Sunak pledges £100m ‘world leader’ AI boost as firms wooed at business summit
Prime minister Rishi Sunak has insisted his government is undertaking “the most transformative changes to financial services regulations since the Big Bang”.
Sunak insisted the Financial Services and Markets Bill was a “very significant piece of legislation”.
He pledged that once the law was implemented, Solvency II reforms would “unlock tens of billions of pounds of capital” as a “Brexit opportunity”.
Addressing Business Connect, a conference he convened with more than 200 high profile chief executives and 20 government ministers in London, Sunak told bosses: “This government is unashamedly pro-business.
“I know the last year has not been easy – we’re all dealing with the aftermath of Covid, the impact on supply chains, the war in Ukraine, the impact on energy prices.
“But I believe we are turning the corner… optimism and confidence returning, people looking forward to brighter days ahead.”
Brexit ‘drag on trade’
He is battling to patch up the relations with industry following the challenges of Brexit and coronavirus and the leaderships of Boris Johnson and Liz Truss.
During a Q&A, he was challenged by the chairman of Burberry over the “spectacular own goal” of a post-Brexit VAT change as he sought to repair his party’s reputation with business.
Gerry Murphy told the PM his move to scrap the VAT refund for tourists has made Britain the “least attractive” shopping destination in Europe.
The chairman of the luxury retailer added: “It is somewhat perverse that on the day that we left the single market, a decision by, I think it was by you as chancellor, to remove the VAT refund for tourists made the UK the least attractive shopping destination in Europe.
“Leaving the EU has had a significant friction effect on trade, hopefully not forever … but it is the case it was a drag on growth.
“So we ask you to look at this specific one (VAT), this is a spectacular own goal, one that can be reversed by a decision from you or from the Chancellor.”
AI ‘world leader’
Sunak insisted there “were good reasons for it” but said he would look at the data to “see if things are panning out as we expected to, or not”.
The PM used the ‘business day’ to announce a £100m investment in UK’s generative artificial intelligence (AI) capability which is predicted to boost global GDP by seven per cent over the next decade.
Speaking to journalists at the event, Sunak said the UK’s approach to the potential of AI as a new tool was the right one.
“I don’t think governments can wish this away and pretend it’s not happening,” he said.
“It’s right that we engage with it properly because we need to get the balance right between support and innovation, protecting ourselves against the risk, and the government needs to be active for that.
“But we have the opportunity to be, I think, a world leader.”
Labour fightback
Asked whether today’s event was part of the fightback against Labour’s business charm offensive, the PM also insisted to City A.M that the conference was “unprecedented”.
He highlighted his background in finance, saying: “This is not the typical way governments have done this, but that’s my background.
“I want businesses small and large to know that we’ve got their back… Most people know what I did to support business during the pandemic… I think it’s a pretty strong signal of orientation and commitment to business today.”
Labour seized on the conference to accuse the Tories of having mismanaged the economy.
Shadow chief secretary to the Treasury Pat McFadden said: “After 13 years, the pattern of Tory economic failure is grinding on.”
Earlier this month, IMF economists said they expected the UK economy to grow slower than other developed G7 nations, with a contraction of 0.3 per cent this year before rebounding to grow by one per cent next year.