Jonathan Reynolds: “Labour is now a pro-business, pro-worker political party”

Jonathan Reynolds has declared that Labour’s relationship with business “hasn’t been as good as it should have been over the last decade” – but it is “now a pro-business, pro-worker political party“.

In a speech today at UK Finance, a trade association for the UK banking and financial services sector, Labour’s new Shadow Business Business and Industrial Strategy Secretary set out his ambitions in the role.

“Labour’s good relationship with business was once known as the ‘the prawn cocktail offensive’. Many of you have told me that in the last few years, you felt it was just plain ‘offensive’. I understand that,” Reynolds said.

But he went on to explain that Labour believes a party must have “a clear plan for making sure successful businesses are founded, and growing, in every part of the country” to be able to form a successful government.

“When I say that a future Labour government believes a strong relationship with business is essential, it’s not positioning, it’s not messaging, it’s not moving away from traditional Labour values of fairness and equality,” he said.

The Labour frontbencher also asserted that “being pro-business does not mean you’re for the status quo”. He said he was “not happy with our performance as a country” and described the state of the economy now as “alarming”.

“I think this country needs a significant change of direction to deliver the kind of living standards and public services we all rightly expect,” Reynolds told the Finance UK audience today.

“Growth is weak; productivity is appalling; inflation is high; poverty and inequality are rising; and for most workers the promise of rising wages post-Brexit has simply not happened.”

The speech by Reynolds aimed to set out “Labour’s priorities and promises to the business community”, “its offer to work with firms to achieve economic growth” and how its policies would be based on “security, prosperity, respect”.

Keir Starmer used a speech at the start of January to outline a new “contract with the British people” based on the three principles of “security”, “prosperity” and “respect”.

Below is the full text of the speech delivered by Jonathan Reynolds today on Labour’s partnership with business.

Good morning, and thank you all for making the time to come here today. There is a lot of talk at the moment about the government falling apart.

But, we know on our side, that the test of whether there is a Labour government after the next election, rests not on the dysfunction of the government, but on the positive agenda we will put forward.

That is what I want to talk to you about today. Can I thank you Bob for those kind words of introduction, and UK Finance for hosting us today. To be appointed as Labour’s Business Spokesperson is a job I have always wanted, and I intend to make the absolute most of it.

I loved my time working as the Shadow Economic Secretary and the relationships that I built doing that. But this job is also a personal one for me.

I’ve grown up and lived in the places that felt the big industrial changes of the 1980s and 90s. I’m talking about Sunderland, where I was born and went to school, and Tameside in Manchester, where I’ve lived my adult life and which I represent in parliament. 

But many of you are from or know places like these. I don’t like the phrase ‘Red Wall’, but there’s a reason that term has been so widely adopted. It encompasses an important feeling held by many. That they have lost out to industrial change. 

But whatever phrase you want to use, the challenge for any government in areas like Sunderland or Tameside or in any part of the country is how to create and keep good jobs in the area. How to build industries that will last into the future and succeed across the world. 

And I think that the personal experience and knowledge that I have is an asset in trying to do that.

Business needs, and deserves, a partner in government that can deliver those opportunities. That is not what we’re getting from the government at the moment. Where they have failed to show leadership, Labour is ready.

What I want to set out to you today are our plans for that partnership with business, the political economy a future Labour government would adopt, and why we believe these are essential to the next Labour government achieving its goals.

I want to start with a candid recognition that Labour’s relationship with business hasn’t been as good as it should have been over the last decade. 

Labour’s good relationship with business was once known as the ‘the prawn cocktail offensive’. Many of you have told me that in the last few years, you felt it was just plain ‘offensive’. I understand that. But let me tell you how I see things.

82% of all the jobs in this country are in the private sector. Unless any political party has a clear plan for making sure successful businesses are founded, and growing, in every part of the country, they won’t be a successful government.

At any time in the last 11 years that I have been an MP for, if anyone contacted me to say they might potentially be looking to bring jobs, growth and opportunities to my constituency, I would drop everything and try to make that happen.

My approach as Business Secretary would be no different on a national level to that local ambition. That’s what I mean when I say Labour is now a pro-business, pro-worker political party.

A real example of that approach by the way, can be found in the life and tributes paid to my late friend Jack Dromey. Jack was my pensions spokesperson when I shadowed the DWP.

