Keir Starmer tells business leaders: ‘We've asked a lot of you'

Times

a day ago

Stepping on stage at the QEII Centre in Westminster on Thursday, the prime minister was full of thanks and acknowledgement of the effect the government's cost increases have had on businesses.
Addressing the annual British Chambers of Commerce conference after an earlier breakfast meeting with bosses of more than a dozen companies, including Heathrow, Spire Healthcare and NatWest, Sir Keir Starmer signalled an attempt to rebuild strained relations.
'I want to begin by thanking you all because look, I fully acknowledge here that this year, as we've had to fix the foundations of our country, deal with the unprecedented mess that we inherited, we've asked a lot of you. I understand that,' he said.
• 'Freeze taxes' says business lobby after national insurance hit
After being wooed in the run-up to July's election victory, businesses have since hit out at the 'size and scale' of Labour's rise in employers' national insurance contributions, announced in October's budget and introduced in April.
A new survey by the BCC, one of Britain's big five business lobby groups, released before its conference of mostly small and medium-sized businesses, found that a third said they have either made staff redundant or are planning to as a 'direct result' of the increase. Shevaun Haviland, the BCC's director general, in her conference speech, pressed the government to commit itself to freezing business taxes.
In Starmer's charm offensive to the hundreds of delegates sitting before him in the vast conference room he gave no such commitment. But having unveiled the spending review for the parliament this month, as well as the industrial, infrastructure and, on Thursday, trade strategies, the prime minister said the government had shown a 'clear shift' to the 'next phase' of 'investing in the future of our country'.
He added: 'And that means that we have to back you to the hilt. Because your members are the engines of growth in every community across the United Kingdom.'
Monday's industrial strategy is underpinned by slashing the internationally uncompetitive costs of the economy's most intensive energy users and finally tackling the country's chronic skills shortage. The trade strategy includes a focus on pursuing smaller, faster trade deals with the likes of Brazil, Thailand and Kenya, rather than bigger free-trade agreements; closer ties with 'like-minded' nations such as Japan and Singapore; a £20 billion increase in the capacity of UK Export Finance, the government's credit agency for exporters, to £80 billion; and a consultation on anti-dumping measures for steel.
One senior business leader, speaking privately on the sidelines of the conference after Starmer's speech, said the prime minister 'really is listening. So I think that is all positive.' But they added, talking of the broader government: 'They don't quite recognise the impact of the taxes and national insurance impact. It is significant. I mean you can't just absorb those. You have to do something about it. It is impacting jobs.'
They said: 'Everybody in the room I talk to is making redundancies … so they're [ministers] going to have to do quite a lot of work on the productivity side of the balance sheet to offset what they did.'
On stage, in a conversation with Haviland, Thomas Woldbye, the chief executive of Heathrow, welcomed the chancellor's green light this year for a third runway at the airport, a big infrastructure project that could boost Britain's productivity. Woldbye said Heathrow was 'central' in 'facilitating and delivering' the government's trade, industrial and infrastructure strategies.
Heathrow is submitting its formal proposal to the government this summer and ministers are targeting planning permission this parliament. Woldbye said the chancellor's deadline was 'very, very ambitious' and required work on planning, as well as modernising the UK's airspace.
Another significant concern of business is the government's contentious Employment Rights Bill. Starmer told the conference: 'I get the concerns,' but declined to signal further concessions as officials work with business on the reforms. The workers' rights changes will introduce day-one rights, better access to flexible working, and hand greater powers to trade unions.
The prime minister said: 'Many people have recognised that a secure, protected workforce is good for business; drives up productivity.'
Jonathan Reynolds, the business secretary, who also attended the conference and the earlier breakfast with bosses, told reporters on the sidelines that he was 'absolutely certain' the government could address the 'two principal concerns' of business — probation periods and access to zero-hour contracts — 'not through any change of policy, but through our existing approach'.
• Workers' rights bill will stymie growth, not encourage it
The senior business leader, who was speaking privately, said to capitalise on the productivity benefits of artificial intelligence, businesses needed to restructure the workforce and operations, yet the employment rights reforms 'as far as I can see, freezes everything … you're going to get into a very complex process'.
Closing the conference, Kemi Badenoch, the leader of the opposition and former Conservative business secretary, reiterated that the Tories had lost the trust of business before last July's general election, but citing inflation, growth and unemployment, said Labour had since delivered 'change for the worse and it didn't have to happen'.
Taking aim at the employment rights reforms — a 'huge problem' — and business taxes, Badenoch said: 'The rise in national insurance is killing jobs. It is making it impossible for businesses to grow.'
Seeking to 'win back trust', she told delegates: 'We have to unleash the animal spirits of business.'