RUTH SUNDERLAND: Tories hit by business blues

New Labor – remember them? – had their “shrimp cocktail offensive” when Gordon Brown and his acolytes successfully seduced the city ahead of the landslide victory of 1997.

As Shadow Chancellor Rachel Reeves looks ahead to 2023, her thoughts will be moving in the same direction. She and her boss, Sir Keir Starmer, join company executives. Reeves was spotted at the distinctly unsocialist Chelsea Flower Show, a magnet for corporate luminaries. We can expect these efforts to intensify this year.

Perceptions among the electorate of the two main parties and their competence to run the economy have changed since Boris Johnson won the 2019 election when Jeremy Corbyn and his hard-left sidekick John McDonnell were rejected by voters.

Starmer parades around and proudly declares to be pro-business. The party just before Christmas hosted a shindig for CEOs in Canary Wharf sponsored by none other than an agent of international capitalism than the banking giant HSBC.

The event was sold out, with a waiting list. The guests and keynote speakers included top figures such as John Allan of Tesco and Amanda Blanc of Aviva.

This should give the Tories food for thought. Corporate people closest to the party — the donors — usually come from a small subset of the commercial world — self-made entrepreneurs, hedge fund managers, or financiers who are not accountable to any board or shareholders. Leaders of large listed companies usually remain partisan in public for fear of violations.

The sympathy for Labor is a mix of pragmatism and frustration with the Tories over strikes, the Liz Truss debacle and lingering resentment over Brexit.

Leaving the EU, plus the Truss interlude – when the UK was given a ‘crazy bounty’ to cover the risks of political stupidity – have deterred foreign investors, they say.

There is an undercurrent among corporate leaders who feel ignored and belittled by the conservatives. It hardly matters whether all this is correct or fair. Perceptions have taken root in the absence of a strong counter-narrative.

Hunt is working on plans to grow growth faster than budget, as we explain below, but he will face intense skepticism.

We are told, as if it were fact, that Britain is a basket case, that we are doing much worse than comparable economies, and that our situation is extremely dire. It is nonsense. The UK is still the sixth largest economy, our financial sector remains a world leader, we have the huge advantage of the English language, robust property rights and the rule of law.

The Truss/Kwarteng mini-Budget must be put into perspective. There were no military coups, no riots, and the boring guys in suits were soon back in charge.

Rishi Sunak and Jeremy Hunt have stabilized nerves in the markets, but they need to do more. The pair looked powerless despite the spate of strikes over Christmas.

They have hit millions with higher taxes and have been unable to formulate a convincing vision of how they will revive the economy.

This has left a void for Labour. Reeves says she will make the UK the seed capital of the world, scrap corporate tariffs and create a new industrial strategy.

From a party so recently in the throes of Corbynites (who haven’t gone away) and still in a tight spot with the unions, this is perhaps beyond belief. Still, this story will get stronger in 2023 if the Tories don’t nip it in the bud.