The Guardian has learned that Labour will announce its City policy proposals at its sold-out business conference next week, in an attempt to gain the support of numerous UK executives ahead of the upcoming general election.
On February 1st, over 500 leaders in British finance will convene in London for a gathering. At this event, opposition leaders such as Sir Keir Starmer, Rachel Reeves (shadow chancellor), and Jonathan Reynolds (shadow business secretary) aim to highlight Labour’s proposal to the business community.
The party is optimistic that the conference, which was completely booked in just two hours last fall, will showcase their dedication to collaborating closely with the business sector. They also plan to unveil their business policy plans following two significant industry evaluations.
The Guardian has learned that this will encompass the Labour Party’s highly-anticipated plan for the financial sector, outlining their approach to utilizing the UK’s robust £275 billion industry for financial and professional services.
In December, Reeves and Tulip Siddiq, the shadow City minister, announced that they had chosen a group of 10 unbiased experts from the financial industry to advise them on their strategy for the City, which makes up approximately 12% of the UK’s economy.
Several months prior, Labour enlisted the help of consultants from Oliver Wyman to collect insights from over 80 organizations in the industry, such as TheCityUK, UK Finance, and British Private Equity and Venture Capital Association, as well as consumer groups and charities.
Siddiq is set to present the results and proposed actions at a morning meeting with leaders in the City on the following Thursday. The topics will encompass financial regulations pertaining to the “buy now, pay later” model and efforts to promote diversity among different genders and ethnicities in the industry. The announcement is expected to focus on five main areas: capital markets, competitiveness, consumer safeguards, innovation, and sustainable practices.
Unfortunately, the Labour party’s strategy towards contentious matters, such as their proposal to eliminate reduced tax rates for “carried interest” in the private equity sector, were not included in the City review, as reported by sources.
Carried interest is the portion of earnings received by private equity fund managers for successful transactions. Currently, these managers are subject to a 28% capital gains tax on their profits, which is significantly lower than the 45% income tax for those in higher income brackets. In 2021, the Labour party had promised to eliminate this tax loophole, which is estimated to benefit approximately 2,000 private equity bankers in the UK.
The shadow business minister is anticipated to announce the party’s plans for amplifying the representation of small businesses. This comes after a study conducted by lobbyist Iain Anderson, a former advisor to Boris Johnson, who left the Tory party in 2023.
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Anderson had been asked to draft a plan for how Labour should engage with smaller firms, to ensure they were not sidelined by engagement with big business and unions. “This is about everybody getting an ability to make a pitch,” Anderson told the Financial Times in October.
The Labour Party’s conference, whose location is being kept confidential for security reasons, will take place over a month before Jeremy Hunt’s spring budget on March 6th. This will allow the opposition to have some advance notice before the chancellor unveils proposed measures that the Conservative Party believes will be attractive to both businesses and voters.
The labor was asked for their statement.
Source: theguardian.com
