Winning friends

Jonathan Reynolds is on the front line in Labour’s battle to win the hearts and minds of Britain’s businesses. It is lucky for the party, then, that the Shadow Secretary of State for Business and Industrial Strategy is, according to one retailer quoted in a recent article in The Grocer magazine, the ‘nicest man in the world’.

Reynolds, as you might expect, is far too nice to bring this glowing tribute up himself. But it is clear that he relishes the challenge of convincing the business community that Labour is on their side. “It’s busy but I love it. I have always wanted to do this job for us,” he says. “I’ve done lots of jobs with a business-facing part, especially the role of the shadow city minister for four years, but I’ve always thought Labour could do business engagement a bit better than it has done in the past.”

His passion for the brief is rooted, he adds, in his own background. Brought up in Sunderland and now representing Stalybridge and Hyde in greater Manchester, he has seen first-hand the impact of deindustrialisation and manufacturing decline.

This is not just about electability. We genuinely believe we cannot fulfil our objectives unless there is a strong relationship with the private sector

“It’s really difficult everywhere you look, but I honestly believe a Labour government could do so much better,” he says. “I think having a personal background like mine is really important to getting that right.”

The reaction of the business world to Labour’s latest ‘prawn cocktail offensive’ – the name is an echo of the similar campaign run by New Labour in the 1990s – is very warm, according to Reynolds. But he insists building a new relationship with business is not a question of electoral positioning.

“What I’m desperately trying to get across to people is that this is not just about electability or some sort of more moderate pitch. It’s that we genuinely believe we cannot fulfil our objectives unless there is a strong relationship with the private sector,” he says. “One of the major problems we face is that the UK has the lowest business investment in the G7. There are lots of reasons for that and the lack of political stability has certainly been a factor. I just think in [an] economy where 80 per cent of people work in the private sector, if you haven’t got a good pitch to them, you’re not going to succeed on employment or living standards or wages.”

Labour’s industrial strategy, launched back in September, is centred around the notion of partnership between the state, business and trade unions to deliver the growth the country needs. This pro-business, pro-worker approach is based, Reynolds explains, on a ‘very simple observation’. “If I go to any major business or industrial facility in this country, I’ll obviously talk to the union reps privately in some part of that meeting. And what they will tell me is 90 per cent the same as what the management will tell me they want from government, which is long-term political commitment. They want government to care. They don’t want the government to run the business, but they want them to care about the jobs in that sector.”

But partnership with business should not mean ditching Labour principles, Reynolds insists, especially since the employers he talks to are often sympathetic to the party’s reform platform. Take, for example, the party’s pledge to strengthen workers’ rights. “People know we’re the Labour party, they know we’re going to have an interest in that area,” he says. “I think that when you see scandals like P&O ferries, a lot of businesspeople were horrified by that. That’s not the outlook they’ve got and it’s not how they want people to think about British business. I think in many of the sectors that we’re talking to, they have an employment offer which is far in excess of the kind of minimum standards we’re looking to put in.”

“I know of all the things we’re offering, this might be one where there’s more questions as we get to the election,” he adds. “But I don’t feel there’s a pushback against the point that, in recent years, in the relationship between state, business and individual, we’ve seen some business models that have put too great a transfer of things onto the individual or onto the state.”

Industrial strategies of the past, both here and abroad, have often focused on manufacturing or high-profile sectors like technology. Reynolds says that Labour’s approach is more all-encompassing, targeting industries beyond those like automotive or aerospace which lend themselves to photo opportunities in high-vis jackets.

“Our industrial strategy talks about the care sector, it talks about the need for sectors like hospitality and retail to be a part of it. I think that is the kind of focus any Labour government needs,” he says. “These are the sectors which actually employ the vast majority of people. You can point to individual policy successes, but has there been that kind of consistent approach, saying: ‘we value these sectors and we want to see overtime pay [and] terms and conditions raised in them for the benefit of the economy as a whole’?”

We have had to earn the right to be given a hearing and the engagement we’ve had with businesses is a big part of that

Labour’s strategy includes initiatives designed to boost growth and provide more clarity for business, from reforming business rates to establishing an industrial strategy council to oversee the government’s efforts. But it would also involve creating what Reynolds calls a ‘total business environment’ that would demand changes in areas such planning to help businesses succeed.

