Labour connects with rich friends as it seeks to rekindle affair in the City

Keir Starmer turns to New Labour old boys' network as big business grows increasingly disillusioned with Tory party bedfellows

Labour leader Keir Starmer and Shadow Chancellor Rachel Reeves speak to the media on a visit to the London Stock Exchange. Getty Images
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It is a good job that Jonathan Reynolds and Rachel Reeves are not prone to putting on weight, not so it would show.

Reynolds, the Shadow Business Secretary and Reeves, the Shadow Chancellor, were set the target of meeting executives from the UK’s 250 largest listed companies in a matter of months. That’s an awful lot of cups of tea, biscuits and more to get through.

As if that was not enough, anyone doubting Labour’s serious intent in persuading business that they are fit to govern and can be trusted with managing the economy should attend the party's annual conference in October. There, in Liverpool, they will witness a growing love-in between UK PLC and the successors to the socialists of old, who still stand to sing the Red Flag at the end of their annual gathering.

For the Tories, that used to be enough – red in tooth and claw, once a red, these were the phrases trotted out by the folk who clung to the belief they were the party of business. Under Tony Blair, New Labour worked hard at dispelling that notion, scrapping the ‘Clause 4’ nationalisation pledge in its constitution, repeatedly proclaiming affection for capitalist generators of wealth.

Then, under Gordon Brown, more of a left-wing ideologue, that romance waned but not entirely – businesspeople admired his seriousness and his intellect, and were full of praise for Brown’s handling of the banking crisis. He was followed, though, by Ed Miliband, less acceptable, and Jeremy Corbyn, oh dear.

Since, Keir Starmer has doggedly attempted to rekindle the affair. The chemistry may not be entirely right, there’s still a degree of distrust with corporates unable to shake-off the spectre of the union bosses hovering in the background and the front-bench presence of the likes of Angela Rayner, who they see as decidedly old left, and Labour’s refusal to condemn the public sector strikes.

Nevertheless, Labour has steadily reclaimed lost ground. The exhibition in the main conference centre will be packed, as will the nightly receptions held by some of Britain’s biggest, best-known firms. The lobbyists and public affairs advisers will be out in force, wheeling their charges from one gathering to another. Some will be large; others will be small. An especially hot ticket will be the Gala Dinner, at which a member of the Labour leadership team will be present on each paid-for table.

They’ve been aided and abetted in their quest by the Tories. When he was premier, Boris Johnson did not disguise his disdain for big business, uttering profanities to that effect. In fact, the mutual loathing went back further, to Brexit – Britain’s companies were virtually unanimous in wishing to remain in the EU but their views were simply shoved aside by a scornful Johnson.

He was succeeded by Liz Truss, enough said. Now comes Rishi Sunak, who, on paper, ought to be able to count on their blessing. Sunak, though, in his desire to make his own mark has embarked on policy U-turns that do not sit easily in boardrooms.

They’re not fans of where he is heading on climate change, dismayed at the lack of certainty and clarity; and business had come round to the idea of HS2, believing infrastructure improvements were hugely needed, conscious, too, of other countries possessing their own superfast transport services and fearing Britain was being left behind.

Sunak, though, in his desire to make his own mark has embarked on policy U-turns that do not sit easily in boardrooms

It’s more than that. While the ‘Prawn Cocktail 2.0’ offensive (in reference to the previous concerted wooing of the City and industry by Blair’s predecessor, John Smith) and the attendant banquets and photo-calls are the public face, away from the spotlight a more discreet, high-powered courtship is playing out. Labour is extremely close to a top-drawer consultancy which specialises in discreetly advising and devising strategies and solving problems for domestic and international major brands and business organisations.

Hakluyt is named after the Elizabethan geographer, Richard Hakluyt, and was created by a clutch of former MI6 officers at the end of the Cold War. Frightfully secretive at first, the agency has become more public-facing, listing ex-heads of multinationals, bankers and diplomats on its website. Today, it claims to service 40 per cent of the world’s biggest companies and 75 per cent of the top 20 private equity houses.

Among the bevy of corporate and Whitehall heavyweights on its payroll are names that are identifiably close to Labour, including Varun Chandra, the managing director who once assisted Tony Blair, Baroness Vadera, the former Labour minister and economic adviser to Brown, and Emily Benn, Tony Benn’s granddaughter who used to work for Jonathan Powell, Blair’s old chief of staff.

The word is that Starmer has asked them to facilitate private get-togethers with senior executives. Hakluyt is playing down the claim, issuing a statement of denial that it has the Party as a client to The National. Labour is not commenting.

It would make perfect sense for Labour to be using the consultancy – whether it is paying them is another matter. Unlikely, given Hakluyt operates at the highest end of the market and is known for commanding eye-watering fees.

Starmer is in regular contact with Blair, no slouch himself when it comes to advising and charging global businesses and governments for advice via his former Tony Blair Associates. Blair still has an extensive network and remains much admired and in heavy demand by the world’s corporate chiefs and political figures.

Also in close touch with Starmer is Peter Mandelson. Now Lord Mandelson, the former Labour spin doctor and branding mastermind is another to glide seamlessly between high-level politics and business. His consultancy, Global Counsel, advises businesses across the world. Like Hakluyt, Global Counsel does not publish its list of clients.

Business regarded Blair and Mandelson as acceptable faces of Labour, they know what it took to win over the sceptical suits. They spoke the right language and pressed the correct buttons but without entirely selling out their party. Hakluyt, with its Labour connections, is the same.

As time goes on, Starmer may be pleasantly surprised to find that increasingly he is not having to try that hard. Businesses like to back, and to be associated with, winners. It is a sign of how well Labour is doing that among the business community the party and its leader are now very popular indeed.

Next week: what can the Tories do, if anything, to recover their lost business crown?

Published: September 26, 2023, 11:58 AM