealth and put more money in people’s pockets. This can only be achieved by working in partnership with leading businesses, like BlackRock, to capitalise on the UK’s position as a world-leading hub for investment.’
As he did so, Labour MPs were heading back to their constituencies, and digesting figures that revealed up to 100,000 pensioners could be driven into poverty this winter as a result of their Government’s benefit cuts.
On the surface, Starmer’s attempts to align himself with – actually, let’s be honest, suck up to – big business is sound politics. For any Labour leader it’s an important part of softening the party brand. And that’s especially true given that brand was so comprehensively tarnished by five years of undiluted Corbynism.
But the reality is business isn’t buying it. In the run-up to July’s General Election, Labour’s efforts to ingratiate themselves with corporate Britain were dubbed ‘the scrambled egg offensive’, as a series of breakfast meetings replaced the prawn cocktail lunches preferred by then Shadow Chancellor John Smith during his doomed effort to woo the City in the early 1990s.
In response to Smith’s abortive attempts, Tory minister Michael Heseltine famously quipped: ‘Never have so many crustaceans died in vain.’
Chancellor Rachel Reeves must surely have been pondering how many eggs had been laid in vain after she saw the letter penned by 80 leading retailers last week, which condemned her Budget, and claimed it would lead to job losses, soaring prices and high-street closures.
‘The sheer scale of new costs and the speed with which they occur create a cumulative burden that will make job losses inevitable, and higher prices a certainty,’ the letter from British Retail Consortium members warned.
But she shouldn’t be unduly surprised. This was always how the great Labour/Lobbyist love-in was destined to end. Not least because there never was any great love for Labour among the business community.
The cavalcade of blue-chip managers who schlepped up to Liverpool to kiss Reeves’s ring at the party’s pre-election conference was a parade born of necessity, rather than belief. Business leaders had read the polls and knew the Tories were toast. They just wanted to get in some special pleading for their own companies and sectors before the inevitable Labour landslide reshaped the political landscape.
It was pleading that was always destined to fall on deaf ears. As soon as Starmer and Reeves decided the bulk of their £40 billion tax rises should target corporate, rather than personal, taxation, a schism with business leaders was inevitable.
So now the Prime Minister and his Chancellor may as well make the most of it.
As I wrote on the day, the Budget was crude, old-fashioned, class war politics. But having launched his class war, Starmer might as well try to win it.
For a start, he could point out that those companies warning of impending job losses are, in fact, cynically using the Budget as cover for a cull of workers that was already in the pipeline.
BT has already said that 75,000 to 90,000 jobs will be axed by 2030 as part of plans for ‘a leaner business, with a brighter future’. Tesco recently announced 2,000 job losses to ensure it remains ‘focused on delivering value for our customers’. At the start of the year, Sainsbury’s declared 1,500 jobs would go as part of its ‘Save And Invest To Win’ strategy.
Starmer could also highlight the profits being made by those companies now bemoaning an increase to employers’ National Insurance contributions and a rise in the National Minimum Wage.
According to BT chief executive Allison Kirkby, the Budget will cost her company £100 million. ‘It’s a new inflationary pressure that we need to suffer in our business’ she wailed.
Which sounds truly terrible, until you realise this year her company reported pre-tax profits of £1.2billion, and Kirkby herself takes home a salary of £1.2million, with the potential to triple it in bonuses and share options.
The Prime Minister might also like to remind the country that at a time when working people have been fighting to heat their homes and put food on the table, British business has been doing very nicely off the back of taxpayers: Covid support for business totalling £69billion. Help for energy costs of £18billion. Billions more to subsidise low wages through the tax credit system.
Many analysts believe the decision by Starmer and Reeves to hike business taxes will prove their undoing. They predict a 1970s-style descent towards stagnant wages, rising dole queues and soaring prices.
And they may be right. But these tax hikes are the Labour government’s chosen policy. So the Prime Minister and his Chancellor need to go out and sell it.
And they won’t do that by being seen cosying up with the fat-cats of BlackRock.
In the run-up to his 2019 Election victory, Boris Johnson was told business leaders were becoming alarmed at his Brexit proposals. His blunt response was to advise them to combine sex with travel.
It wasn’t the sort of language you expect from a Prime Minister, and it flew in the face of a prevailing political orthodoxy that held corporate Britain had to be indulged. But it was music to the ears of voters tired of being told the needs of shareholders should always trump the needs of the nation.
After Labour’s first Budget for more than 14 years, Sir Keir Starmer won’t fool anyone he’s on the side of business. His job now is to convince them he’s on the side of the people.
This post was originally published on here