“We’re completely inconsistent in the UK on that,” Reynolds claims. “Even not necessarily Labour-friendly people will say to me they don’t know what this country is trying to be post-Brexit and after 13 years of Conservative government. I honestly think if you got a Tory MP who was elected at the same time as me in 2010 to candidly tell you how they feel about the position Britain’s in after 13 years of Conservative government, even after allowing for a pandemic and the war in Ukraine, I think privately most of them are horrified by the state of the economy.”

Key to Labour’s success if it forms the next government will be making Britain competitive again, a task made more difficult both by Brexit and by Joe Biden’s multi-billion investment in green industries in the US through his Inflation Reduction Act. “Biden is now one of the most consequential presidents in US history, not just because of the scale of the economic move but the political project that sits behind it,” Reynolds says. “It changes the world, it changes supply chains, it changes the attractiveness of other destinations. The EU is going to respond to that, and a significant relaxation of the state aid rules seems essential.”

He adds: “I ask businesspeople ‘where do you think the UK government is on this?’ and they really don’t know. I think the government is pretty much frozen. We’re not going to compete with the sheer fiscal firepower of the Inflation Reduction Act because it’s huge sums of money. But we have to recognise that there are things that will make the UK more attractive, using our natural advantages to level the playing field a bit.”

But if the UK is now less competitive, surely Labour could address that by reversing the self-inflicted harm of Brexit? Reynolds understands that sentiment, but says it would not be helpful to revisit leaving the EU. “I totally understand how people feel because this has become such a strongly held thing and it’s a badge of identity, whichever stance people took on it,” he says. “People often say something to me on the lines of ‘you know, when’s Labour going to be more politically brave?’ But if your critique of this government and the current British economy is that we have got the lowest business investment in the G7, the kind of uncertainty you are kicking off by reopening the whole debate is not going to fix that, it’s going to make it worse – and then you’ve gone from a period of you know, six or seven years to maybe 16 or 20 where people are so uncertain about what’s going to happen.”

Instead of relitigating Brexit, then, Reynolds says Labour will be concentrating on areas like making food exports easier, smoothing touring rights for creative industries and rejoining the Horizon Europe science programme. “All of these things are completely deliverable and mutually in the interest of Europe as well,” he says. “I think that’s a way to proceed which cooperates with our friends and neighbours in a way I think people reading this interview will want to see. Focusing on these kinds of trade issues rather than the constitutional questions of a single market and customs union is a much better, clearer way forward and gives us a chance as a country to move on.”

First, though, there is the little matter of a general election to win. Reynolds is clear that a sixth Conservative prime minister in a row would be a disaster for the UK economy. He is under no illusions about the scale of the challenge, but believes Labour is now well-placed for an election victory.

“The electoral challenge is immense. To come from a 2019 result to winning has never really been done before by any political party in the UK,” he says. “But I do think one of the changes we’ve seen is that we have a much more volatile electorate – there are more people up for grabs in the general election than ever before.

“Although the government has clearly had problems – we’ve had three prime ministers in a year – I don’t think we’re the kind of country where support just automatically switches from the governing party to the main opposition. I think we have had to earn the right to be given a hearing and I do think a lot of the preparation and the engagement we’ve had with businesses is a big part of that.”

If Labour does pull it off, Reynolds says it will be a government full of ambition. “What I think Keir has done with his mission speech on the economy, and this huge aspiration to have the highest sustained growth in the G7, gives us something which is more than the sum of the individual policy parts. I want people to be looking at it saying ‘wow, that’s a big commitment from Labour – can they really do it?’ That’s the vision – and I think increasingly, a lot of businesses and a lot of people want to contribute and be a part of that.”

At the heart of that ambition will be a better future for places like Sunderland and Greater Manchester. “Labour governments have to do many good things, but I think our story about good work and good wages has got to be the soul of the next Labour government. That’s what I want to be involved in delivering.”

Image credit: David Woolfall, CC BY 3.0 via Wikimedia Commons