September 26, 2018 / 9:34 AM / 21 days ago

On charm offensive, Britain's Labour tells business: 'Work with us'

LIVERPOOL, England (Reuters) - Britain’s opposition Labour Party is wooing business bosses even as it unveils a raft of radical economic policies, determined to thaw a sometimes frosty response to its plans to give more power to the workers.

Britain's shadow Chancellor of the Exchequer John McDonnell speaks at a Momentum 'The World Transformed' event during during the annual Labour Party Conference in Liverpool, Britain, September 25, 2018. REUTERS/Hannah McKay

“Engage with Labour, work with us,” was the message from Labour’s envoy for financial services to businessmen and women at a business drinks reception at the party’s annual conference.

With Brexit negotiations at an impasse and Prime Minister Theresa May’s future uncertain, Labour and business — at times uneasy bedfellows since veteran leftist Jeremy Corbyn was elected leader in 2015 — are taking more notice of each other.

Alongside its conference in the northern city of Liverpool, Labour has run a business forum attended by more than 100 business people, including representatives from major investment banks, seeking to shape the party’s business pitch.

“We take huge pride in the UK being a global financial centre, there will always be a seat at the table for the finance sector with us,” Labour’s financial services spokesman Jonathan Reynolds told the business drinks event.

“Remember the Labour Party now counts a membership in the hundreds of thousands,” he added. “Discussions that are being had here at conference ... will have a relevance for the economy and for your businesses going forward.”

Hours earlier, Labour’s would-be finance minister John McDonnell set out plans to “shift the balance of power” to ordinary people with policies including nationalising key industries, putting workers on boards and handing employees up to 10 percent of company shares.

Labour has also said that in government it will raise corporation tax, increase income tax for the highly paid and introduce a financial transaction tax, hoping to break with policies it says were responsible for the 2008 financial crisis.

“The concern that arises for so many businesses is that when they hear the tone and content of the speeches in the conference hall, there is a chilling effect,” Adam Marshall, director general of the British Chambers of Commerce, told Reuters.

“It is a litany of things one after the other that really just sets an unhelpful tone,” said Marshall, whose organisation represents 75,000 companies employing nearly six million people, calling on Labour to do more to allay business concerns about the impacts of some of their policy proposals.

ON THE BOARDROOM AGENDA

But after Labour’s plan to end austerity and borrow to invest in public services captured the imagination of voters at a snap election last year, reducing May to a minority government, business has no option but to engage.

Labour said the exhibition zone at conference, which features businesses including tech firm Google, transport manufacturer Bombardier and oil company BP, was the largest and most lucrative it has been since Corbyn became leader.

Of 165 stands, 22 are new exhibitors. There is a also a small business zone with six exhibitors.

“We are definitely seeing an increase in interest from clients preparing, contingency planning, for a Labour government, particularly in financial services,” said one attendee at the business drinks, who worked for a business advisory firm. “It is on the boardroom agenda.”

May’s Conservatives have traditionally considered themselves the party of business, advocating free markets and lower taxes, but relations between government and business have been strained by worries over the impact leaving the EU will have on business.

Over the summer, then foreign secretary Boris Johnson was quoted by a newspaper brusquely dismissing business leaders’ concerns about Brexit.

“They are clearly opening up a space for us and we have got to grab it with both hands and make the most of the opportunity,” Labour’s small business spokesman Bill Esterson told an event at the conference.

Esterson said that while there would be things Labour did which the business community disagreed with, he got a good response from businesses for many of its policies and the party was encouraging its local groups to appoint business officers to help get their message out.

“To get into government I would argue that we need the support of the business community,” he said.

“We have got representatives from businesses large and small from all sectors talking to us ... giving us the evidence that we need to build on last year’s brilliant manifesto so we have got the policies that will engage people in the private sector.”

Reporting by Kylie MacLellan, Editing by William Maclean

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