Business leaders prepare for tense Labour conference amid budget uncertainty

Corporate executives and lobbyists are preparing to travel to Liverpool for the Labour Party conference this weekend, driven by a mix of anxiety and strategic necessity. With the autumn Budget only one month away, the private sector is seeking to engage directly with the new government to influence policy direction. The atmosphere is described as one of cautious optimism tempered by significant frustration over recent tax increases and a perceived lack of substantive dialogue with the Treasury.

Prime Minister Andy Burnham is expected to attend the event, which marks the first Labour conference held while the party is in government. The gathering offers a crucial opportunity for business leaders to gauge the administration’s approach to regional investment and economic growth. Downing Street is keen to secure the support of the private sector to facilitate the spread of investment across Britain’s regions, aligning with Chancellor John Healey’s stated commitment to wealth creation. The conference’s Business Day will serve as a focal point for these discussions, allowing London-headquartered firms to engage with policymakers on the practical implications of the government’s devolution agenda.

Several major corporations, including Currys, Sage, and Hargreaves Lansdown, are hosting sessions aimed at boosting national growth. Natwest is sponsoring the metro mayors’ reception, with its chief executive, Paul Thwaite, set to host a meeting of the Mid-market Growth Council. However, underlying trust issues persist among business leaders. Many recall the period shortly after former Chancellor Rachel Reeves promised a pro-business government, only to be followed by a significant increase in labour taxes at the 2024 Budget. This sequence of events has left many executives wary of further fiscal tightening, particularly given the recent hikes in business rates and national insurance contributions.

Retail and hospitality sectors are particularly vocal in their concerns. While the government has pledged support for pubs and measures to crack down on vape shops and gambling centres, these gestures have been criticised by some industry figures as insufficient. Retailers are desperate to avert further tax hikes, arguing that the current fiscal environment is unsustainable. A senior retail source noted that the sector has had minimal engagement with Chancellor Healey since his appointment in July, describing the mood as one of impatience. With five weeks remaining until the Budget, businesses are urging the government to initiate conversations about potential policy measures to prevent further cost increases.

The hospitality sector, which has been central to the Prime Minister’s efforts to connect with working people, appears slightly more constructive in its outlook. A public affairs executive at a leading pub company indicated that while frustration over employment costs and taxation remains, there has been a noticeable shift in the relationship with the government since Burnham took office. The Prime Minister’s recent pledge to cut pubs’ business rates by 20 per cent has been well received, fostering a more cooperative tone among industry representatives.

Investors and financial services leaders, however, remain deeply concerned. Speculation over potential bank taxes has unsettled the City, prompting warnings from international banking chiefs. British counterparts have taken steps to demonstrate their commitment to the UK economy, with Natwest announcing a lending programme for the North and HSBC highlighting its regional operations. Despite these efforts, many in the investment sector report a lack of meaningful engagement with the new Chancellor. Concerns are particularly acute regarding retail investment policy, an area that was central to the previous administration’s approach to the City. Meetings that have taken place are often described as lacking substance, leaving investors uncertain about the government’s long-term economic strategy.

Lobbyists warn that the conference may yield fewer results than hoped, with limited access to special advisers and potential absences of key MPs who are focused on the upcoming by-election in Holborn and St Pancras. Business leaders are expected to deliver clear warnings to Healey and Burnham about the dangers of further tax hikes, citing rising borrowing costs and inflation fears. They are urging the government to avoid repeating cost-increasing policies that have hindered hiring and growth, particularly for small and medium-sized enterprises. The mood among attendees is characterised by a mixture of fear and fatigue, as both business and government officials navigate a complex fiscal landscape with limited room for error.