City ‘stands ready’ to work with new Labour government on growth
Business lobby groups and Canada have said the sector “stands ready” to work with Keir Starmer’s new Labour government to achieve “growth, growth, growth”.
The Prime Minister promised stability and a focus on his manifesto mission to achieve the “highest sustained growth in the G7” during the election campaign which saw him enter Downing Street on Friday with a majority of 170 – the largest since Tony Blair’s first term.
But he faces an uphill battle to reinvigorate the UK’s GDP, which has been lacklustre since the pandemic, despite economists predicting a return to expansion after stagnating in May.
City figures expressed a desire for stability, in the wake of the political turbulence and economic upheaval that beset markets during Brexit, Covid, and Liz Truss’ brief tenure – but want Labour to give clarity on big-ticket items including planning and workers’ rights reform.
“We hope this government will usher in a new era of policy certainty, stability and predictability – one that the UK urgently needs to boost investment, drive growth and bolster its international competitiveness,” Miles Celic, TheCityUK CEO, said.
While David Postings, UK Finance chief executive, described Starmer and Chancellor Rachel Reeves’ “level of political support” for financial services as “extremely welcome”.
Concerns have been raised over whether Labour plans a raid on capital gains taxes, and over the impact of the hike to carried interest charges outlined in the manifesto – with Reeves not expected to deliver her first Budget before the autumn, potentially as late as October.
Michael Moore, British Venture Capital Association chief executive, said while the sector was “ready to work with the new Labour government”, he stressed that “internationally competitive arrangements that incentivise long-term investment” had been key in generating UK growth.
He said increasing “investment by UK pension funds into private capital” was a “big opportunity” and urged the government to “continue to back the industry-led approach”.
Starmer has not yet appointed a City minister, with ally Tulip Siddiq, who holds the neighbouring seat of Hampstead and Highgate, holding the shadow brief since 2021. He is expected to resume making junior ministerial appointments today [Monday, July 8].
Chris Hayward, from Canada Corporation (CoLC), said the organisation “stands ready to support the government” on its missions on economic growth, jobs and climate.
“To realise Labour’s bold ambition to make Britain a clean energy superpower, private sector finance must play a central role,” he said.
“Working together, public and private partnerships must seize this historic opportunity.”
John Foster, from the Confederation for British Industry (CBI), stressed that Labour had won a “clear mandate” to deliver “sustainable growth” and said firms wanted to see “clear signals of intent”, despite tight public finances.
He urged the Prime Minister to deliver “early momentum” by “taking tough decisions” on key areas such as planning reform, grid capacity and net zero – and to set out a timeline for establishing the Industrial Strategy Council and an operating framework for GB Energy.
John Dickie, BusinessLDN chief, called on the government to “prioritise growth, growth, growth” and stressed that London’s firms “stand ready” to help the economy “secure lift off”.
Measures including clarity on tax policy, removing stamp duty on shares and reforming planning and skills were top of his priority list.
And Ros Morgan, CEO of the Heart of London Business Alliance (HOLBA), highlighted the “return of tax-free shopping… anti-social behaviour, rough sleeping and transport policy” and said central London firms “looked forward” to “focusing on boosting economic growth”.