How the Davos elite learned to stop worrying and fall in love with Labour
Rachel Reeves’ message was music to the ears of the world’s business leaders.
Rachel Reeves finally made it to the top table this week. The shadow chancellor may only be a finance minister in waiting, but Reeves was selected to sit with senior world leaders at a dinner hosted by the World Economic Forum in Davos last week.
Billed as a gathering to discuss Building Tomorrow’s Europe, Reeves sat alongside Canadian finance minister Chrystia Freeland and Belgian prime minister Alexander De Croo as they dined on marinated frisée salad and Swiss Gotthard pike perch. Former UK deputy prime minister Nick Clegg and EU trade minister Valdis Dombrovskis were relegated to nearby tables with the mere global elite.
The appearance was part of a three-day marathon of schmoozing in Davos where Reeves and shadow business secretary Jonathan Reynolds held dozens of meetings with global leaders including executives from Exxon Mobil, Siemens Energy, Moderna, Uber, Novo Nordisk-owner Novo Holdings and Sequoia Capital.
The dinner was the first of several engagements for Reeves last Wednesday night: she was forced to abandon a half-eaten chocolate pumpkin cake to ensure she had time to rub shoulders with the likes of Sting, Irish Taoiseach Leo Varadkar and magician David Blaine, who spent the night performing magic tricks for billionaires and politicians alike.
As Reeves puts it, the message she wants to send is clear: the Labour Party has changed.
Speaking to The Telegraph, Reeves insisted that a Labour government would ensure “success is celebrated”, as she even dangled the prospects of tax cuts for top earners.
“Last year, it was about introducing ourselves, especially to some of the international investors and global businesses who hadn’t met us before,” she said.
“This year is much more about building on those relationships and putting some more specificity on our plans.
“Because we have changed the Labour Party. We’re now in a position to have the opportunity to change Britain and say we are a proudly pro-business party.”
The message was music to the ears of business leaders, many of whom were queuing up to meet Reeves and Reynolds at Davos.
Simon Freakley, chief executive of AlixPartners, was one attendee who believes Labour has turned a corner.
“I think all the anxiety that was generally felt about [former Labour leader] Jeremy Corbyn is not the case with [Sir Keir] Starmer,” he said.
“I think there’s general optimism and confidence about a Labour government from business because they’re not frightening them with too many old Labour policies [and] I think we’ll find a lot of business people voting Labour for the first time this time around as well.”
By contrast, few Davos attendees had encouraging things to say about Rishi Sunak and the Conservative Party. While many have avoided making public comments, privately executives are withering about the Government after the chaos of the past few years.
“There’s a running joke at the moment,” says one chief executive of a global bank. “If you have a computer that keeps asking you to change your password, all you have to do is pick the name of the latest UK prime minister.”
The implication is that there will be a new one by the time you need to change your password again.
One American executive who often speaks to the White House and has met Sunak provided a similarly uncomplimentary view.
The problem for Rishi Sunak, he says, is that many just do not see him as prime ministerial material.
“The prime minister comes across as a guy who should be chief of staff to the prime minister.
“And his chief of staff [Liam BoothSmith] comes across like someone who
‘We have changed the Labour Party. We’re now in a position to have the chance to change Britain’
should be an aide to the chief of staff. Just look at the way he dresses. His shirt buttons are always undone down to his naval.”
It’s not just the sartorial choices of Sunak’s team that people are noticing.
Many are simply just fed up with the Tories, despite their promises of tax cuts.
“We’ve had a government that’s been in power for too long,” says the chairman of another global bank. “You’ve had how many prime ministers in three years?
“I think we need a flush-out. The issue is how big is the drubbing Rishi gets and can they recover.
“Or is it going to be a 1997-style situation where the party is left in the political wilderness?”
Arguably, the Davos elite have not been won over by Reeves and Labour so much as pushed into their arms by a Tory party many can no longer stand.
The Tories’ chief representatives at Davos were Lord Cameron, the Foreign Secretary, and Jeremy Hunt, the Chancellor, who had to fly into Switzerland by private jet so he could still make the vote on the final Rwanda bill and attend a breakfast hosted by KPMG and the City of London corporation. Hunt is not going down without a fight. Speaking to reporters last week, he insisted that Labour’s promises to cut taxes had zero foundations. “Any party that says they have a confident ambition to increase spending by £28bn a year can only be planning to increase taxes,” the Chancellor said.
“If you believe – as I believe and nearly every business person I meet here believes – that the way to have a dynamic, entrepreneurial successful economy is to make our business tax rates competitive [and] to keep taxes down, it is only the Conservatives that offer that prospect.”
Convincing or not, Sunak and Hunt have one hope: that voters are turned off by Starmer.
While many at Davos described Reeves as personable, the best description of Sir Keir The Telegraph could find was “boringly competent”.
There is also the question of whether Labour has more to offer than simply warm words. Reeves was invited to speak at an event titled Modern supply-side economics, to which hardly anyone showed up.
Many believe the Labour Party still lacks ideas.
“So far, they’ve been saying the right things,” says one Swiss-based executive who has lived in the UK. “The first term of Labour is never going to be a threat.
“It’s always the second term where Labour starts getting, you know, aggressive. And, you know, Labour-y.“
Can a leopard really change its spots?
Reynolds, the shadow business secretary, is understood to have reassured several business leaders that Labour wants to help to unlock more private investment in the UK, rather than “crowd it out” with huge levels of state spending.
JP Morgan’s Patrick Thomson, who leads its asset management business in Europe, met both Hunt and Reeves this week. While the direction of travel is promising, he believes the jury is still out on Labour.
“With government or shadow government, the detail of policies is key,” he says.
“I’ve spent a bit of time with both and they’ve both said growth is really important, financial services are really important, and we welcome that.
“We fundamentally believe that having a growing economy with productive finance – all the things that Rachel has talked about – makes a lot of sense. The key, really, is to see the detail and see what that actually means. Does consistent policy follow through in the detail? [Do we have] clear regulation that gives confidence to investors? All of those things sound very banal, but they are so incredibly important.”
‘So far, they’ve been saying the right things. The first term of Labour is never going to be a threat’