In the headwinds of a looming election, Keir Starmer’s Labour has been vying to place itself because the “natural party of business”. The proof this has paid off continues to mount. At October’s Labour Party Conference, a business discussion board for trade leaders reportedly has a 180-strong ready checklist. And this yr, there was a sequence of business figures – from the entrepreneur Gareth Quarry to the previous CBI president Paul Drechsler – who’ve publicly switched from the Conservatives to Labour.
Under Jeremy Corbyn’s management, the celebration was notoriously queasy concerning the non-public sector. One trade insider recollects senior Labour officers’ desire for participating with “small businesses” over “all businesses”, lest anybody assume the celebration was in any manner aligned with decidedly un-socialist multinationals.
Starmer has labored arduous to shed this picture. One key weapon in what has been dubbed the “scrambled egg offensive” – aka schmoozing businesses over breakfast, versus the New Labour penchant for networking over a prawn cocktail – is the shadow business and commerce secretary, Jonathan Reynolds. The 43-year-old, who was a councillor earlier than changing into MP for Stalybridge and Hyde, Greater Manchester, in 2010, doesn’t appear queasy concerning the non-public sector within the slightest.
There isn’t any business, in truth, that it will be inappropriate for Labour to schmooze. “Having a strong relationship with business doesn’t preclude you from criticising businesses when they do something you think is wrong,” he tells me once we meet at Portcullis House – thought not in his workplace which, his aide tells me, is “hot as the sun”. Engaging with corporations “actually… strengthens your ability” to typically criticise them, he provides.
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It is the primary week of parliament after summer season recess, and the scandal over crumbling concrete in faculties is the right image of austerity Britain. For Reynolds, a father of 4 with youngsters fortunately at faculties not on the at-risk checklist, there could also be only a trace of schadenfreude – however there may be additionally enthusiasm. The return to the Commons “feels like the season finale”, he says. And Reynolds is “really, really confident” in Labour’s plans for reaching the primary of the celebration’s 5 nationwide missions: to safe the best sustained development within the G7.
Reynolds and his shadow cupboard colleagues come to this problem at a time of financial disaster and nice change. While within the UK, Rishi Sunak has U-turned on web zero insurance policies, globally, the winds of progress are blowing in a really specific route: huge public funding within the inexperienced economic system. Labour’s reply to Bidenomics is its Green Prosperity Plan and the £28bn a yr that the shadow chancellor, Rachel Reeves, has pledged to sort out local weather change from the subsequent parliament if Labour wins the election.
In his blue shirt and matching purple cufflinks and tie, a tattoo of a Manchester bee peeking above one shirt-sleeve, Reynolds initiatives a type of reliability that appears very Brand Starmer. The non-public sector, on the entire, has warmed to him, an trade determine tells me. And certainly, in Starmer’s back-to-school reshuffle, Reynolds, whose former position was shadow secretary of business and industrial technique, was given further duty for commerce. Currently in his sixth shadow cupboard position, Reynolds’ previous portfolios included vitality and local weather, and work and pensions. The busy frontbencher additionally chairs Christians on the Left and is a vice-chair of Labour Friends of Israel.
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Mirroring Rishi Sunak’s February reshuffle, industrial technique, one thing Reynolds has lengthy banged the drum for, is now not the categorical focus of any authorities division. Where does industrial technique sit now?
[See also: Sunak’s net zero U-turn breaks with international opinion]
“It still sits with me,” he says, and industrial technique is “absolutely central” to the celebration’s financial plans. He and Starmer mentioned this throughout their reshuffle dialog, Reynolds provides: “He himself is a huge supporter of this, and we are going to be laying out some of the details as to how that would work.”
Some observers, together with celebration and trade insiders, be aware that it isn’t fully clear how Reynolds’ industrial technique coverage connects with the Green Prosperity Plan. The shadow business secretary appears eager to undertaking alignment, nevertheless. The shadow cupboard is “absolutely joined up”, he says, noting that Sarah Jones, newly shadow minister for trade and decarbonisation, can have “a foot in the net zero team”. He jogs my memory, too, that the celebration’s industrial technique doc, printed in September 2022, talked about “delivering clean power by 2030” as the primary of 4 priorities. This preceded Labour saying its second mission as that very intention.
Major Labour-affiliated commerce unions are sceptical over web zero’s promise of inexperienced jobs, whereas Labour has pledged to create one million “good new jobs” underneath the Green Prosperity Plan. Reynolds insists that “anyone trying to say there’s some sort of tension between jobs and ambition on net zero, it is plain wrong”, and he rejects the notion that there’s any “tension between those different portfolios in the shadow cabinet”.
A former parliamentary non-public secretary (PPS) for the shadow web zero and vitality secretary, Ed Miliband, Reynolds has “a huge amount of strong personal relationship with” him, he says.
