Alan Mak MP is a former Treasury and Business Minister and Conservative MP for Havant.
Keir Starmer came to office promising growth as all Prime Ministers do, but few leave office with as dismal a record on the economy. Together with his raid-and-regulate Chancellor Rachel Reeves their legacy is a high-tax, high-regulation, low-growth economy in which Britain’s entrepreneurs aspire to scale up businesses into world leaders while the Labour Government makes it harder to hire, invest and build.
Their economic mismanagement has left the country reeling, despite facing far fewer external shocks (such as a pandemic) than previous governments. A huge number of their mistakes were self-inflicted and ideologically-driven. All inflicted lasting damage on our economy, and especially our aspiring scaleups.
Take the Jobs Tax. Raising employer National Insurance and lowering the threshold at which it is paid was always going to make work more expensive. Ministers can dress it up however they like, but when the price of employing people rises, businesses hire fewer people, delay expansion and pass costs on to customers. For startups, high-growth scaleups, and SMEs generally, where every new engineer, salesperson or technician matters, this is a direct tax on ambition.
Then came Labour’s (anti) employment legislation: more red tape, more union power and less flexibility. A founder deciding whether to take on their next ten staff, or a small manufacturer deciding whether to open a second site, now has to price in another layer of cost and uncertainty. Labour calls this fairness. In the real economy, it means fewer opportunities and less growth.
Labour’s energy policy has been just as damaging. There is no growth without cheap, abundant energy. Yet Britain has some of the highest industrial energy prices in the developed world, and Labour has chosen to make the problem worse. Their hostility to domestic oil and gas, obsession with targets before infrastructure, and failure to grip the grid are driving up costs for factories, data centres and manufacturers. We cannot become an AI superpower on expensive power and a congested grid.
Starmer and Reeves also went after the people who take risks and create wealth. The Family Farm Tax and Family Business Tax punish stewardship and growth. Higher dividend taxes and capital taxes reduce the reward for building something. And their cut to Venture Capital Trust (VCT) income tax relief from 30 per cent to 20 per cent is short-sighted. VCTs help channel private savings into younger, innovative companies that banks often will not back. A recent industry survey revealed 62 per cent of VCT-backed founders are scaling back growth plans, 45 per cent are reducing headcount, and 25 per cent may move their headquarters abroad.
This matters because the global race for growth is not just about starting companies. It’s also about which countries can grow and scale them – which countries become ScaleUp Nations. Britain is excellent at creating startups, especially in AI, fintech, life sciences and advanced manufacturing, but our record at scaling them into global category-leaders is much weaker. Parliament’s Business and Trade Select Committee recently reported that 94 per cent of these high-growth businesses sell early, list abroad or move their headquarters overseas because the capital, energy, talent and regulatory environment are easier elsewhere. Labour’s policies have turbocharged this worrying trend.
Andy Burnham has inherited this mess. He needs to learn from it. “No 10 North” may be a flashy slogan, but it’s not an economic plan. He can talk about devolution, but it cannot substitute for the fundamentals of growth: lower energy costs, lower taxes, less regulation, flexible labour markets, support for risk-takers, and attracting more capital and foreign investment.
Kemi Badenoch has been clear about those fundamentals. She has offered to sit down with Labour’s new Prime Minister and work in the national interest. Burnham should take that offer seriously. He should look at Conservative plans to cut energy bills, scrap damaging red tape, restore incentives to work and invest, and back the entrepreneurs and investors who can build Britain’s future industries and high-growth scaleups.
Sadly, Labour rarely learns the right lessons from their failures. Burnham’s instincts appear to be more state direction, more public control, more welfare and more spending promises funded by high-cost borrowing, and more faith in politicians than in enterprise. Even with a new Chancellor, the danger is that Starmer’s failures compound under Burnham.
Instead, Britain needs a different course: economic policy that rewards work, welcomes investment and helps high-growth firms scale at home rather than overseas. Labour’s legacy is a warning and a call to action for us Conservatives. We must remain vigilant for further Labour attacks on growth, continue holding them to account for their damaging policies, and maintain our momentum under Kemi in setting out a credible alternative plan for national economic renewal.
