Businesses heading to Labour’s Liverpool conference next week will urge the government to avoid another tax raid on companies at the next Budget and put party infighting to one side.
After Labour’s painful first year in government, marked by what companies said was a tax-grabbing Budget that betrayed its pro-business claims, executives are using the party’s conference to ensure mistakes do not happen again in November.
“There will be lots of “please don’t tax us or we’ll have to fire people and pull investment’,” said one public affairs executive. Another said the government would be warned it risked increasing living costs and damaging growth if more charges were heaped on business. It would also be told to “get on with simplifying regulation and stop doing things that keep pushing up costs”, the second public affairs executive said.
“Our message is there can be no more taxes on businesses and our members will be looking for reassurance on this over conference,” said Shevaun Haviland, director-general of the British Chambers of Commerce. “Businesses want to see more on infrastructure, more on helping people back to work and a tax system that incentivises growth”.
Tom Lees, founder and chief executive of Bradshaw Advisory, said business leaders were aware they “provided a juicy and politically easier target than . . . welfare reform or pensioner benefits, given the unsettled Labour backbenches.”
With the growing threat of a leadership battle after just over a year in power, businesses have been alarmed that Labour risks jettisoning its promises of political stability. Greater Manchester mayor Andy Burnham this week launched a thinly veiled bid to replace Sir Keir Starmer as leader, with his borrowing plans sparking warnings from the bond markets.
Steve Rigby, chief executive of the technology-focused Rigby Group, one of the UK’s largest private businesses, said: “I’m really concerned we are falling back into the Tory pattern of thinking that rotating prime ministers is the way to fix the issues in society.
“The biggest thing that Labour could do for business is to get control of the party . . . because it has an impact on markets, the cost of private debt and our confidence. They are in power for the next four years and to change to Burnham would be completely inappropriate.
“In no business would you change chief executives in the same way the government rattles through business ministers,” he added.
A major government reshuffle this month, where not only the business secretary Jonathan Reynolds but all junior ministers and special advisers in the department were replaced, had exasperated business chiefs and lobbyists.
“People are still baffled by the reshuffle,” one public affairs executive said.
Chief executives attending this year’s business day on Monday include Simon Roberts of Sainsbury’s, NatWest’s Paul Thwaite, Centrica’s Chris O’Shea and Octopus Energy’s Greg Jackson. The heads of the UK’s biggest business lobby groups are all attending — only junior officials were sent to Reform UK’s recent conference.
One chief executive said he was going because “the government is trying to engage. But whether they will start listening and doing is another matter. We know all the headwinds”.
The day will start with a breakfast hosted by new business secretary Peter Kyle. They will also attend an interview with Starmer and have a seat at Chancellor Rachel Reeves’ speech.
The £5,000 cost excluding VAT to attend — up from £3,000 last year — has been criticised as “ludicrous” by several business leaders. But the day now features roundtable discussions with ministers after last year’s event was widely criticised for a lack of interaction, with delegates watching Reeves’ speech via a screen in a windowless room.
Despite gloom and frustration in retail and hospitality, other executives highlighted recent trade deals including with the US and India, and the approval of infrastructure projects including the Sizewell C nuclear project and Gatwick’s second runway.
Government aides have argued that City businesses are supportive of the chancellor’s Leeds Reforms in financial services, announced in July, and inclusion of the sector in the government’s Industrial Strategy. However, bankers have also been privately urging Reeves to not raise taxes.
“We’re saying that if you want capital for lending to businesses and customers then don’t squeeze us when we already pay higher rates than our international peers”, one banking executive said. Barclays chief executive CS Venkatakrishnan warned this month against higher bank taxes and urged the government to curb spending.
Many business leaders are hoping the chancellor uses her speech to signal that she demands the same efficiencies from government departments as companies are being forced to make.
O’Shea, the CEO of Centrica, which is investing alongside the government in Sizewell C, said that while the “government has not been perfect, I have been impressed with what I have seen”, adding: “Maybe with their majority they could have been more sure-footed and quicker on decisions. But businesses do not have to consider all the other factors and councils and departments that the government does”.
He said he was only concerned about leadership speculation “if it causes the government to slow down. Otherwise it’s just noise and doesn’t make a difference to my business”.
Rain Newton-Smith, CBI chief executive, said businesses wanted to see “delivery, delivery and delivery on infrastructure” and a signal to investors that “the UK is open for business”.
A Labour party spokesperson said: “The last Tory government trashed the economy and left Labour with the urgent task of repairing the public finances.
“This Labour government is pro-business and is laser focused on growth. Our efforts to stabilise the economy has seen five interest rate cuts, the fastest growth in the G7 in the first half of the year, and three historic trade deals secured — benefiting exporters and businesses across the UK.”
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