“We talk all the time,” he provides, “about these two things coming together, and make sure when I’m being our voice to business we’re absolutely consistent in what we are saying.”
For Reynolds, web zero is “the biggest economic opportunity this country has ever had”, not solely due to these elusive “jobs of the future”. It can also be concerning the promise of decreased vitality costs, that are “a huge input cost” for businesses.
And Sunak’s recent change of route on web zero dangers this chance, Reynolds advised me by way of electronic mail after we spoke: “I meet with investors, with businesses every day who tell me Britain is losing out on jobs, wealth and opportunities because they don’t know what this government wants, and they don’t trust there will be any policy consistency.” Labour’s industrial technique, he added, would “offer a clear framework”.
The Conservatives, he factors out, have probably not had an industrial technique of their 13 years in energy. Greg Clark, the previous business, vitality and industrial technique secretary, “made an admirable start” however by no means had true backing from the federal government: “It didn’t go beyond the business department. I think he would probably say that explicitly himself.”
Under Labour, nevertheless, the Industrial Strategy Council could be a “statutory organisation like the OBR [Office for Budget Responsibility], like the Committee on Climate Change”. Such a physique would give “people some confidence that plans are not going to be changed in the short term”. Indeed, analysis by WPI Economics means that the dearth of an industrial technique on web zero might lose the UK economic system £224bn by 2050.
There is definitely a lot to be gleaned from Bidenomics on this entrance, regardless that Labour’s £28bn is dwarfed compared with the dimensions of US funding ($500bn in new spending and tax breaks, in line with McKinsey and Company). In April, the US nationwide safety adviser, Jake Sullivan, outlined the brand new method as a“ modern industrial and innovation strategy – both at home and with partners around the world”, a solution to the financial, geopolitical and ecological second.
Sullivan’s speech “was one of the genuine must-reads for anyone in the Western world interested in economic policy”, says Reynolds. Also noteworthy, the shadow secretary factors out, is that in Sullivan’s checklist of the US’s companions around the globe – listed as a result of “he’s rejecting the accusation of protectionism” – the UK was absent. “That is significant,” says Reynolds.
And painful, too, maybe, on condition that the month of Sullivan’s speech, Reynolds had advised the Observer that Labour could be the “most interventionist government for a generation”, and that voters had “yet to understand “the scale of Labour’s ambition on the economy”. But since then, I put it to him, voters could have understood one thing totally different. Labour’s message is certainly one of fiscal guidelines and frugality. A couple of days earlier than we spoke, Rachel Reeves was heckled on stage on the FT Weekend Festival after ruling out a wealth tax. What is the general public not seeing precisely?
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First, he clarifies the celebration’s place that “everything has to be subject to fiscal rules”. Second, he says, Labour doesn’t need the success of the Green Prosperity Plan measured “by how much we are spending, but by how much we are getting out of it”. But extra importantly, Reynolds is sceptical concerning the phrases of a debate that pits what he euphemistically phrases “reassurance and hope” towards one another.
“That’s a completely false way to look at it. You do not get the kind of transformational government this country needs unless you build on strong foundations,” says the shadow secretary. These embrace steady bond markets, a steady forex and a “government seen as credible in terms of its own spending plans”. And, for good measure, he provides, “I don’t think Labour governments should be judged by how much they spend.”
So, assuming there isn’t a new money, what can Labour do for businesses that doesn’t contain expenditure?
“The first ace up our sleeve is stability,” he says. “It doesn’t sound very glamorous but that is the number one request after the tumultuous 13 years that we have had.” The Industrial Strategy Council will get one other point out right here, as do: planning reform; modifications to the apprenticeship levy to channel underspend to the abilities system; plans for enhancing UK analysis and funding (“which we’ll now hand to Peter Kyle in the science and innovation department”); and, after all, “making Brexit work”.
Since our interview, Keir Starmer clarified that Labour will search to reset the UK’s Brexit deal if it wins the election, incomes each plaudits and accusations of delusion. Reynolds advised me that “we can improve the relationship” with the EU – “That’s Horizon [which the UK has since rejoined]; that’s the mutual recognition of professional qualifications; an SPS [sanitary and phytosanitary measures] agreement” – whereas Labour is “absolutely right to not talk about revisiting the single market or customs union”.
What would Labour do about post-Brexit customs checks, which the federal government has now delayed implementation of 5 occasions? Despite hypothesis that the postponement is said to inflationary pressures, Reynolds, says it “may be about how ready the system is to actually implement those checks should they wish to do so. I think there is a lot going on here.”
