Businesses abandoning ‘zombie’ Tories with CEOs ‘just wanting to talk to Labour’

09/05/2024

As the general election draws ever closer, the Westminster and Whitehall village is increasingly turning its attention to what comes after.

Parliament is in a “slowdown” and Rishi Sunak has begun to focus on manifesto policies such as welfare reform, boosting defence spending to 2.5 per cent by 2030 (though that begins ramping up immediately), and a long-term ambition to scrap national insurance.

The shift is fuelling accusations of a “zombie” Government and Parliament. No 10 rejects these suggestions. But, as Labour continues to look on course for victory in the election, a deeper change is afoot, lobbyists have told i .

Sources at big public affairs firms say the blue-chip businesses they serve are losing interest in engaging with Conservative ministers because it looks increasingly likely that Sir Keir Starmer will be installed in Downing Street by January at the latest.

One insider told i that while there was “technical work” ongoing in Whitehall, “it’s increasingly hard to get senior leaders at clients to engage with ministers – they just want to speak to officials or Labour”.

This is partly down to corporate affairs departments “saying to CEOs ‘spend your time with Labour’”, but also because “Government action and work” is proceeding “very slowly”, with “so many bits of legislation just hanging around”.

Sonia Khan – a former special adviser to Conservative chancellors Sajid Javid and Philip Hammond, and now a partner at public affairs firm H/Advisors Cicero – has seen a similar change. She told i that businesses were spending less time speaking to the Government as ministers’ focus shifts to “short-term policies and ‘quick wins’ to bring consumers onside”.

“It means any significant policy making like the long term plan for the economy or what the UK will do on net zero is effectively benched until a new Government is in place,” said Ms Khan, whose corporate clients have included Accenture, Barclays and Blackrock.

“There’s also the fear that any policies agreed now could be undone as a new Government comes in with their own King’s Speech and Budget. It won’t stop people trying to make things happen but there’s not much cut-through.”

Elsewhere, key figures in both the Tory and Labour parties are spending ever more time in campaigning roles.

Tory campaign chief Isaac Levido is just one of the advisers who has moved out of Whitehall and into the party’s headquarters.

Similarly in Labour, shadow Cabinet Office Minister and national campaign co-ordinator Pat McFadden now spends most of his time in party HQ, where other aides are also being seconded.

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Downing Street argues that the work of the Government is busy as ever, with recent major announcements, such as on welfare, defence and operationalisation of the Rwanda plan, taking up a significant amount of ministers’ and officials’ time.

The Prime Minister’s allies, meanwhile, rebut suggestions that the corporate world is losing interest in his Government. They point out that he has recently been engaging with high-profile businesses such as driverless vehicle firm Wayve, where the CEO praised Mr Sunak for creating the conditions for economic growth, and DHL last week.

Alice Lilly, senior researcher at the Institute for Government (IfG), said it was natural for Mr Sunak to look to the future with his defence and welfare announcements, which will not be fully realised until after the election.

“If you’re a government coming up to an election, yes it’s important to point to what you have achieved, but you also want to be able to say what you’d do, and be forward looking,” she added.

“It is always easier and therefore more tempting for governments to allow future plans to do things rather than carry on with implementing the things you’d already said you would do.

“You are starting to think about the election, the manifesto, you are starting to think about what you could announce that doesn’t require you to do anything in the immediate future.”

This has, however, been accompanied by a slowdown in Government business in Parliament, with the Financial Times reporting in March that the working day for MPs in the House of Commons has been shorter in this parliamentary session than at any other time in the past 25 years.

This has left some of the bills promised in the King’s Speech, or even beforehand, at risk of running out of time to pass into law before the election, with 18 pieces of legislation still going through Parliament.

The “most at risk” are those carried over from the previous session, as they are legally or technically complicated, and others which are just “politically tricky”, such as the Sentencing bill or Renters Reform bill, said Ms Lilly.

She said there was still a “good chance” the Government “gets everything through”, although it may have to “make compromises” or “ditch” more controversial aspects of legislation.

Concessions have already been made on the Renters Reform bill to Tory MPs who want greater protections for landlords, while the Sentencing Bill, which effectively ends the shortest sentences to ease overcrowding in jails, is held up amid a backbench revolt.

“Over the last few weeks and months, when you are looking at the Commons, there’s not a huge amount of legislative business in there, Ms Lilly said.

“You’re often seeing general debates, backbench debates, and that stuff is important, but the Government is not using all of the time it could be using for legislative business. So is that a sign that actually people know there are some fights coming, that things could be tricky.

“Maybe, given we’re coming to the end of this Parliament, if some of these bits of legislation are tricky and time is a factor, you may be able to use that to your advantage as a government, you might be able to say: something is better than nothing.

“But it definitely feels like there has been a bit of a slowdown in legislative terms and it feels like the politics has a lot to do with that.”

Tory MPs acknowledge this change of pace in Parliament. But one argued that this is “quite fair and entirely normal in the run-up to a general election”, adding: “Whilst you’re confined to barracks in Parliament, it gives your opponent the advantage of more canvassing time to try persuade swing voters to go their way.

“This means there is a clamour from colleagues to get themselves slipped from Parliament, to be more visible in their constituencies campaigning and attending.”

The MP adds that there is still “important, possibly controversial, legislation” going through, while acknowledgingthat the “King’s Speech was very light” in a pre-election year, meaning Parliament will inevitably slow down.

A former minister, meanwhile, says May is “always quieter” due to local elections, and parliamentary business “is exactly as it is always for this time of year”.

But they suggested that bills currently going slowly in the Lords might not make it on to the statute before the election, citing the Renters Reform bill.