The UK needs a “culture shift” in how it does business, Andy Burnham has said ahead of a meeting with some of the UK’s biggest bosses. The prime minister said those who take risks in business should be backed by government and local leaders should have the power to work with businesses. The current Labour government has been criticised for increasing costs for businesses, such as with the employer national insurance and minimum wage changes under Burnham’s predecessor Sir Keir Starmer. Downing Street said Burnham will meet with the chief executives of BP, Shell, HSBC, Morrisons, Sainsbury’s, BT, Vodafone, Rolls-Royce, and several others at Number 10.
Ahead of the meeting, Burnham said he would give people “the confidence that if they have a great idea, they’ll get all the support they need to bring it to life”. “When local leaders have the tools to get things done and government works in partnership with business, you can pull in investment, create jobs and transform communities,” he said. He added the government would be “a partner for growth to make every part of Britain better off”. Burnham will host a reception for the business community where local leaders are invited before a private engagement with senior chief executives at Downing Street on Monday evening.
The meeting comes as higher borrowing costs in the UK and other countries present problems for governments looking to spend money on business support or investment. Official data revealed a surprise boost in the economy in July partly driven by artificial intelligence (AI) investment, though experts expect growth to slow in the months ahead due to high energy prices. The US-Israel war with Iran has led to a sharp jump in oil prices, which has fed through to higher energy and fuel prices, affecting households and businesses. This rise in energy costs has led to fears that inflation will remain high, and increase the chance that central banks will hike interest rates to keep price rises under control.
The expectation of higher interest rates, as well as competition for debt from AI firms looking to spend money on development, has driven up the cost of government borrowing in many countries. However, many argue the UK has a particular problem with high government debt. The UK yield for 10-year bonds, a key measure of government debt costs, is higher than countries such as the US, France, and Japan. Experts say this is due to several factors affecting investor confidence in the UK, such as multiple prime ministers, chancellors and policy U-turns over a short period.
In an interview with the BBC last week, Chancellor John Healey called for a restoration of “confidence about Britain” despite acknowledging the challenge of “historic high” borrowing costs. Others have argued that the Labour government has created its own problems by increasing costs for businesses. Conservative shadow business secretary Julia Lopez said: “The way for the prime minister to get businesses thriving, delivering jobs and driving growth is to cut their taxes. “Labour’s jobs tax and employer red tape have been devastating for businesses.
The consequence has been a drying-up of the jobs market, weaker investment and businesses facing ever greater costs.” AI boom helps drive surprise UK growth in July Why are petrol and diesel prices rising again? Faisal Islam: Why bond market wildfire is keeping world leaders up at night