Labour would, he says, aspire to take away “the need for checks in areas where we don’t need them – so on food and agriculture, that’s the SPS agreement”. Otherwise, “If we’ve got the same standards in place and we have no desire to undercut those standards, I think there are things we can do to take those pressures out of the system, before we even need to think about how those checks would work.”
Numerous recent experiences have solid Labour’s pitch to be the pure celebration of business in a questionable mild. There has been criticism over HSBC and NatWest employees being seconded to Reynolds’ workforce, in addition to of senior Labour members accepting presents from corporations comparable to Google – together with tickets to Glastonbury value £3,377 for Reynolds and his spouse, whom he employs in his workplace on a part-time foundation (each of which he declared within the register of pursuits). According to OpenDemocracy, this reward preceded a Labour U-turn on the digital providers tax, which they’d beforehand known as to extend from 2 to 10 per cent.
Given Labour’s avowed dedication to a pro-business and pro-worker agenda, this might ship a combined message – or worse.
Reynolds doesn’t appear to assume so. “You can’t deliver for working people unless you’ve got that partnership with business,” he says, including that Labour’s “greater ambition on public investment” is that it’s going to leverage non-public funding, as a result of the state alone can’t ship what the UK economic system wants. While some “look at this in a binary way – can you be fighting for workers or for business? – it’s not actually how workers themselves look at it”, he says. The job might be on Labour to “articulate why that relationship is so important and why those two things go together”.
On Glastonbury, Reynolds refutes the suggestion that he U-turned following his go to to the competition, sticking to Labour’s clarification that the coverage was at all times supposed to be a “temporary measure”. In any case, he says, “Where we are developing policy we would also be talking to organisations like Google as major economic stakeholders in the UK. The idea that they’d have to take us anywhere to do that – I mean they would just come in here and talk to us.” The shadow cupboard certainly met with Google on the firm’s London HQ in June.
Reynolds admitted that “it’s nice to go to something like Glastonbury”, but in addition – and completely on model – mentioned it was great to see “a flagship creative event”, including it demonstrated the UK’s “deeply impressive” financial footprint, in addition to “how technology is changing how artists work, and what [it] means for things like competition issues”. He will get complaints, typically, for not participating sufficient with the artistic industries.
Fast ahead to the week of our assembly, and the temper is way much less jubilant than on Worthy Farm in June. Aside from crumbling faculties, Labour-run Birmingham council, the most important native authority in Europe, has issued a bit 114 discover. Moody’s, the credit score rankings company, has warned that extra councils are anticipated to fail.
The Conservative’s levelling-up agenda has not addressed this systemic failure, however presently the West Midlands and Greater Manchester, underneath the federal government’s Trailblazer offers, are set to retain business charges for a decade, as a pilot scheme. Reynolds wouldn’t verify whether or not Labour would proceed the coverage, saying that “there’s a complexity there around where business rates are retained”. In 2021, in truth, Reeves mentioned Labour would scrap business charges, changing them with “a fairer system”. The shadow business secretary wouldn’t present particulars on this both (work on the plan is “quite well developed”; week’s away from Labour Party Conference, the announcement will come at “the optimum moment”). Part of the coverage, he explains, might be about overcoming limitations to funding, one thing “greatly influenced” by what he has seen in his Greater Manchester constituency.
Of course, the point out of devolution and levelling up brings Reynolds again to his pet coverage space: industrial technique. Devolution to deal with the UK’s stagnant economic system, as proposed by the celebration underneath Gordon Brown’s Commission on the UK’s Future, is “entirely consistent” with this.
“Certain policy areas are best delivered on a devolved basis, and devolution of skills in Greater Manchester – my area – and to the West Midlands, are a good example of that,” he says.
In the lead-up to the election, a part of being Brand Starmer is making coverage calls underneath the “tough on spend” rubric. Among Starmer’s extra controversial choices has been the retention of the two-child profit restrict. This provoked fury inside the shadow cupboard. In his 2021 Labour Party Conference speech, Reynolds, then shadow work and pensions secretary, mentioned Labour’s plans included “binning the two-child limit”. Does he assume Starmer did the appropriate factor?
Like the remainder of Labour’s coverage agenda, Reynolds suits this neatly inside his “hope and reassurance” body. Labour is bold on tackling baby poverty, however “if Keir had said, ‘Oh yes, I promise we’ll get rid of the two-child limit on day one,’ the next question would be: well, what about the benefit cap? What about the bedroom tax? So much money was taken out of the social security budget since 2010 that there are no easy answers.”
And right here, he returns to Labour’s first nationwide mission: “People have gotten to grasp that until we are able to get this economic system working higher, there’ll at all times be actually tough coverage challenges.
“I think what we’ve set out, where we don’t make promises we can’t keep, and we don’t make promises unless we can say how we will address them, that is just how it’s got to be.”
[See also: Labour is right to strike a note of caution over HS2]
