On the evening of the 2019 general election, Jonathan Reynolds’ political life flashed before his eyes. His seat of Stalybridge and Hyde, Greater Manchester, was one of those projected to fall to the Conservatives. “People start tweeting as if you’ve died,” he recalled with amusement. “They start writing things like, ‘Had a lot of time for Jonny Reynolds,’ or ‘Jonny Reynolds was a nice bloke.’”
Reports of his death had been much exaggerated. Reynolds survived with a reduced majority – it fell from 8,084 to 2,946 – and he is now poised to enter government in a week’s time. As shadow business and trade secretary since November 2021, he has overseen Labour’s transformed standing with industry.
This is a world in which tickets for the party’s planned “business day”, priced at £3,000 per head, sold out in hours; one in which a recent poll of 1,005 executives (by Savanta) found that Labour is regarded as better for business than the Conservatives by a margin of 46 per cent to 32 per cent.
For Keir Starmer, a new relationship with business – along with tackling anti-Semitism and unambiguous support for Nato – was one of the three tests of whether Labour had changed. By any measure, it has.
“Anyone who thinks we’re just doing this in opposition and that we wouldn’t carry this through into government has failed to understand who we are as people,” Reynolds, 43, told me when we met during a recent campaign visit to Peterborough (a Conservative marginal destined to fall to Labour).
For Reynolds, as for Starmer and the shadow chancellor Rachel Reeves, there is no contradiction in being both pro-business and pro-worker. “Growing up in the north-east, what was the big economic deal? It was inward investment from Japan and Nissan. There is nothing inconsistent with wanting to attract that kind of investment and representing working people.” Reynolds went on to cite Labour’s New Deal for Working People as a key pillar of its approach (“it could be an incredibly significant achievement”). Through measures such as the abolition of exploitative zero-hour contracts, the party aims to increase productivity by incentivising firms to invest rather than relying on cheap labour.
When Labour speaks of a new “partnership between business and trade unions”, some are reminded of the corporatism pursued by Harold Wilson and Edward Heath in the 1970s. But Reynolds, perhaps unsurprisingly, bridles at the term. “I’m really cautious about the past, the industrial strategy that we’re talking about is not nostalgic. It’s not that we all turn up in Downing Street and try and reorganise companies [to be] like British Leyland.”
He added: “There is huge scepticism from the business community about British politics because the kind of stability that was once taken for granted has completely gone.”
Since the 2019 general election, the UK has had three prime ministers and five chancellors. Liz Truss’s mini-Budget triggered market turmoil, while Boris Johnson declared: “F*** business.” (Reynolds recalled one FTSE 100 chief executive who observed that Johnson would have been gone “within hours” during partygate had he been a business leader.)
In this context, the UK’s already parlous investment record has grown worse: the country has had the lowest business investment in the G7 for the past three years and ranks 28th out of 31 OECD countries (ahead of only Greece, Luxembourg and Poland).
Labour’s ambition is to effect a transformation – not least because its tight fiscal rules mean it depends on higher business investment. “There’s been a tendency to look for a magic wand, whether it is Brexit or Scottish independence; even austerity was once sold as a growth strategy [expansionary fiscal contraction]. It’s not about that, it’s about how you improve your business environment.
“Consistency is a big part of that, an effective industrial strategy, turning the apprenticeship levy into the growth and skills levy, making the Brexit relationship work better, planning reform; then there’s the New Deal for Working People. I do resent it when people say that we haven’t got an agenda, we’ve actually got a really quite significant one.”
Before the 2015 general election, Ed Balls, the then shadow chancellor, was asked on Newsnight to name a business leader who supported Labour and he could only reply “Bill” (prompting David Cameron to quip that “Bill somebody is Labour’s policy”). When I put the same question to Reynolds, he cited Andy Palmer, the automotive executive (known as “the godfather of EVs”) and Andy Higginson, the chairman of JD Sports. Palmer was one of 120 business leaders to sign an endorsement of Labour last month. “I know the Tory attack was, ‘Where are the FTSE 100 CEOs?’ Well, of course some of those companies have internal regulations that prevent that. I think the Conservative criticism has fallen apart because I don’t see a strong set of endorsements for the Tories.”
