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Business chiefs slam Labour…..well they would say that wouldn’t they?

Business chiefs slam Labour…..well they would say that wouldn’t they?

🕔01.Apr 2015

Can Labour still win the General Election in the face of outright hostility from some of the country’s leading businesses?

This is a question it wasn’t necessary to ask in the days of New Labour’s love-in with capitalism.

But publication today of a letter in the Daily Telegraph from 103 senior UK company executives warning that Ed Miliband’s tax-raising inclinations and economic policies would threaten jobs and could be a defining moment in the General Election campaign.

One reaction is to suggest that they would say that wouldn’t they?

This is the line taken by Shadow Business Secretary Chuka Umunna, who said:

No one will be surprised that some business people are calling for low taxes for big businesses. That’s nothing new and under Labour Britain will have the most competitive corporation tax rate in the G7.

Earlier this year, incidentally, Mr Umunna  said Labour was no longer interested in the “arms race” of getting business leaders to write letters to the Telegraph or the Financial Times backing the party, so he presumably will not be too troubled by the latest events..

Labour’s rebuttal machine swung into action claiming that 23 of the letter signatories were Tory donors who had jointly given over £7.5 million to the party in recent years.

Mr Umunna did not dwell on Labour’s promise to reverse the latest one penny cut in corporation tax if the party wins the election, as well as introduce a mansion tax on houses worth more than £1 million, and reinstate the 50p rate of income tax for top earners.

There is also the prospect of a one-off levy on bankers’ bonuses, a freeze on energy prices, and even the possible renationalisation of the railways if Mr Miliband gets to Downing Street.

Much of the business community regards the current Labour leadership as the most left wing in recent times and is fearful of a return to state control of industry as well as more regulation. Their fears will only have been heightened by the Campaign Group of hard-left MPs flexing their muscles and threatening to vote against any further public spending cuts if there is a Labour government.

Today’s letter is a significant advance on a similar tactic before the 2010 General Election when 30 chief executives publicly opposed Labour’s plan to raise national insurance contributions.

This time, 103 of the biggest names in business have united to warn that any change in current economic policies after the General Election would put the recovery at risk and push up unemployment.

Among those signing the letter are the CEOs, chairmen or founders of well-known high street names including fashion store Ted Baker, Iceland and Mothercare. FTSE 100 companies supporting the letter include BP, Whitbread, Prudential, Associated British Foods, Travis Perkins, Meggitt and the Compass Group.

The list also includes Peter Grauer, the chairman of Bloomberg, the corporation where Mr Miliband chose to unveil his business manifesto on Monday.

Five business leaders who previously backed Labour have signed, including Sir Charles Dunstone, the chairman of Dixons Carphone and Talk Talk, and Duncan Bannatyne, a former star of Dragons’ Den.

According to the Daily Telegraph, the letter is the biggest ever endorsement by business leaders of a political party and will further undermine Mr Miliband’s economic credibility.

Getting 103 powerful and independent-minded executives together and persuading them to sign a political statement must be seen as quite an achievement, but will it have any impact on voting intentions?

Twenty years ago Labour under Tony Blair and his lieutenant Peter Mandelson fought tooth and nail to convince executives that the party was business friendly. Mr Mandelson famously remarked that he was “intensely relaxed about people getting filthy rich”, and by the early 2000s Labour regularly produced glowing endorsements from captains of industry.

Mr Miliband appears intent on taking an altogether different approach.

Soon after winning the Labour leadership ahead of his Blairite brother David, Ed Miliband said that businesses were divided into “predators and producers”.

Earlier this year the Labour leader signalled a hardening of attitudes when he very publicly criticised Stefano Pessina, the multi-billionaire owner of Boots who lives in Monaco, over his tax affairs. Mr Pessina had warned of “catastrophe” if Labour won the election.

Miliband’s intervention saw other business leaders accuse him of “playing the man, not the ball”.

Those close to Mr Miliband reportedly believe the political landscape has changed significantly since Labour felt forced to engage in a prawn cocktail charm offensive in City boardrooms. Voters are far more concerned about the motives of big business and allegations of tax dodging than was ever the case in the past and may regard the Telegraph letter as entirely predictable.

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