Why have business leaders.turned away from Labour?

Before the election in July, Labour leaders launched a drive to woo business in what became known as the “smoked salmon and scrambled egg offensive”.

- ANDREW GRICE

Labour promised the stability the business world craved after seeing five prime ministers in the past eight years of Conservative rule. It pledged to be both “pro-business and proworker” and to prioritise economic growth.

The campaign paid off when Sir Keir Starmer’s party won the backing of 121 company executives, who said in a joint letter: “Labour has shown it has changed and wants to work with business to achieve the UK’s full economic potential. We should now give it the chance to change the country and lead Britain into the future.”

This was in stark contrast to some previous elections, when industry figures had warned about the dangers of a Labour government.

Why has the relationship turned sour?

Business leaders believed incoming Labour ministers overdid the “doom and gloom” about the UK economy as they tried to blame their rotten fiscal inheritance on their Tory predecessors. This appeared to harm business and consumer confidence. Some bosses felt Labour’s package of enhanced workers’ rights went too far and would impose high costs on firms.