In this new political era, the stereotypical image of a business leader as a pinstriped Thatcherite has never felt more outdated. Does Reynolds believe that business has moved leftwards? “There is no doubt there’s a generation of business leaders who have been quite substantially different to that era [the 1980s], much more focused on purpose and issues such as climate change, and who genuinely take their workers seriously; there are some natural allies there.” Reynolds cited Greg Jackson of Octopus Energy, a renewable energy group, and Dale Vince, the owner of Ecotricity and a Labour “super-donor” (having given more than £5m), as emblematic of this change.
“On net zero, the Conservatives have got it fundamentally wrong. What businesses want is some certainty, a commitment that if they invest around a particular timescale then the goalposts will not be moved.”
For Reynolds, in the UK as in the US, business and the centre left are now natural partners. “If you compare the industrial strategy being pursued by President Biden with the populist Republican governors in certain states – attacking business for being woke – there’s no doubt that it’s the centre left that is more focused on the issues that matter.”
Jonathan Reynolds was born in Houghton-le-Spring, Sunderland, into a working-class family. His father was a fireman and his mother was a dinner lady. He entered parliament in 2010 having worked as a political assistant to the former cabinet minister James Purnell (Stalybridge and Hyde’s previous MP) and as a trainee solicitor. He was a member of “the Nando’s Five”, a group of five new MPs spotted eating at the restaurant before a late-night parliamentary vote in 2011. The other four were Chuka Umunna, Luciana Berger, Emma Reynolds (no relation) and Rachel Reeves.
“Rachel is obviously a real friend as well as an ally and colleague. I think she’s exceptional,” Reynolds said of the shadow chancellor, whom he has known since he was in his early twenties. “If you’d asked me in 2010 when we were all elected how British politics would go, I wouldn’t have called much [correctly], but if there was a suggestion as to who might be the first female chancellor, I think Rachel would have been in there.
“She’ll be a really significant person in British public life if she gets to be the chancellor. We are conscious that there are some historical tensions between the Department of Business and the Treasury… If there’s a policy question on my mind I might ring Rach and she’s thought about the same thing.”
Reynolds became a father at the age of 22, an event that shaped him (his son, Jack, has severe autism). “If you’re a young man, in particular, it makes you grow up quite a lot when you’re faced with some of those challenges.” Those who know Reynolds well attribute his even temperament to this experience (he has three other children with his wife Claire). “The three things that keep me broadly sane are family, faith and [the video game] Football Manager,” he said.
He describes himself as a Christian socialist and chairs the group Christians on the Left (his affectionate nickname inside Labour is “The Reverend”). “I’ve never had any problem in calling myself that, there’s a tradition there that goes back a very long way and is responsible for some of the best public policy innovations in British history.” Labour, as Reynolds rightly observed, has always “owed more to Methodism than to Marxism”.
As business secretary, he would take an interventionist approach: “It’s the job of government not just to respond to markets but to shape them.” The last Labour administration, he noted, lacked an explicit industrial strategy until Peter Mandelson ascended to Gordon Brown’s cabinet during the 2008 financial crisis.
Though Reynolds’ promise is one of stability, politics hampers this. On the day we met, the front page of the Financial Times read: “Labour’s reluctance to rule out capital gains tax rise stokes investment fears.” Will the party raise taxes once in office after discovering that the books are in a worse state than thought? “The books are in that state because growth has been so low, so we’re going to come into office and show as quickly as we can that we are materially improving the business environment,” Reynolds said, while emphasising that “Rachel shouldn’t be expected to write a whole Budget in opposition”.
Does he believe that wealth should be taxed at the same rate as work? (The top rate of income tax is 45 per cent, while capital gains are taxed at up to 24 per cent.) “It’s a conversation I’ve always been interested in but I think it is naive. There would be some incredible problems in the system if we taxed wealth on the same bands as income. It would be very difficult to see that working – there are some people who would be really strongly hit.”
On his wrist, Reynolds sports a tattoo of a worker bee, a legacy of the campaign to raise money for the survivors of the 2017 Manchester Arena bombing. After years of Tory inertia, it feels like a symbol of the industriousness that a new Labour government would need to stimulate growth. But Reynolds’s opening offer is, above all, one of normality.
“Most businesses, wherever they operate, attribute a degree of political risk to election outcomes. I would put it to you that the political risk for businesses in the UK today is not a change of government but a continuation of Conservative government – because the chaos that we’ve seen wouldn’t stop.”
[See also: Labour’s women problem]
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This article appears in the 26 Jun 2024 issue of the New Statesman, The Lammy Doctrine