Strategy without substance: Labour must do more to stop the City exodus, says ALEX BRUMMER
Share this @internewscast.com

Now we have a full house: Labour’s spending review, the infrastructure plan and the long-awaited industrial strategy.

Anyone seeking to reconcile the bucketful of numbers, different timings of implementation and the exact sum of money involved will, to quote departing Institute of Fiscal Studies chief Paul Johnson, be baffled.

This is not to say that there is not good stuff in the industrial strategy.

The decision to relieve a bunch of manufacturing business, some 7,000 firms, of intrusive green levies represents a significant change of direction which should improve the competitiveness of the motor, aerospace and chemical industries.

But it does not do much help for retail and hospitality, which face not just escalating fuel costs but the consequences of the employers’ National Insurance increase and ramped-up business rates.

Whitehall is a whizz at coming up with an alphabet soup of new names such as the ‘British Industrial Competitiveness Scheme’ and a ‘Connections Accelerator Service’.

Hot air: Whitehall is a whizz at coming with an alphabet soup of new names such as the British Industrial Competitiveness Scheme and a Connections Accelerator Service

These will sit alongside the other good stuff already unveiled, such as Great British Energy and the National Wealth Fund. How this hangs together is confusing.

The focus on eight sectors where the UK excels – advanced manufacturing, clean energy, creative industries, defence, digital tech, financial services, life sciences, and professional and business services – clearly has merit.

Much of it is hot air. There is no recognition that great swathes of tech leave these shores daily.

Only yesterday, precision instrument maker Spectris fell into the hands of private equity plunderer Advent.

The creative industries are under threat from AI because Sir Keir Starmer favours American big tech over home-grown talent. 

The decision to refuse assistance to AstraZeneca vaccine production in the UK encouraged our biggest pharma concern to invest overseas.

UK fintech creation Wise and Revolut plan New York listings. And the 2.5 per cent of GDP promised for defence spending is half the NATO target of 5 per cent.

Practical steps such as judicious use of the National Security & Investment Act, to end the madness of foreign and private equity bids, would be a good start to a refreshed approach.

Health boost

In the end, after a revolt from UK long investors, the ridiculous board of NHS and medical property landlord Assura opted for an effective merger with PHP.

That may require fewer goodies for executives and the jobs grief which comes with mergers. It must, however, be in the best interest of stakeholders.

Those at Assura who felt a cash deal with KKR was the better option were delusional. A search of the British Medical Journal archive provides clear guidance on the impact of private equity ownership in this space.

It results in extra cost to patients and payers, secondary effects on health outcomes and ‘mixed to harmful impacts on quality’. 

A KKR deal would also have meant signing away the benefits of a 3 per cent rise in Labour’s investment in the NHS to grasping financiers.

All the indications are that many reforms to the NHS would focus on community and primary care, enhancing the value of companies investing in clinics and practices. KKR’s last offer was ‘final’, precluding a return with a higher bid.

One trusts KKR won’t be back for the whole caboodle in six months.

Cherry picking

Spectris is the latest advanced UK engineer to take the private equity shilling, choosing private equity giant Advent ahead of KKR.

The price of £4.4billion paid may look generous but not when one considers the discount to the New York stock market for the best of British engineering.

No one in the Government should be complacent. 

It weakens the London markets. Advent’s purchase of Cobham in 2019 and the dismantling of an aviation pioneer was a disgrace. Its key flight refuelling technology was sold to a US rival.

The enormous value of Cobham’s innovative tech was demonstrated in the epic 18-hour flight of B2 stealth bombers to Iran and back at the weekend.

What happened to ‘securonomics’?

DIY INVESTING PLATFORMS

AJ Bell

Easy investing and ready-made portfolios

AJ Bell

Easy investing and ready-made portfolios

Hargreaves Lansdown

Free fund dealing and investment ideas

Hargreaves Lansdown

Free fund dealing and investment ideas

interactive investor

Flat-fee investing from £4.99 per month

interactive investor

Flat-fee investing from £4.99 per month

InvestEngine

Account and trading fee-free ETF investing

InvestEngine

Account and trading fee-free ETF investing

Trading 212

Free share dealing and no account fee

Trading 212

Free share dealing and no account fee

Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.

Compare the best investing account for you

Share this @internewscast.com
You May Also Like

MIDAS STOCK STRATEGY: University Spin-offs May Yield Top-Tier Profits

Taking a slice of good old British intellectual flair isn’t as easy…

“Superman Earns $25 Million Leading Up to Opening Weekend”

Superman pocketed an estimated $25 million from early domestic screenings this week…

BCG Secured Over $1 Million for Project Involving Aid Barge to Gaza

Boston Consulting Group received over $1 million for its collaboration with a…

Results and Highlights from WWE Saturday Night’s Main Event 40: Winners and Grades

Goldberg vs. Gunther at WWE Saturday Night’s Main Event WWE WWE Saturday…

Seize the Opportunity of This Market Decline to Boost Product Speed, Attract Customers, and Dominate the Upcoming Cycle

Opinions expressed by Entrepreneur contributors are their own. Crypto trading volumes have…

Why Patrick Agyemang Could Be a Steal for USMNT at $8 Million

Patrick Agyemang of the United States celebrates after scoring the second goal…

AC/DC’s Hit Climbs Back to Global Peak

AC/DC’s “Thunderstruck” returns to its all-time peak of No. 169 on the…

Italian Court Orders UniCredit to Leave Russia for BPM Acquisition to Proceed

Stay informed with free updates An Italian court has affirmed that UniCredit…

Predicting AI’s Evolution: Achieving General Intelligence by 2040

Identifying the S-curve pathway from current AI to the attainment of AGI.…

Unlocking the Power of Your Nervous System to Enhance Leadership and Performance

Opinions expressed by Entrepreneur contributors are their own. Today’s leadership challenges go…