Long ago, almost forgotten in the mists of time – well, last year – 121 company chiefs signed a public letter endorsing Labour as the best party for business.
Even the billionaire class came out for Keir Starmer and Rachel Reeves, in the form of Sir Jim Ratcliffe, owner of the petrochemical giant Ineos, and the erstwhile Conservative donor John Caudwell, founder of Phones 4U.
It was unprecedented – and unprecedentedly foolish. Or maybe not, in the sense that by then it was obvious to all that Labour were going to win the election, and these tycoons might have thought it would do them good to get cosy with the next occupants of Nos 10 and 11 Downing Street.
In February last year, I warned in the Daily Mail about what I termed ‘big business sucking up to Labour’ – and that the party’s policies meant the next gurgling sound we’d hear would be ‘jobs going down the plughole’.
So it has come to pass. The effect of Rachel Reeves’ first Budget, with its swingeing £40 billion increase in employers’ national insurance contributions, is already estimated to have cost around 125,000 jobs.
Businessmen who backed Labour might claim, in their defence, that this was in shocking contravention of Labour’s manifesto promise not to increase national insurance, a breach Reeves justified by inventing a ‘£22 billion black hole’ kept secret by the wicked Tories.
And when, during the election, the then PM Rishi Sunak warned Labour would increase taxes, Starmer furiously described this as ‘garbage’.
‘John Caudwell, founder of Phones 4U, a man of epic vanity, refuses to admit he’d made a mistake’
In private meetings with the business leaders they were wooing, Reeves and Starmer were, I’m told, even more emphatic about how they would not increase the tax burden. And these dupes wanted to believe Starmer was a sort of latter-day Tony Blair – which Sir Keir played up to by hailing Margaret Thatcher for ‘letting loose our natural entrepreneurialism’.
In fact Starmer is to entrepreneurs what dry rot is to masonry: witness the record-breaking numbers of such people leaving the country – the richest being the steel tycoon Lakshmi Mittal.
Anyway, what do those businessmen now say; those who backed Labour, signed that letter and attempted to induce others to vote likewise? Who put their names to this: ‘We hope by taking this public stand we might persuade others.’
Last December, the financial newspaper City AM contacted all the 121 signatories. Only 28 of them were prepared to repeat their support for Labour. One of the signatories said they had felt ‘duped’: ‘I signed it, I was asked twice to sign it and I do feel stupid. We were lied to on that, they said they were pro-business,’ Another of the signatories, the chef and restaurateur Tom Kerridge, said the ‘jobs tax’ was ‘catastrophic’ for his industry.
No former Conservative-backing businessman had been more effusive in his switch to Labour than the head of Iceland, Richard Walker. He’d been affronted when Sunak ignored his plea to be made a Conservative parliamentary candidate, and went so far in the opposite direction as to appear in a Labour Party election broadcast.
Later he pleaded, ahead of Reeves’s first Budget: ‘Don’t squeeze businesses like a lemon, with eye-popping tax increases.’ Of course she ignored him.
Now the attention-seeking Walker has gone unusually quiet, though a few months ago, he lamented Labour’s ‘family farm tax’ – ‘it has parked its tractor in the wrong place.’
And what of those billionaires? John Caudwell, a man of epic vanity, refuses to admit he’d made a mistake, while moaning that Labour was ‘lacking where it matters most… falling short on one of the most critical tests of modern leadership: making Britain appear open, competitive and business friendly’.
‘In private meetings with the business leaders they were wooing, Reeves (pictured) and Starmer were, I’m told, even more emphatic about how they would not increase the tax burden’
He also observed: ‘Ultra-high net worth individuals are leaving the UK in droves.’
In fact Jim Ratcliffe was already tax-domiciled in Monaco when he publicly endorsed Labour at the outset of the general election campaign: ‘I like Keir. I think he’ll do a very sensible job.’
But now, as Ed Miliband’s policies have wrought havoc on oil and gas businesses in the UK, Ineos closed its Grangemouth refinery and declared: ‘Current government policy is squandering [the North Sea legacy]. There are 200,000 jobs in the UK associated with oil and gas, and they are all at risk unless the government changes course.’
I’ve less sympathy with Ratcliffe than with those ‘duped’ by Rachel Reeves’ promise that Labour would be ‘the most pro-business government the country has ever seen’.
I mocked it at the time, but I accept that even successful businessmen can be shockingly naive about politics.
Yet Labour’s plans to wind down the North Sea oil and gas industry, banning all new exploration drilling, were actually in its manifesto. It’s one thing to complain about Labour breaking its manifesto commitments (on tax), quite another to whine when they do what they told you they would do.
Nowhere is this clearer than with the Employment Rights Bill, the so-called ‘flagship legislation’ now being held up in the House of Lords. It was the main project of Angela Rayner, but her departure from the government over underpayment of taxes has not weakened Starmer’s resolve to get this on to the statute book.
‘I’ve less sympathy with Ratcliffe than with those ‘duped’ by Rachel Reeves’ promise that Labour would be “the most pro-business government the country has ever seen”‘
It is nothing other than the wish list of Labour’s foremost funders, the trade unions, and among other things, scraps the obligation for 50 per cent of members to take part in strike ballots for industrial action to be permitted.
The most damaging element of its 330 pages of red tape is giving the right to sue for unfair dismissal from day one. Even across Northern Europe, there is a six-month period before workers can sue, and the Tony Blair Institute described Labour’s proposal as ‘extreme’.
Now the cross-benchers have joined the Conservatives in the Lords to try to amend the Bill, rightly convinced that it will lead to less hiring of untested workers and add to the growing curse of youth unemployment.
Yet Labour can simply point out it was all in their manifesto, which committed to ‘introducing basic rights from day one to parental leave, sick pay, and protection from unfair dismissal’.
Did those 121 company bosses who backed Labour at the last election, and who sought ‘by taking a public stand, to persuade others’, actually read the manifesto they endorsed? Or did Keir Starmer and Rachel Reeves give them a quiet private nod and a wink that this was just to keep the unions happy, and that it would be watered down?
Whatever the case, it’s not those duped or opportunistic business leaders I have sympathy for, but the people who are paying the highest price for Labour’s broken promises. I mean those who have lost their jobs, and the entirety of British taxpayers – including the millions who believed Keir Starmer when he described as ‘garbage’ the very idea that he would increase the fiscal burden on their shoulders.
In the Budget this Wednesday, that burden will be made still heavier. At the weekend, Rachel Reeves, asked about the justification of the election pledge not to ‘increase taxes on working people’, blithely remarked: ‘There’s no point in rerunning everything.’
There are a lot of businesspeople wishing they could rerun their endorsement of Labour. If only more of them had the honesty to admit it.