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  1. The Weekend Interview
3 February 2024

“Sick to death of chaos”: Iceland boss Richard Walker on leaving the Conservatives

The businessman has turned against Rishi Sunak’s bonfire of a party.

By Will Dunn

In June 2023, Richard Walker had just returned from climbing Mount Everest. The climb would raise more than £1m for dementia charities – a cause that is important to Walker, who lost his mother to Alzheimer’s in 2021 – and the Iceland executive chairman was keen to plan his next step. He was already a Conservative Party member and donor, but in 2022 his links to the party became closer: he was appointed to Boris Johnson’s relaunched Business Council, spoke at the party conference, and was given a “comprehensive pass” to apply to be selected as a Conservative candidate in any seat.

Walker planned to apply to be selected as the candidate for Chester South and Eddisbury, where he has lived all his life and where he said he had the full support of the local Conservative association. However, some of his public positions on social issues weren’t to the central party’s liking. He was awarded an OBE for services to business and the environment in 2022, but as chair of Surfers Against Sewage his concern for water quality wasn’t in line with the government’s messaging. “I was directly told to pipe down about that,” he told me.

When Walker made comments to the media about the widespread use of food banks in the UK and the cost-of-living issues that affect his customers, a “very senior minister” asked to speak to him. “He said it wasn’t something he recognised from his own constituency,” Walker told me. “And after the meeting, I realised that his constituency is one of the richest in the UK.”

Word reached Walker that he was being “blackballed” by “someone in No 10”, and this seemed to be the case with his application for candidate selection, which was effectively frozen by a “deferment notice”. Local Conservatives wrote to the central party, but Walker remained in limbo. On his return from Everest, Walker decided to write to Rishi Sunak to ask why he was being “barred” from applying to be selected as a candidate. The letter, he said, “was hand delivered. I never received a response, but I know he got the letter – because instead of responding, he leaked it.”

The letter appeared online hours after Walker announced that he was leaving the Conservative Party. The party reportedly briefed that Walker had been “lobbying” senior figures to be allowed to apply, which he said is untrue; he claims he was simply trying to get a clear answer on a selection process that he describes as “opaque” and “undemocratic”.

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I met Walker this week at Labour’s annual business conference, at which 900 people from the UK’s largest companies had gathered to hear Rachel Reeves and Keir Starmer’s pitch for a more secure and predictable economy – as summed up by Reeves’s commitment, on the day, to maintain corporation tax at the same level throughout the next parliament. Three days earlier, Walker had publicly switched his support to Labour; he agrees with party’s position on the need for reform of business rates, which he describes as “the single biggest thing that we can do to help rejuvenate the High Street”.

The previous day, at Prime Minister’s Questions, Keir Starmer had lambasted the Conservative front bench for “laughing” as he tried to explain to them that one Iceland employee – Phil, from the Warrington store – found himself paying an extra £12,000 a year in mortgage payments. “Shame,” declared Starmer; the phrase “Phil from Iceland” began trending on social media.

Iceland, the supermarket chain of which Walker is the executive chair – his father opened the first store in Oswestry, Shropshire in 1970 – is a business at the sharp end of many of the issues that have defined British politics in recent years. Many of its more than 1,000 stores are to be found in the former “Red Wall” seats of the Midlands and the north. Its prices are highly competitive, and pensioners and working-class people are well represented in its customer base.

When inflation began to accelerate in 2022, the Iceland shopper was particularly exposed. Basic foods – of which energy is the greater cost component – rose fastest in price. The average bag of pasta increased by 60 per cent in a year, and milk (of which a four-pint bottle is Iceland’s biggest-selling item) rose 38 per cent. More than a third of Iceland’s food is frozen, and the chain has the highest energy costs per square foot of any supermarket. Walker describes the chain’s electricity bill last year as “horrific… I had sleepless nights about it”. In a February 2023 survey by Retail Gazette, Iceland’s prices were found to have risen by over 10 per cent in a year – more than twice the rate of Tesco. Did he do enough to keep prices low?

“We absolutely did everything we could,” he told me; he said he disagrees with the survey, which used branded goods – “for which we are not the cheapest” – rather than representing the typical Iceland shopper’s basket of own-brand frozen food. He pointed to initiatives Iceland developed at this time: a 10 per cent offer for people aged over 60, which he said millions of people have used and which was developed after his team saw a news story about a pensioner riding the bus all day because she couldn’t afford to heat her home. Similarly the Iceland Food Club, a system of small, interest-free loans to customers, was “a direct response to the cost-of-living crisis”. Walker told me the scheme has loaned £6m and “helped over 28,000 families”.

I asked Walker why, given his concern for the social responsibility of his business, he doesn’t pay his staff more: Iceland guarantees “at least the national minimum wage” (currently £10.42 per hour) for shop-floor workers, while Tesco and Sainsbury’s have paid over £11 per hour for the past year. Walker said this gap will close when the new minimum wage (£11.44) arrives in April, and that Iceland makes up for it by being a better employer overall: it does not use zero-hours contracts, staff get a permanent 15 per cent off on all food, and receive vouchers and other benefits. In 2012 and 2014 Iceland was named the best big company to work for in a national survey. “We’re a fairly low-paying, discount, northern-based food retailer,” he told me, and he remains proud that in these employee surveys they came top, just above Goldman Sachs.

But it is in the chain’s environmental record that Walker’s presence is most obvious, from its campaigns on plastics and palm oil to its use of renewable energy. It was this, too, that was the final straw in Walker’s time with the Conservative Party: having been embarrassed rather than humiliated in the Uxbridge and South Ruislip by-election, Sunak gave a speech on 20 September that abandoned many of the government’s commitments on net zero and claimed to address policies that were obviously fictional, including a tax on meat and a requirement to sort rubbish into seven different bins. “I never thought the environment would be used as a political wedge issue in this country in the way that Donald Trump obviously uses it in the US,” Walker told me. “That’s something that, until that that speech that Rishi gave, we had avoided – and now he’s weaponising it.”

Walker said he will not be the last Tory donor to leave. He has spoken to other significant donors, he told me, who are considering abandoning the party or planning to do so, as well as “plenty of businessmen and -women who are sick to death of the lack of stability, the chaos, and the unedifying infighting” in the Conservatives. He gestured to the conference around us, which – at £995 a ticket – sold out within minutes: “And I think people naturally want to align themselves with the next government.”

[See also: Liam Byrne: “New Labour economics is history”]

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