The approach of business to general elections is not what it was.
Not that long ago, it was common for big corporates to make donations to political parties, including big FTSE 100 names such as SmithKline Beecham, United Biscuits, General Accident and Whitbread.
Most of these donations would go to the Conservatives but there were some companies, such as Marks & Spencer and Pearson, which also made donations to other parties.
Some, such as Hanson – whose founder Lord Hanson was a loyal supporter of Margaret Thatcher – continued to do so even after the 1992 Cadbury Report recommended companies stop making contributions to political parties.
Even after the political contributions dried up, FTSE 100 chief executives were not shy about endorsing or criticising politicians at election time.
In 1997, a number of well-known business people including Robert Ayling of British Airways, Bob Bauman of the old British Aerospace (now BAE Systems) and George Simpson of GEC endorsed Tony Blair’s Labour ahead of that year’s election, while John Major’s Conservatives also had plenty of backers.
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Business people were also happy to speak out about particular policies. Ahead of the 1997 election, BT’s chairman, Sir Iain Vallance, lashed out at Labour’s proposals for a windfall tax on the privatised utilities while Brian Stewart, chief executive of the pubs and brewing giant Scottish & Newcastle, criticised Labour’s plans to create a Scottish Parliament with tax-raising powers.
None of that happens any more. Most CEOs, while having their own political opinions like the rest of us, prefer to keep them to themselves. The more astute, realising that it makes sense to speak to politicians, are careful to ensure they are seen to be behaving even-handedly and not expressing a preference for one side or the other.
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Business wish-lists
That does not mean businesses do not have their own wish-lists of policies.
This is particularly true of small businesses. Their wish-list has not changed in the last couple of decades and is topped by wanting a change in the law to enforce prompt payments from larger businesses to their suppliers and the reform of business rates, which is also a bugbear for larger companies in sectors such as retail and hospitality.
Higher up the corporate food chain, what big businesses crave most is clarity and consistency in policy.
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As Dame Amanda Blanc, chief executive of insurance, savings and pensions giant Aviva, told Sky News today: “Obviously we’re apolitical. What we want is for the environment to be one where we can invest, with certainty. You know, we want consistency and stability and so that whoever is the winner of the election, we want the election to be decisive, and we really want there to be certainty for us to be able to invest in things like UK infrastructure.”
Dame Amanda, who has served on both the prime minister’s business council and on the business taskforce put together by shadow chancellor Rachel Reeves, added: “We’ve invested £9.5bn in UK infrastructure in the last three years.
Image: Dame Amanda Blanc has been chief executive of Aviva since July 2020.
“Our commitment is £25bn over the next 10 years. In order to do that, you have to have a more certain environment. And so that’s what we look forward to.”
That desire for stability and consistency was why the brief tenure of Liz Truss in 10 Downing Street was so damaging and why, off the record, a lot of business executives will admit to being grateful to Rishi Sunak and Jeremy Hunt for restoring order to public finances after the firestorm created by Kwasi Kwarteng’s mini-budget in September 2022.
They feel it is the first time, since David Cameron was in office, that a PM had the corporate world’s back. Theresa May alienated a lot of globe-trotting CEOs with her infamous 2016 speech in which she said “if you believe you are a citizen of the world, you are a citizen of nowhere”. She was replaced by Boris Johnson who, as foreign secretary in 2018, infamously said “f*** business.” And then came Ms Truss.
If business leaders are grateful to Messrs Sunak and Hunt, there is also warmth towards Sir Keir Starmer and Ms Reeves for their constructive approach.
Yes, there is some unease about deputy Labour leader Angela Rayner’s proposals to ban zero-hours contracts, end fire and rehire and to give workers full rights and protections from day one of their employment.
But there is a sense that after the leadership of Gordon Brown, Ed Miliband and Jeremy Corbyn, who went into the 2019 election campaign threatening to nationalise much of the energy industry, the water industry and BT’s broadband network, this is the most pro-business Labour leadership since the days of the much-missed Tony Blair.
While big businesses chiefly seek stability and consistency of policy, that is not to say they do not have specific wish-lists of their own.
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The big leisure, hospitality and luxury goods companies would like the restoration of VAT-free shopping for international visitors, the loss of which, they argue, has driven business away from the UK to destinations like Paris and Milan.
Most businesses with property interests – which is nearly all of them – would like to see a more coherent planning regime. Housebuilders would like a relaxation of rules requiring a proportion of housing developments are devoted to affordable homes.
Shoplifting scourge
Retailers would like the police to be required to make tackling the scourge of shoplifting a greater priority.
Manufacturers, in particular, would like to see an easing to some trade frictions that have built up since Brexit.
And carmakers – currently under threat of being fined if a certain proportion of their sales are not electric vehicles – would like to see a restoration of government incentives to buy EVs and for the roll-out of EV charging points.
Businesses, it is often pointed out, do not have votes.
But they do create the jobs and wealth on which this country relies. Those hitting the campaign trail over the next six weeks will need no reminding of that.
Donald Trump has revealed a list of more nations set to face delayed ‘liberation day’ tariffs from 1 August.
He has threatened tariffs of 30% on Algeria, 25% on Brunei, 30% on Iraq, 30% on Libya, 25% on Moldova and 20% on the Philippines. Sri Lanka was later told it faced a 30% duty.
Letters setting out the planned rates – and warning against retaliation – are being sent to the leaders of each country.
They were the latest to be informed of the president‘s plans after Japan and South Korea were among the first 14 nations to be told of the rates they must pay on their general exports to the US from 1 August.
The duties are on top of sectoral tariffs, covering areas such as steel and cars, already in place.
