Labour’s UK Business Push Fails to Allay Concerns about Policy Indifference

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(Bloomberg) — British businesses have one major concern about Prime Minister Keir Starmer: Nearly three months into office, there is still a lack of detail on how his new Labor administration plans to fire up the UK economy.

Corporate leaders turned out in droves at Labour’s annual conference in Liverpool this week, after the long-time opposition party stormed into the July 4 general election. That’s not only a testament to Labour’s return to power after 14 years in contention, but also how Starmer has transformed the party. to bid on UK Plc after his left-wing predecessor Jeremy Corbyn became increasingly anti-business over tax and tariff plans in the country.

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“We campaigned as a pro-business party and we will govern as a pro-business party,” Commerce Secretary Jonathan Reynolds said Monday in his conference speech. “We cannot provide for the British people, unless we turn around the low investment, low productivity, slow growth economy that we have 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 a potential tax on capital gains and the wealthy in Chancellor of the Exchequer Rachel Reeves’ Oct. 30, after he confirmed in the summer that he was looking to raise taxes to help plug a £22 billion ($29) billion) fiscal hole.

“Fixing the next six weeks, I feel, will be very important for people interested in investing here, or attracting foreign investors,” Lloyd’s of London Chairman Bruce Carnegie-Brown told Bloomberg Radio at a conference.

Reeves and Starmer said promoting economic growth is a key goal of their administration and stressed that attracting private capital will be key to achieving that goal. In his conference speech on Monday, the chancellor outlined plans that could unlock billions of pounds of investment as he promised to present a budget that showed “real ambition.”

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But business executives on the sidelines of the conference – many of whom spoke to Bloomberg on condition of anonymity to discuss critical views on the new government – expressed caution about Labor’s plans and cited areas where they still wanted clarification.

Another banking official said there are still a few weeks left before tax and other policy priorities are clear and allow companies to make plans. One business leader said Labour’s economic announcements so far have been headlines with empty papers behind them. They criticized Starmer’s failure to quickly appoint a dedicated investment minister.

A third official, who works for one of the biggest drinks companies, said they liked Labour’s pro-business message but were worried that Reeves would shake them up by stepping up to the brewery in the budget.

“They’ve had a good start setting their agenda, but now everyone’s waiting for the budget, and the investment conference and the Mansion House speech,” said Tiina Lee, chief executive of Citi UK, referring to a major investor meeting on October 14 and Reeves’ speech next year. to the City, the date of which has not yet been announced.

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Reynolds addressed some of the industry’s specific concerns during a so-called business day at the party’s conference, whose attendees included executives from HSBC, Google and Blackstone. Tickets for the event cost £3,000 and sell out within 24 hours. The minister said senior management should not doubt Labour’s business orientation and that details of the planned industrial strategy would be available soon.

Employees are “clearly committed to removing barriers to business activity,” he said. “It’s a very compelling gift.”

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Many officials at the conference expressed hope for the new government’s work done so far. Keith Anderson, chief executive of Scottish Power, said Labour’s energy policy had already made significant strides in key areas such as a commitment to reform, compared to the previous government.

“For years and years, we talk about planning, or how we can decide things quickly,” Anderson told Bloomberg. There is evidence that the new management “will be serious,” he said, adding that Spanish Power’s Scottish Power owner Iberdrola would like to farm more in the UK.

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Another official said that they are happy that Reeves has committed to paying the corporate tax in this Parliament. They also welcomed proposals for industrial strategy and to facilitate more construction by rolling back red tape.

Citi’s Lee said the bank’s international clients valued the stability the new UK government had brought. As well as attracting overseas investors, the biggest challenge will be to launch billions of pounds of pension funds and other UK savings into long-term projects, he said.

‘Rich Nature’

Starmer himself closed the event with corporate leaders by talking about his business agenda and the idea that his greater electoral authority will lead to better long-term decision-making.

“We can make decisions based on years rather than months,” he said. “There will be a much richer investment environment if we clarify the investment conditions.”

But whether that becomes a reality remains a question for UK plc – and Conrad Ford, chief strategy officer at UK fintech Allica Bank, said companies need to hear more.

“What everyone wants are signs that talk about growth can be turned into action,” Ford said. “That workers are really willing to support the creators of the country’s wealth.”

—Courtesy of Caroline Hepker and James Woolcock.

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