Alan Mak MP is a former Treasury and Business Minister and Conservative MP for Havant.
Keir Starmer came to office promising growth as all Prime Ministers do, but few leave office with as dismal a record on the economy. Together with his raid-and-regulate Chancellor Rachel Reeves their legacy is a high-tax, high-regulation, low-growth economy in which Britain’s entrepreneurs aspire to scale up businesses into world leaders while the Labour Government makes it harder to hire, invest and build.
Their economic mismanagement has left the country reeling, despite facing far fewer external shocks (such as a pandemic) than previous governments. A huge number of their mistakes were self-inflicted and ideologically-driven. All inflicted lasting damage on our economy, and especially our aspiring scaleups.
Take the Jobs Tax. Raising employer National Insurance and lowering the threshold at which it is paid was always going to make work more expensive. Ministers can dress it up however they like, but when the price of employing people rises, businesses hire fewer people, delay expansion and pass costs on to customers. For startups, high-growth scaleups, and SMEs generally, where every new engineer, salesperson or technician matters, this is a direct tax on ambition.
Then came Labour’s (anti) employment legislation: more red tape, more union power and less flexibility. A founder deciding whether to take on their next ten staff, or a small manufacturer deciding whether to open a second site, now has to price in another layer of cost and uncertainty. Labour calls this fairness. In the real economy, it means fewer opportunities and less growth.
Labour’s energy policy has been just as damaging. There is no growth without cheap, abundant energy. Yet Britain has some of the highest industrial energy prices in the developed world, and Labour has chosen to make the problem worse. Their hostility to domestic oil and gas, obsession with targets before infrastructure, and failure to grip the grid are driving up costs for factories, data centres and manufacturers. We cannot become an AI superpower on expensive power and a congested grid.
Starmer and Reeves also went after the people who take risks and create wealth. The Family Farm Tax and Family Business Tax punish stewardship and growth. Higher dividend taxes and capital taxes reduce the reward for building something. And their cut to Venture Capital Trust (VCT) income tax relief from 30 per cent to 20 per cent is short-sighted. VCTs help channel private savings into younger, innovative companies that banks often will not back. A recent industry survey revealed 62 per cent of VCT-backed founders are scaling back growth plans, 45 per cent are reducing headcount, and 25 per cent may move their headquarters abroad.
This matters because the global race for growth is not just about starting companies. It’s also about which countries can grow and scale them – which countries become ScaleUp Nations. Britain is excellent at creating startups, especially in AI, fintech, life sciences and advanced manufacturing, but our record at scaling them into global category-leaders is much weaker. Parliament’s Business and Trade Select Committee recently reported that 94 per cent of these high-growth businesses sell early, list abroad or move their headquarters overseas because the capital, energy, talent and regulatory environment are easier elsewhere. Labour’s policies have turbocharged this worrying trend.
Andy Burnham has inherited this mess. He needs to learn from it. “No 10 North” may be a flashy slogan, but it’s not an economic plan. He can talk about devolution, but it cannot substitute for the fundamentals of growth: lower energy costs, lower taxes, less regulation, flexible labour markets, support for risk-takers, and attracting more capital and foreign investment.
Kemi Badenoch has been clear about those fundamentals. She has offered to sit down with Labour’s new Prime Minister and work in the national interest. Burnham should take that offer seriously. He should look at Conservative plans to cut energy bills, scrap damaging red tape, restore incentives to work and invest, and back the entrepreneurs and investors who can build Britain’s future industries and high-growth scaleups.
Sadly, Labour rarely learns the right lessons from their failures. Burnham’s instincts appear to be more state direction, more public control, more welfare and more spending promises funded by high-cost borrowing, and more faith in politicians than in enterprise. Even with a new Chancellor, the danger is that Starmer’s failures compound under Burnham.
Instead, Britain needs a different course: economic policy that rewards work, welcomes investment and helps high-growth firms scale at home rather than overseas. Labour’s legacy is a warning and a call to action for us Conservatives. We must remain vigilant for further Labour attacks on growth, continue holding them to account for their damaging policies, and maintain our momentum under Kemi in setting out a credible alternative plan for national economic renewal.