In its 115-year history, the Labour party has been at its most successful when it has constructively and proactively engaged with the business world. This phenomenon was perhaps most visible during the New Labour years, where the party appeared to fully appreciate the role that business could play in modern British society – generating strong growth and jobs, while relentlessly innovating to keep the United Kingdom at the forefront of technological advances across all industries. The party supported this effort, implementing policies which helped maintain the UK’s status as a global centre for enterprise and entrepreneurship.

After the financial crisis and the end of 13 years of Labour government, the subsequent transition to a framing of business in the adversarial context of ‘predators vs producers’ under Ed Miliband was unfortunate. The traditional Labour positions of seeking to prevent the exploitation of workers and consumers – which run through all wings of the party – would have been far better served by a narrative of positive and progressive cooperation to manage issues such as energy prices or zero-hour contracts. It is on this foundation that a future Labour relationship with business must be built. How can government and businesses come together to tackle society’s challenges?

It will be important for the new leader of the party and their shadow cabinet to forge fresh relationships across the business community and take stock of what companies are already doing to tackle issues close to Labour’s heart. Consumers are increasingly expecting companies to account for their actions, and there is a clear recognition by businesses that they need to demonstrate their wider contribution to society. Indeed, the BVCA’s members – private equity and venture capital firms which invest millions of pounds across the country each year – are acutely aware of this fact and recognise that the proactive management of environmental, social and governance matters in their portfolio companies is a logical extension of their primary objective as investors to build better businesses.

Working with and championing the efforts of relevant third sector organisations will also be important. The party should look to work with projects such as the B Corps movement, which has recently launched in the UK and provides certifications for businesses which meet rigorous standards of social and environmental performance, accountability and transparency. Such action could form part of a broader effort within Labour to understand and apply innovative and most importantly economically driven ways of encouraging better corporate behaviour, rather than focusing on the state and greater regulation for solutions.

Of course the Labour party’s relationship with business also needs to be ameliorated in another area – that of ambition, aspiration and entrepreneurship. As some candidates in the recent leadership campaign noted, the party needs to once again be seen to back individuals with new business ideas, the fledgling start-up, or a small business on the cusp of a pioneering breakthrough which could see it flourish. While there is a range of support available for these actors, Labour could expand on the debate it began with respect to the ‘big six’ energy firms under Ed Miliband, calling for the lowering of barriers of entry to a broader set of industries and increasing competition. Notably sectors such as banking are seeing the growth of so-called ‘challengers’ which could be replicated elsewhere. This would be particularly advantageous for consumers who could experience the benefits of this increased competition in the form of lower prices and better services. This is but one example of a pro-business policy with a direct appeal to Labour voters which the party should think more about in the coming years.

While it forms only one part of the wider economic narrative Labour will have to develop before May 2020, the party can begin to rebuild its relationship with the business community if it presents itself as a partner rather than an adversary looking for tax revenue. There is significant room for cooperation to ensure that workers are treated fairly, that consumers are being charged appropriately, and that companies are taking steps to reduce their environmental footprint, all while working towards a wider business environment that enables companies to grow and jobs to be created. The acid test for the new Labour leader then is whether to grasp this opportunity and demonstrate that the party is serious about the future prosperity of these islands – anyone who continues to see business as only part of the problem for Britain, cannot be fit to govern it.

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Tim Hames is director general of BVCA

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JOIN US FOR …

Back to basics: How does Labour rebuild relationships with business? in partnership with BVCA
12.45pm, Sunday 27 September 2015
Wagner Hall, Regency Road, Brighton, BN1 2RT

Chris Leslie MP Nottingham East
In conversation with Tim Hames Director general, BVCA

Refreshments provided. Wheelchair access available.