‘Labour is still (only just) the party of business – here’s what it should do to keep bosses onside’

In 2024 when the Tories were in freefall, Keir Starmer proudly proclaimed Labour as “the natural party of business”. His Chancellor said Labour would be nothing less than “the most pro-business government this country has ever seen”. Many businesses were optimistic. 120 of them signed a letter affirming the party “wants to work with business to achieve the UK’s full economic potential”.

Yet, within a year, party conference events went from being described as “Davos on the Mersey” to “Dignitas on the Mersey”. Meanwhile, Farage’s Reform UK continues to conduct a charm offensive in the City that is picking up steam. Why has Labour so quickly lost the faith of the business community they worked so hard to gain? And more importantly for party strategists, how can they win it back before it’s too late?

New polling from Bradshaw Advisory’s first-of-its-kind UK Political Risk Report 2026 lifts the lid on the top concerns and challenges businesses face in the year ahead. And here’s the top message for SpAds in No.10: while you might take comfort in seeing Starmer remains – by and large – the top choice for bosses today, he’s on thin ice.

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Our polling of 500 director level business leaders reveals that in the past 12 months alone, over one in three businesses has suffered direct financial losses from u-turns and other signs of indecision.

The lead-up to the November budget seems to have been a key driver. Our research shows that 64% of business leaders thought the constant leaking and briefing created “undue uncertainty” for their businesses. Strategic sectors in tech, finance and infrastructure were hit the hardest.

Labour’s difficult first year appears to have ruptured the faith business leaders had in the government to turn the country round. A striking 83% of business leaders we surveyed said that business leaders don’t think the levels of political risk will improve under Labour for the rest of this parliament.

One in five tech leaders (20%) rank policy u-turns and unclear government communications as a‘major risk’ for their business. This is double that of the next highest sector. When you count u-turns around digital ID, the scrapped AI Bill and the national insurance increase this is no surprise.

Another top concern for business in  2026 revolves around fiscal and monetary policy. The consumer sector told us it feels particularly exposed in the short term. This is again unsurprising given the recent flip-flopping pubs and restaurants have faced around business rates.

We don’t know how the same business leaders voted in 2024, but we know that Labour can take some solace in the fact that they remain the most popular party. A total of 34% of respondents said they would vote for Labour if voting purely based on the interests of their business (made up by 24% of respondents who said they would vote for a Starmer-led Labour party and 10% of respondents who said they would vote for Labour with an alternative leader). This means Labour is the most popular party in our poll, just nipping ahead of Reform who would receive votes from 24% of our respondents.

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“Starmtroopers” can also take heart that there is no appetite for a leadership contest. Half of businesses (48%) believe a challenge to Sir Keir Starmer as Labour leader and Prime Minister would pose a serious risk to their business.

But patience is running out. Tech leaders are the most pro-Labour of any major sector: 37% say they would back a Starmer-led Labour Party if voting purely in the interests of their company.

Yet they are also the most alarmed about future political risk. Nearly half expect it to get worse in 2026. One in five rank policy reversals and unclear government communication as a top-tier threat: double the level seen in other sectors.

This is Labour’s paradox. The most politically aligned, optimistic and growth-oriented businesses are also the ones ringing the loudest alarm bells.

So what’s the answer? In recent months, many MPs and commentators argue that Labour is simply not communicating its successes properly.

Labour’s response has been to double down on signalling: more announcements, more reassurance, more statements of intent. But the data suggests that this approach is getting old – and the gap between promise and proof is widening. Our research notes key sectors like financial services continue to be concerned about the state’s capacity to deliver on policies such as the ‘Modern Industrial Strategy’.

Businesses do not need another declaration that Labour is “pro-growth”. They need fewer surprises, fewer reversals and fewer instances  where policy appears to exist in draft form for months on end. Instead of delivery, businesses see a torrent of rhetoric-fuelled announcements that don’t actually mean anything, blurred into one shiny press release that reads something like  “super-renewal-unlocked-boosting-missionled-growth-I-think-I’ve-got-a-cream-for-that”.

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If Labour wants to reset its relationship with business, it should stop treating bosses like temperamental voters. Develop policy based on consistency. Pick a small number of credibility tests and over deliver on them. For the tech sector, a good start could be taking a clear position on AI and copyright, or reforming business rates to improve the penalty on investment.

Delivery in a few difficult areas would do more to reduce political risk than more glossy announcements. The one thing that is clear from our polling is that 2026 has to be the year of delivery – or any remaining goodwill from businesses towards the party will be gone.

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