Mr Trump further warned, on Tuesday, that a 50% tariff rate on all copper imports to the US was looming.
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He has also threatened a 200% rate on pharmaceuticals and is also expected to take aim at all imports of semiconductors too.
The European Union, America’s largest trading partner in combined trade, services and investment, is expected to get a letter within the next 48 hours unless further progress is made in continuing talks.
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Who will be positively impacted by the UK-US trade deal?
The bloc, which Mr Trump has previously claimed was created to “screw” the US, has been in negotiations with US officials for weeks and working to agree a UK-style truce by the end of the month.
The EU has retaliatory tariffs ready to deploy from 14 July but it is widely expected to delay them until such time that any heightened US duties are imposed.
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Trump to visit UK ‘in weeks’
It remains hopeful of a deal in the coming days but European Commission president Ursula von der Leyen told the European Parliament: “We stick to our principles, we defend our interests, we continue to work in good faith, and we get ready for all scenarios.”
While the UK’s so-called deal with Mr Trump is now in force, it remains unclear whether steelmakers will have to pay a 50% tariff rate, deployed by the US against the rest of the world, as some final details on an exemption are yet to be worked out.
The value of its shares has risen by 409,825% since its market debut in 1999.
Its status has been cemented thanks to the rush for AI technology – suffering several wobbles along the way – but nothing significant when you refer to the percentage rise of the past 26 years.
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The most recent pressures have come from the emergence of the low-cost chatbot DeepSeek and concerns for global AI demand as a result of Donald Trump’s trade war hitting growth.
Financial markets have been taking a more risk-on approach to the trade war since the delays to “liberation day” tariffs in April.
It’s explained by a market trend that’s become known as the TACO trade: Trump always chickens out.
Image: The milestone is reported by Sky’s US partner CNBC, seen on screens at the New York Stock Exchange. Pic: Reuters
It has helped US stock markets post new record highs in recent days.
The wave of optimism is down to the fact that the president is yet to follow through with the worst of his threatened tariffs on trading partners.
Corporations are also yet to report big hits to their earnings – a fact that is also propping up demand for shares.
If Mr Trump does go all-out in his trade war, as he has now threatened from 1 August, then that $4trn market value for Nvidia – and wider stock markets – could be short-lived, at least in the short term.
But market analysts believe Nvidia’s value has further to go.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said of its meteoric rise: “Once known for powering video games, NVIDIA has transformed into a foundational player in AI infrastructure.
“Its high-performance chips now drive everything from natural language processing to robotics, making them essential to training and deploying advanced AI models.
“Beyond hardware, its full-stack ecosystem – including software platforms and developer tools – helps companies scale AI quickly and efficiently. This end-to-end approach has positioned Nvidia as a cornerstone in a market where speed, scalability, and efficiency are critical.”
He added: “The key question is where it goes from here, and while it might seem strange for a company that’s just passed the $4trn mark, Nvidia still looks attractive.
“Growth is expected to slow, and it’s likely to lose some market share as competition and custom solutions ramp up. But trading at a relatively modest 32 times expected earnings, and over 50% top-line growth forecast this year, there’s still an attractive opportunity ahead.
“For investors, it remains a compelling way to gain exposure to the AI boom – not just as a participant, but as one of its architects.”
The future of the UK economy is weaker and more uncertain due to President Trump’s tariffs and conflict in the Middle East, the Bank of England has said.
“The outlook for UK growth over the coming year is a little weaker and more uncertain,” the central bank said in its biannual health check of the UK’s financial system.
Economic and financial risks have increased since the last report was published in November, as global unpredictability continued after the announcement of country-specific tariffs on 2 April, the Bank’s Financial Stability Report said.
These risks and uncertainty, as well as geopolitical tensions, like the wars in Ukraine and the Middle East, are “particularly relevant” to UK financial stability as an open economy with a large financial sector, it said.
Pressures on government borrowing costs are “still elevated” amid significant doubts over the global economic outlook.
Had a 90-day pause on tariffs not been announced, conditions could have worsened, the report added.
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The chance of prices rising overall has also grown as tensions between Iran and Israel and the US threaten to push up energy prices.
Possible higher inflation in turn raises the prospect of more expensive borrowing from higher interest rates to bring down those price rises. This compounds the pressure on state borrowing costs.
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Trump’s tariffs: What you need to know
Mortgages
Borrowing costs for about 40% of mortgage holders are set to become costlier over the next three years as households refix to more expensive deals, affecting 3.6 million households, the Bank said.
Many homes have not refixed their mortgage since interest rates began to rise in 2021, meaning the full impact of higher rates has yet to filter through.
Those looking to get on the property ladder got a boost as the Bank said lenders could issue more loans deemed to be risky, meaning people could be able to borrow more.
Financial institutions can now have 15% of their new mortgages deemed risky every year, up from the current 9.7%.
Riskier mortgages are those with a loan value above 4.5 times the borrower’s income.
Be ‘prepared for shocks’
Despite the global and domestic economy concerns, the outlook for UK household and business resilience remained “strong”, the Bank said.
Investors, however, were warned that there could be “sharp falls in risky asset prices”, which include shares and currencies.
If there are any vulnerabilities in non-bank lenders, it “could amplify such moves, potentially affecting the availability and cost of credit in the UK”.
“It is important that in their risk management, market participants [people involved in investing] are prepared for such shocks.”
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The steep market reaction following the tariff announcements in April “highlights that the interconnectedness of global financial markets can mean stress from one market can move quickly to others,” the report said.
Overall, though, “household and corporate borrowers remain resilient”, the Bank concluded.