Jack fought for good jobs and working conditions his whole life, but he was also a champion of British manufacturing, British engineering and British industry as a whole.

The most moving tributes to him came not just from the trade unions and the TUC, but also from trade bodies and business leaders. And we miss him a great deal.

Let me be clear, wanting businesses to succeed does not mean accepting, or cosying up to people nobody should want to get cosy to. I was a member of the Business Select Committee when we did an investigation into Sports Direct. It got a lot of attention at the time and rightly so.

I will never accept the exploitation or abuse of working people. But I know the vast majority of businesses don’t accept these things either. The overwhelming majority of successful businesses are successful because they care about their workforce, their customers, and the communities they are part of.

So when I say that a future Labour government believes a strong relationship with business is essential, it’s not positioning, it’s not messaging, it’s not moving away from traditional Labour values of fairness and equality – it’s a recognition of what is really required to deliver those values in practice.

But I also want to say something else. Which is that being pro-business does not mean you’re for the status quo. That somehow you don’t have ambitions to change things, to shake things up. 

I’m not happy with our performance as a country. Far from it. I think this country needs a significant change of direction to deliver the kind of living standards and public services we all rightly expect.

The state of the economy, right now, under the Conservatives is as alarming as it possibly could be. Almost every economic indicator is heading in the wrong direction.

Growth is weak; productivity is appalling; inflation is high; poverty and inequality are rising; and for most workers the promise of rising wages post-Brexit has simply not happened.

The only way to higher wages is better productivity. It was facile of the government to believe it could get there simply by restricting freedom of movement. We’ve left the single market, increasing costs for a lot of UK businesses, with very little compensating benefits at all.

And we can’t move on as quickly as we should, because the government claims it didn’t understand what its own deal meant for Northern Ireland.

And in response to these significant issues, the Prime Minister doesn’t even feel the need to do some basic preparation before he makes a keynote speech to the CBI.

So the status quo should satisfy nobody. I believe the UK needs big reforms to turn this position around. And my offer to businesses is work with us on this reform agenda to do exactly that.

Thanks to my colleagues in the shadow cabinet, we have already started this work.

Firstly, Rachel Reeves’ pledge to replace business rates not only means a fairer split between bricks and clicks, but that we will use the proceeds from an increase in the Digital Services Tax, and then the global minimum corporation tax agreement, to make business taxation fairer, more transparent, and more supportive of investment and entrepreneurship.

This is especially true for smaller businesses, of which more will be exempt entirely due to our proposed rise in the threshold for small business rates relief.

Secondly, our climate investment pledge means we can offer to partner with businesses to deliver net zero. 

A great example of this is our plan for green steel, where we would provide the capital investment to make steel produced in the UK greener and more competitive with the rest of the world.

This to me is what sound industrial policy looks like. Not picking winners, but the public and private sectors working together to meet clear public policy objectives in a transparent, cost-effective way.

This is the political economy a Labour government would operate.

My aspiration is that the next Labour manifesto will be packed with pledges on science, investment, rates reform, skills, and infrastructure that will provide the foundation for a new era of prosperity and national success.

And that means taking a longer view than just one parliament or election cycle. It means embedding a new consensus in our law and corporate governance that ensures businesses have the certainty they need to invest for the long term.

That means bringing back an Industrial Strategy, and giving it a solid, statutory, institutional footing so businesses know the fundamentals will continue from one government to the next.

It means increasing R&D spend to 3% of GDP over a parliament. And it means ensuring the balance is right between returning value to shareholders and businesses being able to invest for long term success.

To conclude, I believe the view of business I’ve just outlined is rooted in Labour’s values, and I believe those values are shared by business. 

At the start of the year Keir laid out his contract with the British people, based on: security, prosperity, respect. Business provides security for individuals and families and the communities they are part of. Business generates prosperity, and it could generate a lot more with a better government. That’s why you, and the people you employ, will always have my respect.

Already, in the first few weeks of this job, I’ve been able to get out and see some incredible things we are doing in the UK. Electric cars in Sunderland, new innovative glass products in St Helens, Hydrogen being made in Sheffield. Things that are truly world class, and genuinely exciting for the future.

With success like that, there is no reason why the UK should be looking at forecasts of anaemic growth, poor productivity, and ever higher taxes on working people.

I believe we can do better. And our best days are ahead of us. And I look forward to our partnership to make that happen.

Thank you.