John Caudwell, the billionaire founder of Phones4U and one of Labour’s most high-profile business backers at the last election, has declared there is “no chance” he will vote for the party again, and revealed he is in talks with the Conservative shadow cabinet about a possible return to the Tory fold.
In a candid interview with Business Matters, the entrepreneur and philanthropist said he had been “misled” by Sir Keir Starmer’s pre-election pledge to lead “the most pro-business government this country has ever seen”, and predicted Labour is now “without doubt” heading for defeat.
“I was misled. I don’t know whether it was deliberately misleading, I’m not going to accuse them of deliberately misleading me or the rest of business, but I was misled, because they’ve not done what they said they were going to do,” he said. “Before the election, they sounded like the Tory party on steroids. It was just growth, growth, growth.”
Caudwell’s disillusionment carries particular weight because of the journey he has made. A long-standing Conservative donor who gave £500,000 to the party under Boris Johnson, he made headlines when he switched his allegiance to Labour ahead of the 2024 general election, convinced that Starmer’s party offered the best prospect of growing the economy.
“They’ve not done that at all,” he now concedes.
The billionaire points to a succession of policies he describes as “misguided”, chief among them the increase in the minimum wage and the abolition of the non-dom regime, which critics say has fuelled an exodus of wealthy taxpayers far worse than the Treasury forecast.
“Labour has really not delivered what they said they were going to do, and it’s going to be a disaster for the long-term future of Britain,” he said. “I don’t see that Labour are going to change course. I think without doubt, with everything that they’ve done now, they’re going to lose the next election.”
Asked whether he could ever vote Labour again, his answer was unequivocal: “Based on what I’ve seen up to yet, there is no chance, no chance at all. They’ve let me down massively.”
Starmer’s grip on Downing Street has loosened following heavy Labour losses at the local elections, with Greater Manchester mayor Andy Burnham and former health secretary Wes Streeting both circling ahead of a potential leadership contest.
Caudwell, however, is unmoved by the alternatives on offer, dismissing them as “more of the same”. “I think Wes Streeting is a very personable guy, but we need another radical change, I’m afraid,” he said.
The Phones4U founder is set to meet members of the Conservative shadow cabinet in the coming weeks, and has already held what he describes as productive talks with shadow business secretary Andrew Griffith.
“Andrew sends me a text message nearly every morning, and up to now I’ve agreed with everything he said,” Caudwell said.
He plans to vote Conservative at the next election if the party assembles a “really strong” shadow cabinet, and did not rule out reopening his chequebook if the contest came down to a three-way fight between the Conservatives, Labour and Reform.
“Would I vote for the Conservatives again? Certainly, I could vote for them again. Would I donate again? I think it’d depend on the political scenario. If I absolutely believed in the Tories, I might be persuaded to donate,” he said.
One door, though, remains firmly shut. Caudwell said he “could not possibly” vote for Nigel Farage’s Reform UK, citing his conviction that climate change is “the biggest challenge going forward”.
A government spokesperson defended its economic record, saying: “This government has the right economic plan, which is why we were the fastest-growing European economy in the G7 last year, signed our fifth major trade deal with the Gulf, and our Industrial Strategy is unlocking billions in investment to support thousands of jobs.
“We know some businesses are facing a challenging time, but are backing them through our Small Business Plan, including a £4bn access-to-finance boost for SMEs, taking tough action on late payments and a £4.3bn business rates support package.”
Caudwell founded Phones4U in 1987 and sold his business group for £1.5bn in 2006. His departure from the Labour camp follows a wider pattern, with the 2026 Sunday Times Rich List recording an accelerating exodus of Britain’s billionaires since the government’s tax reforms took effect.
On Wednesday, Caudwell will mark the opening of Le Provençal, a £300m complex of luxury residences on the French Riviera that he has been developing for decades.
