Loading
Investor summitsGYour browser does not support the element. follow a standard recipe. First come the speeches. The 200-odd executives who made it to an international investment summit in London on October 14th heard from Sir Keir Starmer, the prime minister, that after almost a decade of political turmoil in Britain, stability has returned. Labour’s landslide majority on July 4th means that the government’s decisions can be “measured in years, not months”, Sir Keir told in an interview. Then comes the glitz. Delegates were whisked to St Paul’s Cathedral, to be greeted by Charles III and serenaded by Sir Elton John, a musician.Conferences, kings and cathedrals get you only so far, however. What is the new government’s actual pitch to investors? The answer is a bit like Sir Keir himself: a mixture of the sensible, the potentially radical and the frustratingly unclear.First, the sensible. To make life as easy as possible for investors, the government wants to create a “concierge” service. That is in line with the recommendations of Richard Harrington, a Conservative peer, who in a report last year warned of deals being scotched because of a “disorganised, risk-averse, siloed and inflexible” Whitehall. Poppy Gustafsson, a former boss of DarkTrace, a cyber-security firm, has been belatedly appointed as investment minister; the Office for Investment, a unit of government, will be enlarged and plugged into Number Ten, the Treasury and other Whitehall departments.“I want a central place where investors can go and say, right, this is the door through which I walk,” says Sir Keir. “Under the last government, every time they finally got to the right door, there’d be somebody else behind it.” To make a one-stop-shop work, Lord Harrington notes, the minister will need the clout to extract visas, grants and other goodies from across government. Will Ms Gustafsson have that authority? “Absolutely,” says Sir Keir. “Not just from my office, but from me, because this is our number-one mission.”Stop the political somersaults, rationalise Whitehall and give investors a number to call: all of this is conventional and reasonable. But Sir Keir is also capable of boldness. If the new government has a guiding philosophy, it is an idea in vogue among the centre-left known as “productivism”. It holds that Britain’s congenitally low rate of —the country has been bottom of the 7 rankings for 24 of the past 30 years, according to the Institute for Public Policy Research, a think-tank—is at the root of its weak productivity growth. Fixing this problem implies expanding the productive capacity of the economy, and particularly what Sir Keir terms “the fundamentals” of housing, transport and energy.On Britain’s , Sir Keir’s rhetoric has, if anything, become more radical since taking office. “It’s just too slow, and it’s got to be stripped down,” he says. “[Investors] don’t have to invest in this country. They have choices.” He urges backers of schemes mothballed under the previous government to resubmit them for review. He wants a new planning framework and a change of mindset. “For urban housing, we need to get to a position where there’s a default position of ‘yes’ and we can move forward at pace. But for all projects, I want there to be confidence that the planning rules will be simpler, faster, and that even if it’s a ‘no’, it’s a quick ‘no’, not a slow ‘no’.”There is more than a touch of Thatcherism to this. “There’s too much regulation, and it’s inconsistent, different regulatory bodies pulling in different directions,” he says. But in one area at least, Sir Keir is a fan of making more rules. For 40 years Britain’s relatively liberal labour market has been regarded by successive governments as a draw for investors. This one is heading in the opposite direction. On October 10th it published an of striking width, combining plans for new individual rights (such as an obligation on employers to protect employees from harassment) with lower thresholds on union recognition and industrial action.The risk, aired by some business lobbies, is that the bill chills hiring; many of its provisions are subject to further consultation. But Sir Keir argues that these reforms are in the long-term interests of investors themselves if giving people more secure working conditions helps tame populist discontent. “The values that we’ve had as a country as a sort of open, trading country that the investors here know and understand…are under threat politically with populism, which is bearing down on those values. So, yes, this is an economic argument for the better of the country to make people better off, but it is also a fight for the values of freedom and democracy that we fundamentally believe in.”That argument may not cut much ice with the moneymen. Although the summit went well, verdicts on the party’s first 100 days in office are varied. In opposition the party courted businesses with the promise of tight co-operation. Many now report frustration at ministers being harder to reach than promised, and at an undercooked policy agenda. “We expected a much more hit-the-ground-running approach from Labour,” says one City figure.Conclusive judgments will be reserved until after the budget that will be unveiled by Rachel Reeves, the chancellor, on October 30th. Prior to the election Labour promised higher levies on private schools, private equity and non-domiciled residents. To make its sums add up, the government will need to raise other taxes; these may include a higher rate of capital-gains tax (which is paid on the sale of assets), employer payroll taxes or tweaks to the inheritance-tax regime. Surveys show that business confidence has become more fragile since the election.“We’ve had to be clear that it’s going to be a tough budget,” says Sir Keir. “The reason we’re doing it is to ensure that we clean the slate and there’s economic stability. That is what investors want to hear.” At St Paul’s attendees were cooked for by Clare Smyth, a Michelin three-star chef. The dinner was doubtless delicious. The aftertaste will only emerge at the end of the month.
