Back in the 2019 elections, British politics was a different scene altogether. The party leaders were poles apart in their ideology, and neither paid significant attention to the business community.
This time around is different. Rishi Sunak and Sir Keir Starmer are aiming to show they’re the true ‘party of business’. While both leaders believe that their party deserves this title, their definitions of being business-friendly couldn’t be more different, revealing their underlying ideological assumptions. It’s not as diametrically opposed as those of Johnson and Corbyn, but these assumptions are still quite different and very important.
Here's a snapshot of what they’ve said... In 2022, Rishi Sunak told the CBI:
“But more important than what government does is what you do. It’s private sector innovations that really drive growth.”
Meanwhile in 2023, Keir Starmer took a different approach at his party’s conference, stating in front of business leaders:
“If we do come into government, you will be coming into government with us.”
For Rishi Sunak and the Conservatives, supporting business means stepping back and letting businesses do their thing with minimal government interference, supply-side interventions, and creating the favourable conditions to let them thrive with less red tape. This hands-off approach explains the party’s reluctance to “pick winners” or set a national industrial strategy over the last 14 years. Rishi Sunak’s enthusiasm for initiatives like investment zones and freeports--areas with reduced regulations and taxes--stems from a belief that such measures will enable the private sector to deliver growth. The criticism of this approach from some businesses is that it hasn’t provided the longer-term certainty and policy stability that we sometimes see in a number of the UK’s major competitors.
On the other hand, Sir Keir Starmer and Labour, see it as a partnership. They’re all about the government and businesses locking arms in a strong and formal cooperation. Their strategy involves the government actively making interventions to direct investment and capital towards national priorities. Labour’s commitment to an industrial strategy outlines specific sectors and infrastructures they believe should attract private finance. The possible issue with this approach might be businesses having to accept a degree of potential government activism and intervention that we haven’t had for some time in the UK.
Understanding these principles gives us a clear picture of how each leader would engage with businesses if they came to power. These approaches also significantly influence their strategies for economic growth.
As the election approaches, businesses should stay informed about these developments. The future relationship between government and industry hangs in the balance, and the choices made at the polls will influence the economic landscape for years to come.
You can read our key recommendations for the next government and how they should engage with the financial and related professional services industry in our manifesto - Financing Britain's future: TheCityUK's manifesto for the next government.
