Cobra beer magnate Lord Bilimoria says Labor has let its business down

New Year, new job for Lord Bilimoria, who came to Britain from India as a teenager, started the Cobra beer empire from a flat in Fulham in his twenties and rose to the top of the business world.

On January 1, Karan Bilimoria became British president of the International Chambers of Commerce (ICC) – at a crucial moment when Donald Trump is threatening to impose tariffs and blow apart the free trade ideology that has prevailed for decades.

But Bilimoria also has his work closer to home, where he says Labour’s tax increases are stifling entrepreneurship and ministers are refusing to listen to business.

After courting businesspeople in the run-up to the election, have Rachel Reeves and Keir Starmer now betrayed them?

‘I feel – the business community feels – let down by this Labor government. We are disappointed. And above all we have the feeling that we are not being listened to,” he says. ‘As chairman of the CBI, I saw the power of government and business working together.

“I beg them – please cooperate with us. Then we can grow the economy. The latest data shows that we are not doing that. We may be heading for a recession.’

Bilimoria, 63, knows the chancellor and the prime minister and has dealt with them regularly at the Confederation of British Industry between 2020 and last summer.

“I thought they were very decent, well-meaning individuals who said they wanted to promote business and entrepreneurship. But I’m sorry to say that they’ve been in government since July, and what’s happening? They started by upsetting pensioners, then they upset farmers, then they upset family businesses, and then they upset every employer by setting up National Insurance.

‘Then there will be employment rules that will cost around £5 billion and will make us less competitive. It’s one thing after another.

‘I’m sorry to say that a lot of the blame lies with the previous government, in particular Rishi Sunak. When he was Chancellor, I kept telling him: ‘don’t impose taxes’. If you do, you undermine the recovery. What is he doing? He is going to increase corporate tax from 19 to 25 percent – ​​a big mistake.”

But Labour, he says, is ‘making it worse’. He has little patience for Reeves’ claims that she was forced to raise taxes because of a £22bn-a-year black hole in the public finances that she claims was left by the Conservatives.

“The black hole – please don’t get me started on the black hole. Put it in the context of an economy that turns over £2.7 trillion a year and you blame everything on £22 billion and use that as an excuse?’

Bilimoria came to Britain from India at the age of 19 to study, and founded Cobra in that south-west London flat in 1990 with £20,000 in debt. He says, “I had that dream and I’m proud to have created a household brand.” He recently stepped back from the company, whose beer is a staple in curry houses across the UK.

‘It’s amazing that everyone in all corners of the country knows Cobra. We all love going to Indian restaurants. It’s part of our way of life,” he says. But do Labour’s changes to inheritance tax pose a threat to curry houses, most of which are family affairs?

They are, he says, ‘very damaging to any family business’, even if curry houses ‘somehow’ survive everything thrown at them. ‘But we shouldn’t put them in that position. We should celebrate them and not hinder them.’

When he arrived in Britain in the 1980s, entrepreneurship was “not celebrated at all”, he says. “It was seen as something for used car salesmen and Del Boys.”

He credits Margaret Thatcher for making it socially acceptable.

Interestingly, however, he says the Blair-Brown government was the most business-friendly government, citing capital gains tax relief for entrepreneurs, which makes his criticism of the current Labor government all the more telling.

His rise to the top was not smooth sailing. Cobra overextended itself and transitioned into a ‘pre-pack administration’ during the 2009 crisis.

Bilimoria bought the company back in a joint venture with North American brewer Molson Coors.

These types of deals have had bad publicity because they allowed entrepreneurs to pay off their debts.

Bilimoria says he has settled with 99 percent of creditors, while the rest owe such small amounts that it is impractical to try to pay them back. Bilimoria was given a life peerage in 2006, is an obstructionist in the House of Lords and was the first person from an ethnic minority to become president of the CBI.

The CBI sex and drugs scandal in 2023 “was terrible,” he says, adding: “Luckily I was still on the board, so I was able to help save the organization. The CBI is active again. There’s still a little way to go, but it’s almost there.’

His excitement about his new job at the ICC is evident.

“It is the largest business organization in the world, representing five million companies and employing a billion people in seventy countries,” he says, listing the statistics. ‘We are the only business body with a seat at the United Nations and the World Trade Organization.

“I’m going to be in this role with Donald Trump as president, so there will be a lot of very interesting issues coming up around trade and tariffs on top of that.”

What would be on his New Year’s wish list? Reforming business rates, which he says are the highest in Europe in Britain. He adds: “I would increase our investment in research, development and innovation. We invest 1.7 percent of GDP, compared to America’s 3.2 percent.’

He would give companies incentives and help them export, and set up ‘a clear industrial strategy’.

He is staunchly anti-Brexit and says that ‘companies would benefit from a much closer working relationship with the European Union’.

Cutting corporate tax, which has been levied by the Conservatives, is another step he would take.

‘This government had a majority of 170 seats, so they had the opportunity to be bold and cut taxes, as long as they did it sensibly – not in the Liz Truss way – but in conjunction with business.

“You cannot create growth by raising taxes and creating an environment that does not attract investment. It is private sector growth that creates the jobs that pay the taxes to fund the public sector. If you kill the goose that lays the golden egg, it’s done.’