Labour is the party of work – and must become the natural party of business

Brendan Chilton
© Mick Harper /

Labour’s relationship with the business community over the past decade has been less than satisfactory. That much was evident in the description of some firms as “predators” under Ed Miliband and in polls showing that businesses were just as concerned about the prospect of a Labour government under Jeremy Corbyn as they were about Brexit. While businesses have supported the ideas behind Labour’s plans for improving infrastructure, they feared the tax burden and the risk to private investment.

Sir Keir Starmer has begun to transform Labour, and one of the most important areas where the party needs to make serious inroads is with the business community. Labour must become the natural party of business if it is to win again. It must demonstrate economic competence and an affiliation with those who strive to earn a living – in the private sector as well as the public sector. We need small business owners to feel at home within the labour movement, just as nurses and social workers do.

Covid-19 has highlighted the importance of family-run and family-owned businesses in the UK. Labour must be on their side as we start to recovery from the lockdown, but now is the time to turn on the engines of the British economy. Labour means work, not furlough. Labour means self-enterprise, not welfare. Labour should be at the forefront of returning people to work, boosting employment and helping our recovery.

Labour should oppose measures by the government to increase income tax and corporation tax. These measures will stifle the recovery and limit the spending power of individuals and business. Proposed tax increases at this precise moment would remove vital capacity from the recovery – creating unemployment, slow growth and deepening the recession we are already in. Labour could show it has moved back to the centre ground by supporting business and entrepreneurship.

Labour and the government need to focus on macroeconomic policies to expand the economy and create jobs. The UK is less productive, less competitive and exports less than many other comparable countries. This needs to change following Covid and Brexit. We don’t invest anywhere near as much as other countries such as Germany, our connectivity is poor and our infrastructure is falling behind in parts of the country. This should be an opportunity to renew the nation and recover from Covid.

The UK needs more investment and conditions where it is affordable to increase manufacturing and subsequently boost exports. At present, it is cheaper to produce goods in Germany, China or Vietnam than it is in the UK. Why is the British government content to allow other countries to get ahead of us on manufacturing? Surely, the patriotic and economically sensible thing to do would be to reduce the risk to our supply chains following Covid-19 and make more things here at home. This will require a more competitive exchange rate, increased investment and policies to drive down energy costs.

Labour should also take inspiration from Franklin D. Roosevelt’s New Deal, which helped to restore the American economy following the great depression. The great depression we are entering has been enforced by the state, and so the state has a responsibility to aid the recovery. Labour should consider redistributing wealth by cutting the pensions and salaries of higher earners in the public sector and creating new jobs in infrastructure and associated services. Labour should advocate a firmer approach to tax on multinationals that currently avoid paying tax, and maintain existing rates for smaller firms – or even reduce them.

Looking ahead, Covid-19 has transformed the way in which business operates. Remote working and virtual meetings are now the new norm. Flexible working hours and individual operations have been established. Traditional work models have been fundamentally altered. Workers, on the whole, enjoy flexible working. Labour must adapt with workers and make sure the future management of the economy is as flexible as possible, and ensures that new work freedoms can be enjoyed and maintained. Trade unions are going to need to find new ways of organising workers operating out of a common workplace.

Labour is, above all things, the party of work. Labour means work, and we should be at the forefront of encouraging the government to get workers back to where they belong – in work. Of course, it is important to continue to maintain the social distancing rules, but by working with the unions we can create safe conditions for employment to resume. It is vitally important for the welfare of workers that they are engaged in meaningful activity. Labour should not be seeking an extension to furlough, or the slowing of a return to normal, but should be encouraging a speedy return to work and prosperity.

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