The Great Business Betrayal: How Labour's Tax Hikes Backfired
In what now appears a remarkable miscalculation, 121 company chiefs publicly endorsed the Labour Party before last year's general election, believing Keir Starmer and Rachel Reeves would deliver Britain's most business-friendly government. Among the prominent supporters were billionaire Sir Jim Ratcliffe, owner of petrochemical giant Ineos, and former Conservative donor John Caudwell, founder of Phones 4U.
The unprecedented corporate backing came despite clear warnings about Labour's true intentions. As one commentator noted in the Daily Mail at the time, this represented 'big business sucking up to Labour' with predictions that the party's policies would send 'jobs going down the plughole'.
The Cost of Broken Promises
The reality has proven even worse than feared. Chancellor Rachel Reeves' first Budget delivered a devastating £40 billion increase in employers' national insurance contributions, directly contravening Labour's manifesto pledge not to raise national insurance. Economic analysts estimate this move has already cost approximately 125,000 jobs across the UK economy.
Business leaders who supported Labour now admit feeling misled. When financial newspaper City AM contacted all 121 original signatories last December, only 28 remained willing to repeat their endorsement. One signatory confessed: 'I signed it, I was asked twice to sign it and I do feel stupid. We were lied to on that, they said they were pro-business.'
Celebrity chef Tom Kerridge, another signatory, described the 'jobs tax' as 'catastrophic' for his industry, while Richard Walker of Iceland supermarkets, who had enthusiastically switched from Conservative to Labour support, pleaded unsuccessfully with Reeves not to 'squeeze businesses like a lemon'.
North Sea Crisis and Employment Reforms
The troubles extend far beyond taxation. Energy Secretary Ed Miliband's policies have wreaked havoc on oil and gas businesses, prompting Ineos to close its Grangemouth refinery while warning that 200,000 UK jobs associated with oil and gas are now at risk.
Meanwhile, Labour's controversial Employment Rights Bill continues its path through Parliament, despite cross-party concerns. The legislation includes what critics call an 'extreme' provision allowing workers to sue for unfair dismissal from their first day of employment, a move even the Tony Blair Institute criticised as potentially damaging to job creation.
As one business leader lamented about Labour's performance: 'Ultra-high net worth individuals are leaving the UK in droves', with steel tycoon Lakshmi Mittal among the record-breaking number of entrepreneurs departing Britain.
The ultimate irony remains that many of Labour's most damaging policies were clearly outlined in their manifesto, leaving business leaders with little defence for their failure to properly scrutinise the party's plans before offering their very public – and increasingly regretted – support.
