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30 September 2002

Where’s the free bubbly gone?

Labour Party Conference - Instead of holding swanky receptions in Blackpool this year, busi

By Mike Craven

Once – not so long ago – like some great autumn migration, the giants of industry made the annual trek to Labour’s seaside conference. British Airways, Virgin, British Midland, B&Q, Somerfield, Pfizer, Lockheed Martin, even the Institute of Directors, packed the roll-call of exhibitors in 1999. An exhibition stand and a high-profile reception in a swanky hotel were essential.

No longer. None of these companies will have an exhibition in Blackpool this year. In fact, Labour’s exhibition hall will host just four FTSE-100 companies. As for those swanky receptions, they’ve become a rarity. The corporate champagne risks positively drying up.

What changed? Yes, economic conditions are tougher now than in 1999. Since 11 September 2001, everyone has been scrutinising every penny of expenditure. But that is only part of the story.

When Neil Kinnock and John Smith launched their charm offensive towards the private sector at the end of the 1980s, it was a novelty. The party of labour had never before wooed the money men. By the time Tony Blair was elected in 1997, the annual trip to the seaside had become a corporate pilgrimage. Millbank organised away days for company chief executives where, for a few hundred pounds, they would lunch, would listen to the big speech, meet a few frontbenchers to talk policy and have afternoon tea with Blair.

Blair courted the big beasts of the corporate world such as GEC’s George Simpson, Bob Ayling (then chief executive of British Airways) and Richard Greenbury (former chairman of Marks & Spencer). BP’s David Simon was brought into government together with David Sainsbury as science minister.

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Today, neither partner in the Labour-business couple is quite as passionate about the other as before. Familiarity has not bred contempt, but it has made the trip to the conference, which once seemed so daring, feel like something really rather ordinary. Indeed, only a handful of CEOs plan to be present this year – there are very few things that a business can do in Blackpool that it cannot achieve more satisfactorily in London. Want dinner with MPs? Try a Westminster restaurant. Have a problem with legislation? Go and see the minister in his or her office. Want to influence policy? Sponsor a think-tank study.

As for the PM himself, the CEOs know that they don’t need to sweat the ten-hour round trip up the M6 to meet Blair. Most have, over the past five years, already met him. And even beyond No 10, communication between business and government has steadily improved. Whitehall culture is now imbued with consultation. If a company (or a union) has a genuine problem in which the government has an interest, it can get to see the relevant minister, up to and including the PM if necessary. The Trade and Industry Secretary, Patricia Hewitt, is well regarded and approachable, and No 10’s link- man with business, Geoffrey Norris, is highly respected. For their part, most major companies have a senior executive responsible for government affairs, and many employ an agency to assist them.

There are still areas of Labour’s relations with business that need improvement. The government has made it more difficult for business to be involved with the party. The Political Parties, Elections and Referendums Act 2000 is a badly drafted piece of legislation that forces companies to seek shareholder approval for any activity which might constitute a donation, including sponsoring research by think-tanks and taking ads in political programmes.

In part, Labour’s wariness is due to the media-induced sleaze frenzy. Companies that have contracts with the public sector and take exhibition space or hold a reception at the Labour conference are perfect fodder for journalists trawling for something to file in order to justify their expensive seaside jaunt.

Business leaders are still also angry with Labour about the national insurance increase. The 1997 decision to abolish advance corporation tax is a running sore. If business still gives credit to Gordon Brown for his management of the economy, it complains bitterly about more and more regulation.

Not that this has helped the Tories. If there are few company executives in Blackpool, there will be even fewer in Bournemouth the week after. Blair has broken the institutional link between the Conservative Party and big business. Few Tory MPs now graze in City pastures, and direct donations to the Tory party, once a feature of big company balance sheets, are mostly gone.

After five years of Labour government, the business world’s relationship with the party has matured. The fear has gone, but so, too, has the excitement, the sense of daring that they were going to a Labour conference. Labour has become ordinary. This may not be good news for the party coffers or for delegates in search of free champagne. But it reflects a profound change for the good in Britain’s political landscape.

Mike Craven is a partner at Lexington Communications and a former Labour Party official