The former Conservative donor who chairs Iceland supermarket has publicly backed Keir Starmer to be the next prime minister, saying the Labour leader understands how the cost of living crisis has put an “unbearable strain” on families.

Richard Walker, who quit the Tories last October after previously seeking to be a candidate, said he had reserved judgment on who to back at the next election but now believed that Labour and Starmer had a “credible programme” to improve the UK economy and people’s lives.

Walker’s change in allegiance comes after Labour put huge effort into wooing business leaders and persuading them that the party would not implement anti-business policies.

The party plans to hold a major business conference in central London, hosting leaders from companies including Google, Shell, AstraZeneca, Airbus and Goldman Sachs. More than 400 are expected to attend and the event sold out in four hours.

Writing for the Guardian, Walker, the executive chair of Iceland, said Starmer had moved closer to the centre while Rishi Sunak’s party had gone in a different direction and caused a “total collapse in public confidence” in the government.

He said he had met Starmer and that the Labour leader had demonstrated a “compassion and concern for the less fortunate” as well as an understanding of the cost of living crisis that had hurt his customers. Walker said he was particularly keen on change to regulation to allow promotions of and discounts on infant formula, which has soared in price during the cost of living crisis – a move that would overturn a ban put in place in order to avoid discouraging breastfeeding.

The businessman highlighted Starmer’s leadership qualities, saying he had “demonstrated this in the way in which he has transformed his own party by ruthlessly excising the Corbynite extremism that made Labour unelectable in 2019”.

Walker said he had not had a “radical change of heart” but that Starmer had “progressively moved towards the ground on which I have always stood, at the same time as the Conservatives have moved away from it”.

“Indeed, the Tories’ abandonment of what I have always regarded as basic Conservative principles has fuelled my personal disenchantment,” he added.

Walker said Labour’s missions were clear, while the Conservatives had presided over infighting, chaos and an “apparently endless churn of prime ministers, chancellors and secretaries of state”.

He said Rachel Reeves was a chancellor in waiting who understood the critical importance of wealth creation and that he believed the party would remove barriers in the planning system, as well as “breathing new life into our wearied high streets”.

Walker, who stressed that Iceland as a business was apolitical, said he did not agree with everything that Labour proposed, and that he would not became a party member. He is not understood to be planning to donate to the party.

However, he said he would support Labour at the next election and hoped that it would “deliver the majority they will need to begin delivering their recovery programme for the UK”.

Other business leaders are likely to follow Walker in switching allegiance to Labour as the election draws closer. Starmer’s party is still leading the polls by a large margin.

Ahead of Monday’s business summit, Jonathan Reynolds, the shadow business secretary, pledged to make it an annual event and promised to end the “VIP lanes” for contracts that gave preference to bidders with links to government figures during the pandemic.

“Labour is the party of business,” he said. “There will be no back doors or special access for donors under a Labour government. The public and honest businesses have had enough of Conservative sleaze and scandal. Labour will bring integrity back to how the government and business works together to solve the big challenges in our country. We will always treat taxpayer money with the same respect a businesses treats customers’ money.”

Earlier on Sunday, Reynolds stressed that the party’s commitment to increasing spending on green projects to £28bn by the middle of a parliament was not “the holy grail”, following speculation that it could be dropped after the budget.

He told Times Radio: “How much you can spend is determined by the health of the economy, and for us, our fiscal rules. We want to see UK government debt falling at the end of a parliament. I don’t want to be talking about a sum of money as being the holy grail in terms of investments.

“It’s about, over time, getting to that level of ambition, whilst making clear that how much you can spend, how much you can invest, is governed by your fiscal rules. It is opposition within the envelope of what the government are doing, because that’s your starting point. That is just the reality of opposition.”