A full-throated attack on Labour’s destructive policies towards enterprise, launched by one of the biggest beasts in British business, has underlined the true scale of the economic catastrophe facing Britain.
In the harshest salvo to date, Asda chairman Lord Rose, the acerbic former boss of Marks & Spencer, warned that the UK is ‘genuinely at the edge of a crisis’ and needs to change tack immediately to kick-start growth and create jobs.
Rose’s intervention comes hot on the heels of the decision by Sir Jim Ratcliffe, billionaire owner of chemical and energy giant Ineos and cornerstone investor in Manchester United, to quit the UK.
He is outraged by Labour and Ed Miliband’s madcap war on oil and gas production and Britain’s vital chemical industries. Ratcliffe has declared bluntly that ‘we cannot invest’ in the UK and intends to divert future resources to the US.
It gets worse. Ineos chairman Brian Gilvary’s description of Britain as ‘one of the most unstable fiscal regimes in the world’ for natural resources and energy can only fuel the global sell-off of British government bonds or gilts – a sure-fire indication of a lack of investor confidence in this country.
Bonds work like a seesaw. When the face-price falls because of this lack of confidence, the interest-rate yield on them rises.
So instead of delivering the highest growth among the G7’s richest countries, as Sir Keir Starmer promised, Labour has delivered the highest yield on government 30-year bonds in the G7.
Which in turn means the interest-rate bill on British debt has rocketed to an estimated £126billion per year. That is more than the cost of national defence and public order and safety combined!
These brutal interventions by two of Britain’s best-known tycoons come at a critical moment when tens of billions of pounds of investment by some of Britain’s best-regarded, cutting-edge firms are heading overseas because of Labour.
The scale of the commercial revolt against the policies of Starmer’s Government cannot be underestimated. The suicidal £25billion-a-year hike in employers’ national insurance contributions (NICs) has already destroyed as many as 174,000 payroll jobs and alienated hospitality and retail sectors, as well as much of the rest of the business community.
As if this were not serious enough there is a sense of dread in boardrooms across the land over Angela Rayner’s legacy Employment Rights Bill which is trundling through Westminster. The Bill is enthusiastically supported by the trades union brothers who have been meeting in Brighton – just a mile along the promenade from Rayner’s Hove apartment.
Starmer and Chancellor Rachel Reeves need to recognise that 72 per cent of Institute of Directors members, representing businesses across the UK, fear the bill will shatter what little growth there is. It will likely add as much as £5billion in costs to business per year – inflationary costs which will be passed on to customers.
This comes just as the Chancellor tells ministers they must join the fight against a stubborn annual inflation rate of 3.8 per cent – again the highest in the G7.
At London’s Guildhall on Monday night, celebrating 70 years of ITV broadcasting, Reeves lavished praise on Britain’s creative industries to resounding applause. The reality for such firms whose bosses were in the audience, however, is that jobs in what was until very recently one of Britain’s proudest growth sectors are being axed daily.
The truth is that Labour disregards business. Its determination to impose more tax and regulations on wealth creation could not be more idiotic.
Take the example of Sir Jim. Estimated to be worth £17billion, he moved offshore to Monaco some years ago. But no one should ever underestimate his contribution to UK plc. For decades he was the buyer of last resort for Britain’s heavy chemicals industry, as companies such as BP, Shell and ICI beat a retreat to focus on their core interests.
He is furious at the windfall tax imposed on oil and gas companies introduced by the Tories and raised to unsustainable levels by Reeves in the last Budget. Ratcliffe’s team highlight a far superior investment climate in the US where the benefits of domestic production and supply are recognised.
Ineos is not alone in viewing Britain as an unfriendly place to invest. In January, the largest listed company on the London stock exchange, AstraZeneca (AZ), with a valuation of £185billion, scrapped plans for a £450million expansion of vaccine manufacturing in the UK. The choice was made after Labour cut its financial backing for a scheme previously approved by the Tories.
The decision was an unnecessary snub to the life sciences group which saved millions in the pandemic by being first to produce and back the Oxford Covid-19 jab. The new plant would have helped ensure Britain’s vaccine resilience in the case of another pandemic.
Only eight months after the decision are the consequences of this blow to Britain’s leading life sciences industry being understood. AZ boss Sir Pascal Soriot is redirecting the company’s vast research and development budget to the US, with a stonking $50billion of new investments.
Similarly, the UK’s other pharma trailblazer GlaxoSmithKline (GSK), creator of vaccines against shingles and respiratory diseases, has announced it will be focusing new investment in Philadelphia.
Both companies are outraged by Health Secretary Wes Streeting’s arbitrary decision to increase the ‘voluntary’ levy on drugs sold to the NHS to 32 per cent. Sir Pascal has let it be known that he would consider moving his company’s share quotation from London to New York. If that were to happen it would be a devastating blow to the City of London.
Labour is inclined to dismiss interventions by businessmen such as Rose, Ratcliffe and Soriot as of no consequence. But the companies led by these corporate magnates are enormous contributors to the Exchequer. Cancelled or reduced investment in the UK risks killing Britain’s business reputation.
As much as Labour seeks to portray itself as the friend of ‘working people’, it is unable to comprehend that higher taxes on big corporations and small and medium-sized enterprises is destroying jobs, entrepreneurship and enterprise.
Everywhere I go in the City the message is the same. Labour’s Cabinet is devoid of senior-level commercial experience, and it shows. At meetings and company visits the politicians don hard hats and put on a show of listening to what businesses have to say, but they aren’t hearing.
Ahead of the Employment Rights Bill and the November Budget, British businesses are already shouting dire warnings. Last week, JD Sports boss Andy Higginson told the Daily Mail he feared for anchor stores on Britain’s already desolate high streets should changes to business rates be forced through.
Labour’s feeble understanding of business and the impact of its taxing of corporate Britain until the pips squeak are proving to be fatal. And yet Starmer, Reeves et al seem incapable of recognising the harm they are inflicting.
