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The canapes and white wine will be packed away. The wooing of the business lobbyists will come to an end. The cosy dinners with Sir Keir Starmer and Sir Tony Blair for select donors will be consigned to the past, and there will be no more polite requests to sign public letters of support for its policies.
With a huge majority secured at the general election, and with power secured for at least five years, business is about to see the real Labour Party unleashed. From higher taxes, to a blizzard of regulations, to an avalanche of legal action, companies will be under siege – and they will have to start working out how they can fight back very quickly.
Over the last few months, business leaders may have been relentlessly courted by Labour. Billionaires such as Sir Jim Ratcliffe and John Caudwell were persuaded to switch their support to the party, reassuring voters. A series of City leaders, such as Sir Douglas Flint, the chairman of Abrdn, and Sir John Kingman, the chairman of Legal & General, were persuaded to join “advisory councils”, and even a few entrepreneurs were cobbled together to sign a letter of endorsement for the party.
Here’s the problem. With a huge majority, even if it was secured on a share of the vote that was lower than that which Jeremy Corbyn won in 2017, the new government does not need them any more. Business is about to find out what the new administration really has in store for them.
It is going to be a very rough ride. We are likely to see a huge increase in employment rights, with protection offered from the first day on the job, a clampdown on zero-hour contracts, plus extra powers for the trade unions. Even though business is already suffering from a crisis of productivity, work will become less flexible, and it will be harder than ever to get rid of someone who is not pulling their weight.
We should expect to see a huge increase in regulations, with extra powers awarded to quangos, and a drive to “align” with rules set in Brussels, even when businesses don’t want them, and regardless of whether they are in the interest of the UK. In a moment of what may have been self-parody, the Labour Party even announced a “Regulatory Innovation Office”, a kind of meta-quango overseeing all the other rule makers it plans to create. That will be typical of how it plans to rule.
We will see a whole new raft of diversity and inclusion legislation. It may well be perfectly commendable in itself, but it is already clear that it will trigger endless waves of legal action against companies for any possible infringement of individual rights, including plenty of class actions. The law firms will already be gearing up for a bonanza as they pick fight after fight, but it will be companies that eventually have to pay the bill.
We are set to see what will amount to forced investment in a series of “partnerships” with business. The asset managers may find they are strong-armed into putting pension money into “infrastructure” – which in reality is often just day-to-day spending with a fancy label – as well as “green energy” projects. Whether any of them make commercial sense or can earn a meaningful return could be brushed aside.
On top of all that, doubling down on net zero targets, and an obsession with the UK’s “global leadership” in the fight against climate change even though we only account for 1pc of worldwide emissions, will mean huge extra costs for industry.
We already have some of the most expensive power in the world, but costs will rise still higher, the security of supply will be weakened, and we may well see more stringent quotas of cars and vans introduced as manufacturers struggle to avoid fines for not selling enough electric vehicles that no one wants.
The list goes on and on. It is going to be a brutal five years for businesses. Over the next few weeks, companies will have to figure out ways of standing up to the onslaught heading their way. They will have to be prepared to relocate, with plans in place to shift their headquarters overseas, and perhaps production facilities as well. They will have to make sure ministers are aware of that, and hope that the threat is enough to moderate some of the wilder proposals.
They will have to be prepared to negotiate hard, refusing to join any of the “partnerships” or “investment drives” the new government may well launch as part of what will increasingly be a “planned economy” unless there are concessions elsewhere.
And, perhaps most of all, the corporate sector should engage in its own form of “lawfare”, turning the hugely increased power of the courts against its architects. Every piece of employment legislation, or new regulation, should be taken to judicial review, on to the Supreme Court, and then the European Court of Human Rights, to delay it as long as possible. Whatever his other faults, Sir Keir is a lawyer to his fingertips, and will respect the process. If nothing else, it will be amusing to watch Labour get tied up in the same legal maze it has trapped everyone else in for the last 20 years.
The new Government will talk endlessly about growth. It will stage lots of summits, and launch plenty of task forces and initiatives. And yet the charm offensive is now clearly over, and the business leaders, lobby groups, and trade associations that helped propel the party into power can’t expect any special treatment.
In reality, this will be the most anti-business, anti-enterprise government the UK has seen since the 1970s, and perhaps even since the 1940s. It is going to be a hostile environment for anyone who wants to grow a business. In small ways, the private sector will have to find ways of fighting back against that – but no one should kid themselves that the next five years won’t be very difficult, and the UK will be a very hard place to run a successful company.
Britain is about to discover just how dangerous Labour really is
Sir Keir Starmer will oversee a doubling down on quangos and regulation