How can Yvette Cooper and the Labour party reset their relationship with business?

Lauren Fedor
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Cooper vowed to work with business leaders from across the political spectrum
Labour leadership candidate Yvette Cooper caught the attention of the City yesterday when she said that she wanted to consign the party’s anti-business image to the scrapheap.

Distancing herself from Labour’s former leader Ed Miliband, who stepped down following the party’s severe defeat in the General Election, Cooper said Miliband had made a “mistake” by saying in 2011 that companies were either predators or producers.

“It sounded anti-business, anti-growth and, ultimately, anti-worker for the many people employed by large companies in the UK,” she said.

“We want all businesses to be responsible, to play by the rules and to work with them to build the economy of the future.

“Too often in the past our rhetoric undermined that positive relationship with business, and with the creation of jobs and wealth for the future,” Cooper added, saying, “Labour has to show we want to build businesses up, not knock them down.”

In a departure from Labour’s manifesto, Cooper, who is married to the former shadow chancellor of the exchequer, Ed Balls, said that Labour should drop its opposition to the previous government’s decision to lower the corporation tax to 20 per cent.

“We can’t be set against the government’s recent cut in corporation tax for the future,” she said. “Our rhetoric can’t be set against the wealth creators and drivers of our future economic growth. We can’t be set against business, and too many believed we were.”

Cooper, who has a post-graduate degree in economics, also vowed to work with business leaders from across the political spectrum, saying if elected party leader she would organise regular meetings with a business advisory group.

Cooper is one of four declared candidates standing for Labour leader. Liz Kendall, Mary Creagh and Andy Burnham have also put themselves forward for the top job, and the winner will be announced in September.

Like Cooper, Burnham said over the weekend that Labour needs to have a “pro-business approach” if it is to win future elections.

Cooper and Burnham’s comments came just one week after leading entrepreneur Lord Sugar announced that he was quitting the Labour party, as he was disillusioned with what he called “anti-enterprise concepts.”

“In the past year, I found myself losing confidence in the party due to their negative business policies and general anti-enterprise concepts they were considering if they were elected,” Lord Sugar said, adding that he voiced his concerns to “the most senior figures in the party several times.” 

“I signed on to New Labour in 1997, but more recently, particularly in relation to business, I sensed a policy shift moving back towards what Old Labour stood for,” he added.

However, Lord Sugar was far from the first high-profile party member to make such criticisms. Earlier this year, the socialist Fabian Society even argued that Labour needed a “new approach to business”, with positive rhetoric and a concerted effort to gain the trust of business owners.

One of the authors of the Fabian Society report, Ed Wallis, told City A.M. yesterday that many of his recommendations were still valid, even after the General Election.

“I think the main lesson we should take from the election is not that we shouldn’t be reformist or ambitious to change how the economy works, but that it needs to be done in partnership with the private sector, not in opposition to it,” Wallis said.

Business leaders contacted by City A.M. agreed that Labour needed to do more to build partnerships between the public and private sectors. Christian May, head of campaigns at the Institute of Directors told City A.M. that the group stood “ready and willing” to work with the Labour party despite many years of strained relations.

“We would be delighted that there’s such a newfound energy for making contact, but there is a risk that it could appear slightly hollow if there are members of the Labour party in the current leadership billing whose silence has been so noticeable in the last five years.”

Bill Grimsey, the former Iceland chief executive who advised Ed Miliband’s opposition on its policies towards the high street, told City A.M.that Cooper or any other leader must listen to business leaders over the next five years.

“If you don’t go and listen to your customers, to the people you’re trying to engage with, you’re not going to your product right,” Grimsey said. “And if you’re going to have a relationship with the business community, go and listen to their concerns, then shape your policies accordingly.

“Business people really enjoyed the Blair light touch regulation years and that sort of centre ground,” Grimsey said, adding that he thought the party lost its grip on business over the last ten years “under a torrent of noise that everything is the Labour party’s fault” as well as a lack of leadership from the Labour front bench.

“I think it’s an enormous uphill battle,” Grimsey told City A.M. of Labour’s task of rebuilding its relationship with businesses.

“It’s kind of like climbing Everest in a swimsuit without oxygen,” he added.

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