Prime Minister Andy Burnham has called for a change in the way government works with British businesses as he prepares to meet senior executives from some of the UK’s biggest companies.
Burnham said entrepreneurs and businesses willing to take risks should receive greater backing, while local leaders should be given more power to work directly with companies and encourage investment.
The comments come ahead of a gathering at Downing Street involving senior figures from companies including BP, Shell, HSBC, Morrisons, Sainsbury’s, BT, Vodafone and Rolls-Royce.
Burnham promises government will be a ‘partner for growth’
Ahead of the meeting, the prime minister said he wanted people with promising business ideas to have confidence that they would receive the support needed to develop them.
Burnham also argued that giving local leaders the tools to work alongside businesses could help attract investment, generate employment and support communities.
He said the government intended to act as a “partner for growth” across Britain.
Local leaders are due to attend a reception with the business community before Burnham holds a private meeting with senior executives at Downing Street on Monday evening.
Businesses continue to face pressure from higher costs
The meeting comes against a challenging economic backdrop for both businesses and government.
The Labour government has faced criticism over policies that have increased employment costs, including changes to employer National Insurance and the minimum wage.
At the same time, higher energy prices and borrowing costs are creating additional pressure.
Oil prices have risen sharply following the US-Israel war with Iran, feeding through into energy and fuel prices for households and businesses. Concerns about persistent inflation have also increased expectations that central banks could raise interest rates.
The UK’s 10-year government bond yield — an important measure of government borrowing costs — is currently higher than those of several other major economies, including the United States, France and Japan.
Experts have attributed Britain’s position to several factors affecting investor confidence, including a succession of prime ministers and chancellors and repeated changes in policy.
UK economy received surprise July boost
There has, however, been some better economic news.
Official figures showed an unexpected improvement in the UK economy in July, partly driven by investment in artificial intelligence.
Economists nevertheless expect growth to weaken in the coming months as elevated energy prices continue to affect the economy.
The government is seeking to restore confidence in the UK economy while balancing demands for investment against historically high borrowing costs.
Conservatives call for business tax cuts
The Conservatives have criticised the government’s approach.
Shadow business secretary Julia Lopez argued that reducing taxes would be a more effective way of encouraging businesses to invest, create jobs and generate growth.
She also criticised Labour’s employment policies, arguing that higher employer costs and regulation have contributed to weaker recruitment and investment.
Monday’s meeting will give Burnham an early opportunity to demonstrate how his proposed closer relationship between government and business will operate in practice.