Labour's charm offensive in the City fizzles out

Ed Miliband's long awaited charm offensive in the City of London barely lasted a day. After attempting to woo business figures with a speech at Bloomberg's headquarters, the Labour leader moved on to more familiar territory on Tuesday by setting out plans to crack down on zero hours contracts.

By Wednesday, 103 executives had hit back with an anti-Labour letter in The Daily Telegraph endorsing the government's cuts in corporation tax and warning that "a change in course" would jeopardise the recovery.

The signatories included chief executives of nine FTSE 100 companies, such as Bob Dudley of BP and the outgoing Tidjane Thiam of Prudential, as well as a handful of former Labour supporters such as Sir Charles Dunstone, the chair of Dixons Carphone. Perhaps most embarrassing was the name of Peter Grauer, chairman of Bloomberg - Mr Miliband's hosts on Monday.

Mr Miliband's initial response appeared to be to ignore the letter: aides said this was merely "nothing new". But the Labour leadership then went on the attack. It pointed out that a third of the signatories had donated more than £9m to the Conservatives - and 18 had received honours including peerages.

Labour peer Lord Prescott branded the business chiefs "tax dodgers, Tory donors and non doms".

In a symbolic move the party later co-ordinated a letter to the Mirror with 100 Labour supporters from all walks of life, including some business people.

George Osborne, the Tory chancellor, described the Telegraph letter as an "unprecedented intervention" in the economic debate.

"Their message is positive, we have an economic plan . . . their warning is stark: a change of course will threaten people's jobs," he said.

Tory aides under co-chairman Lord Feldman had been working on the letter for several months as a key plank in the election campaign.

The letter included signatories linked to the fashion and luxury goods world in which Samantha Cameron moves, such as Anya Hindmarch, the luxury handbag designer and Chrissie Rucker, the founder of the White Company.

Labour had certainly been anticipating it, with one party aide describing it as "part of the script".

For months the party has sought to neutralise business hostility with warm noises about infrastructure and skills, but it has been braced for a backlash for years.

Labour and big business have reverted to traditional dividing lines since the New Labour era: 86 per cent of FTSE 100 leaders are Tory supporters against 55 per cent who backed Labour during the Blair years, according to Ipsos Mori.

But some are nervous that business hostility will harm the party in the run-up to May. Douglas Alexander, the election campaign chief, believes Labour must learn the lesson from the Scottish referendum when interventions from corporate figures tipped the balance.

"Labour is already 20 percentage points off in the polls on the economy and yet their reaction to the letter is to just going to keep this row going," said a Tory aide.

Meanwhile Ed Balls, shadow chancellor, has refused to match the Conservatives' "unfunded" plan to raise to £50,000 the threshold for the 40p tax rate, prompting Mr Osborne to claim that Labour would hit middle Britain.

"What I would like to do is find ways in which I could have fewer people in the 40 per cent tax bracket," Mr Balls said. "Of course I would. But I have to be honest with people. The deficit is going to be £90bn." Labour denied Mr Osborne's claim that it would cut the 40p tax threshold.

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation