At first glance, the week started off quite well for Rishi Sunak. On Monday, the British Prime Minister received business bosses from all over the world at Hampton Court Palace, Henry VIII’s former favorite palace in southwest London. The guest list read like this who’s who the global financial elite: Stephen Schwarzman from Blackstone, Jamie Dimon from JP Morgan, David Solomon from Goldman Sachs. They were all invited to the British government’s “Global Investment Summit”. Host Sunak visibly felt comfortable, as he used to be an investment banker himself.
And yet the Prime Minister’s mood may not have been the best after it became known that a good 30 of his 200 guests had already met his fiercest competitor before the summit: Keir Starmer. There is a photo that shows the Labor leader in the Ernst & Young office in the City of London, with the company bosses sitting in front of him at breakfast. For Sunak, the image was an affront. What is currently happening can hardly be shown much more clearly: the economy is preparing for a possible change of government in London.
Of course, no one knows whether this will happen, but one thing is certain: since Sunak took office in Downing Street, his Tories have been consistently 20 percentage points behind Labor in the polls. No wonder Sunak is coming under increasing pressure. A new lower house will be elected in January 2025 at the latest, probably earlier. In Great Britain, the Prime Minister decides exactly when.
Labor now has a candidate who won’t scare off the bosses
One thing in particular has changed compared to the previous election in 2019: Labor now has a candidate who does not scare the economy. Keir Starmer has removed his predecessor Jeremy Corbyn’s nationalization plans from his program, as well as the promises of social benefits that cannot be financed. Many business representatives consider Labor to be electable again. Officially, the entrepreneurs and company bosses are keeping a low profile, but the prospect of a Prime Minister Starmer is giving them all sorts of things to talk about.
For example on Tuesday evening in London. The automobile association SMMT invited people to dinner at a hotel on Park Lane, just opposite Hyde Park. Dress code: Black tie. There is time for small talk at the reception before dinner. A car executive who did not want his name quoted said: “Let’s see what happens in Westminster next year.” You have to prepare for everything, and that includes establishing communication channels with Labor. What a possible Prime Minister Starmer means for the car industry is not yet clear, but the industry is already trying to find out what could lie ahead.
Just in September, Sunak caused a lot of unrest with his decision to postpone the ban on the sale of new petrol and diesel cars from 2030 to 2035. It has deprived the industry of what it urgently needs: planning security. We hear from Labor that Starmer wants to reverse Sunak’s decision if he wins the election. The car manager sees it this way: “We may have to prepare for another U-turn.” Nobody can know what is coming. But well, that’s how it was after Brexit, he says, and shrugs his shoulders.
Is immigration good or bad now? Sunak has no clear answer to this
Brexit. Most Brits can no longer hear the B-word. Neither does Chris Hayward. He is Policy Chairman of the City of London Corporation and is essentially responsible for ensuring that the British capital remains Europe’s most important financial center. Hayward welcomes in his office at the Guildhall in central London. He says: “The B-word has to go.” The separation from the EU was painful, but now it is important to rebuild trust. From Hayward’s perspective, things have improved since Sunak became Prime Minister. But there is still a lot to do, especially in areas where there could be greater collaboration, be it in AI or green finance.
When Hayward talks about the state of his country, he sometimes sounds like the prime minister. He says that high inflation is not just a British problem, but a global one. He doesn’t say that inflation, at 4.6 percent, is not as high in any G-7 country as it is here. Sunak also follows this motto. At his investment summit at Hampton Court Palace, he painted the present and the future in the most beautiful colors.
The Prime Minister promoted a new visa that would allow graduates of the world’s top 50 universities to move to Britain with their families for two years. “There is nothing like this anywhere else in the world and it says everything about our innovation, growth and entrepreneur-friendly philosophy.” And to the assembled business elite he said: “This is the opportunity that exists here in Great Britain and that is why you should believe me when I say that this is the best country in the world to invest and do business make.”
So that’s what he sounds like Sales pitch of a prime minister who used to raise money for hedge funds. The only problem is that potential interested parties don’t know whether they can really buy into Sunak’s cosmopolitanism. When the latest immigration figures were published last week, the Prime Minister sounded completely different. “The numbers are too high,” he said and promised to do everything he could to ensure that fewer people come into the country in the future – including through legal channels.
The biggest problem is the high cost of living
Between June 2022 and June 2023, a total of 672,000 people immigrated to Great Britain. That was significantly more than in the same period last year, when the number was 607,000 people. Sunak is therefore under great pressure, after all, one of the Brexit promises was to reduce immigration. The right wing of the Tories in particular is pushing for stricter measures to be implemented.
So what to do? Luke Tryl works at More in Common, an organization that studies sociopolitical developments. A week ago he published a campaign study entitled “The British and the Economy” published. Tryl came to the conclusion that politics simply cannot please people. The majority of those surveyed were in favor of higher public spending, but at the same time in favor of reducing national debt.
The longer you listen to Tryl on a video call with several media outlets, the more you get the impression that there is a lot of disillusionment with politics. And there is one problem above all that concerns people: the high cost of living. When asked whether they had more confidence in the Tories or Labor cost of living crisis The answer from those surveyed was strikingly clear: 60 percent voted for Labor, only 40 percent for the Tories.