Britain is turning into a bad joke as global business leaders pour scorn on us. Andy Burnham is making things worse.
Andy Burnham must act now to stop Britain falling further in global esteem (Image: Getty)
There’s barely a senior figure in the Labour Party who understands business, and it shows. They’re party careerists, flag-waving activists, union die-hards and hare-brained academics who think money grows on trees, particularly a magical tree called big business, which they can strip clean whenever they need some cash. These economic illiterates all agree that the best way to make Britain richer is to tax more and spend more. The result? A staggering 160,000 businesses have closed in the last six months, as business creation hits the lowest level in decades.
Tony Blair kept the anti-business tendency under control, but it was never going to last. Not with Gordon Brown, Ed Miliband and Jeremy Corbyn in the Labour leadership pipeline. Keir Starmer and Rachel Reeves made soothing noises and said they would work in partnership with business. It was a partnership of sorts – business gave and Labour grabbed all it could. Then came back for more.
Reeves’s £25billion National Insurance raid on employers made young people too expensive to hire, then Angela Rayner’s employment rights reforms made them too risky. Ed Miliband’s energy policy was the final blow. His ban on new North Sea oil and gas drilling was designed purely to impress his activist mates, and he didn’t give a damn about the damage to investment, jobs, production and energy security.
Burnham promised a more pragmatic approach to the North Sea, which we assumed included opening up the Rosebank oilfield and Jackdaw gasfield. Yet as winter looms and the energy crisis builds, he’s still dithering.
Burnham talks about reversing decades of deindustrialisation, but for him the only solution is more government spending. He doesn’t seem to get that having some of the highest energy bills in the world makes it impossible to compete. Now we risk the lights going out in a winter energy crisis.
Norwegian oil giant Equinor has said it may shun further investments in the UK if Rosebank and Jackdaw are not approved. Jim Johnson, chief executive of FTSE 250 engineering group Hunting, says Britain had become “less investable than Venezuela”, blaming our “crazy” politics and untrustworthy politicians. He shut down 80% of his group’s UK operations, and will never invest in this country again concluding: “We have just given up hope on the UK.”
He’s not the only one. Oil giant BP, a FTSE 100 stalwart whose dividends underpin countless pensions, has given up on the UK, selling its North Sea assets. Guess where its taken its expertise? Venezuela. In August, it signed an exploration and production license with the Venezuelan government.
The Latin American country has been devastated by years of socialist mismanagement under Hugo Chávez and Nicolás Maduro. Now one of our biggest blue-chips reckons it’s a better bet than us. Hardly surprising, given that UK Miliband slapped a 78% windfall tax on North Sea oil production, and Healey may drive it higher in this month’s budget.
Financial services is one of our most successful industries, contributing around 12% of the UK’s tax revenues. On Thursday, Chancellor John Healey just called Britain’s banks a “jewel in the crown”. Yet within hours, reports emerged that he was considering hiking the windfall tax on them in his Budget.
The world’s top banker, JP Morgan boss Jamie Dimon, has already warned a City windfall tax could harm jobs and force him to cancel a planned £3billion investment. Yet Healey bans on about miner’s lamps. It’s just laughable.
A bank tax raid will backfire by cutting credit to consumers and businesses, slowing investment and growth, and driving up mortgage rates. Try explaining that to Healey, or anyone in Labour. They won’t understand what you’re talking about. They’ll just rant on about greedy ‘banksters’ and shout you down.
Another foreign entreprenuer has given up. Jensen Huang, boss of silicon chip maker Nvidia, the world’s biggest company, flew into the UK this week to tell us we lack the “entrepreneurial spirit” adding: “If there was a million ways to win, you find the one reason not to do it” He’s laughing at us too.
Millions have fled failed state Venezuela. Last year, a record 69,000 workers abandoned the UK. Bloomberg says we’ve lost £120billion of wealth as billionaires leave or loosen their ties with Britain. Starmer and Reeves started this process. Unless Burnham and Healey wake up, the exodus will only accelerate, and we’ll all be the poorer. It’s no laughing matter.