Chancellor of the Exchequer Rachel Reeves (left) and Prime Minister Keir Starmer. — Bloomberg
LONDON: British businesses have one key concern about Prime Minister Keir Starmer: Almost three months into his tenure, there’s still a dearth of details about how his new Labour administration plans to get the UK economy firing.
Corporate leaders showed up in their droves to Labour’s annual conference in Liverpool this week, after the long-time opposition stormed to a landslide in the July 4 general election.
That’s testament not only to Labour’s return to power after 14 years in opposition, but also to how Starmer has reformed the party to appeal to UK Plc after his left-wing predecessor Jeremy Corbyn largely antagonised business with tax and nationalisation plans.
“We campaigned as a pro-business party and we will govern as a pro-business party,” business secretary Jonathan Reynolds said in his conference speech.
“We cannot deliver for the British people, unless we turn around the low investment, low productivity, low growth economy which we inherited.”
Yet despite that improved relationship, business executives are waiting for concrete answers on how Starmer plans to reshape Britain.
Meanwhile, speculation is rife about potential levies on capital gains and wealthy people in Chancellor of the Exchequer Rachel Reeves’s budget on Oct 30, after she all but confirmed over the summer that she’s looking to raise taxes to help plug a £22bil financial hole.
“Getting the next six weeks right, I feel, will be really important to people interested in investing here, or to attract people from outside,” Lloyd’s of London chairman Bruce Carnegie-Brown said.
Reeves and Starmer have said that promoting economic growth is the chief aim of their administration and stress that attracting private capital will be key to achieving that goal.
In her conference speech on Monday, the chancellor hinted at plans that could unlock billions of pounds of investment as she promised to deliver a budget showing “real ambition”.
But business executives on the sidelines of the summit expressed caution about Labour’s plans and cited areas where they are still seeking clarity.
One banking boss said there was a void of several weeks before the important issues of tax and other policy would become clear and allow companies to make plans.
Another business leader said Labour’s economic announcements so far amounted to headlines with blank pieces of paper behind them. They criticised Starmer’s failure to swiftly appoint a dedicated investment minister.
A third executive, who works for one of the world’s largest drinks companies, said they liked Labour’s pro-business message but were worried Reeves would sting them with a hike to alcohol duty at the budget.
“They have made a good start in setting out their agenda, but now everyone is waiting for the budget, and the investment summit and the Mansion House speech,” said Tiina Lee, chief executive officer of Citi UK, referring to a gathering of investors on Oct 14 and Reeves’s upcoming annual address to the City, for which no date has yet been announced.
Reynolds addressed some of the industry’s concerns directly during the so-called business day at the party conference, whose attendees included, among others, executives from HSBC, Google and Blackstone. — Bloomberg
