There is something exquisitely British about watching a government try to sweet-talk the very people it is about to fleece. Like putting out the good biscuits before the bailiffs arrive.
And so we have Sir Keir Starmer — a man whose natural habitat is somewhere between a Select Committee hearing and an apologetic queue at Pret — inviting the grandees of British business to No 10 for what Downing Street insists on calling an “informal reception”.
NatWest, Sage, Marks & Spencer, Taylor Wimpey, Octopus Energy… all the familiar names trooped dutifully through the famous black door, like polite wedding guests who know full well that the groom is a wrong ’un but have still bought a gift from the list because, well, it’s tradition. And what did they get for their trouble? A drink, a handshake, and the creeping realisation that Rachel Reeves is sharpening her fiscal guillotine for 26 November.
Because let’s be honest: corporate Britain is not stupid. It can smell a tax raid long before it hits. Businesses up and down the country have been braced for this budget ever since Reeves’s first go at the Treasury last year, when she hiked employer national insurance and the minimum wage so aggressively you could practically hear the collective groan from every payroll director in the land. That budget, you’ll remember, destroyed in about nine minutes the painstaking courtship Labour had undertaken in the years after Corbyn — a sort of political couples therapy designed to assure business leaders that yes, the party had changed; no, nobody was coming for their yachts; yes, they could come out from behind the sofa.
Starmer’s reception this week was meant to be a soothing gesture — a warm hug before the cold reality of a £30 billion black hole in the public finances is unveiled. But the whole thing had the atmosphere of a GP offering you a lollipop moments before telling you they’re going to remove your leg “just to be safe”.
What Reeves is reportedly considering next would make even Gordon Brown blush. A manifesto-scrambling rise in income tax (because who needs promises, really?). A full-blown assault on limited liability partnerships (sorry, lawyers; sorry, accountants; most people won’t be sorry at all). And, my personal favourite, a raid on salary-sacrifice pension schemes — those clever little mechanisms businesses use to keep costs down without asking employees to start living on tinned tomatoes.
So yes, the mood in the room was not exactly “Christmas at Liberty”. It was more “annual meeting of people who know the bill is coming but haven’t yet decided who’s paying”.
The tragedy here — and it is a tragedy, in the classic British sense of being entirely foreseeable and yet still somehow depressing — is that Labour really had the business community on side. For a hot minute, Starmer and Reeves were the sensible grown-ups. The ones who wouldn’t crash the economy in a fit of ideological pique. The ones who wouldn’t treat FTSE companies like enemies of the state. The ones who, we were told, “understand how wealth is created”. (And then, three months later, taxed the people who create it.)
But credibility, like a good steak, is hard won and easily ruined. And Starmer’s government appears determined to prod it to death with the sharp end of a policy fork.
The prime minister’s great hope is that business leaders are, at heart, desperate for stability — so desperate that they will swallow any number of tax increases as long as they are announced in complete sentences rather than the fever-dream scribbles of their predecessors in government. There is a degree of truth in this. Business likes predictability. It likes grown-ups. It likes the lights to stay on when it flicks the switch.
But there is a limit to how much “doing your bit” people can be told to do before they start seriously contemplating the joys of Dublin. And Reeves’s recent speech, in which she solemnly informed us all that “each of us must do our bit for the security of our country and the brightness of its future”, felt a bit like being told to wash up someone else’s dishes because “we’re all a family here”.
Downing Street declined to comment on the guest list, naturally, which is Whitehall code for “everyone involved is furious but nobody wants to go first”. But I suspect that behind the forced smiles and the warm white wine, Britain’s top executives were quietly tallying up just how much this government is about to cost them — and whether any of it will actually be worth it.
Because while Starmer may believe that a few canapé-laden evenings can repair the damage, business leaders know better. Trust in politics is not rebuilt with receptions; it is rebuilt with policy that doesn’t change direction every time the wind blows across Horse Guards Parade.
And unless Reeves pulls an economic rabbit out of her red box later this month, the only thing hopping out of No 10 will be Britain’s most mobile — and most taxed — businesses.