07 Oct 2022

View from Chancery Lane - Michael Moore reflects on the challenges party leaders are wrestling with

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The UK’s annual party political conferences used to be by the seaside – think Blackpool, Brighton and Bournemouth. Often the autumn gales would provide apt metaphors as politicians were ‘buffeted’ or ‘knocked off course’ by party divisions or media scrutiny. Nowadays the main action has moved to city centres in Manchester, Birmingham or Liverpool, where the metaphors are about ‘rejuvenation’ and ‘regeneration’. At least, that’s what party leaders hope.

Two weeks ago the boldness of the Chancellor’s maxi-mini-Budget caught the country (the world, even) by surprise. All of this as Labour arrived on Merseyside for their annual gathering. The ‘not-a-Budget’ added a new layer to the conference backdrop, supplementing the energy crisis, inflation and rising interest rates as key focal points. And these challenges for the government coincided with a growing self-confidence in Labour ranks, and a more pro-business stance from the leader, Keir Starmer, and shadow chancellor, Rachel Reeves. Both their speeches ushered in major initiatives, from a state-owned green energy company to a new industrial strategy. Enjoying strong poll leads as they left Liverpool, their next task will be to start fleshing out the detail beyond the headlines.

Participating in the Labour party’s business day discussions, our main aim was to develop their understanding of private equity and venture capital. Partnering with the New Statesman on a debate about innovation and regional growth was part of efforts to build stronger links with the mayors of Merseyside, Greater Manchester and London. The industry’s relentless focus on growth, not asset-stripping, was our over-arching message and there was welcome traction on this with senior figures in the party. Framing our conversations in the right way is key to meaningful further discussions to ensure the UK investment climate remains attractive to the industry in the years ahead.

And so to Birmingham. The nature of the tax cuts and the easing of restrictions on bankers’ bonuses had grabbed the headlines after the Chancellor’s statement two weeks ago. But the delay in the Office for Budget Responsibility’s forecasts became the story as financial markets reacted the following week. The subsequent Bank of England interventions, the reversal of the top rate tax cut and a growing expectation that OBR forecasts will be published sooner than planned, have changed the narrative. This allowed the Prime Minister to re-focus attention on her strong personal commitment to ‘growth, growth, growth’ as she delivered her speech at the end of the conference. Ministers are understandably now keen to move on quickly and bring in the supply side measures which they believe are key to this overarching objective.

This is the story that has been hard to hear at times amidst the political comings and goings. In terms of the new ministerial teams, there is a lot of attention being paid to issues which are important to the industry – accessing new capital through DC pensions, supporting the future of EIS and VCT arrangements, delivering impetus (and cash) to scale up funding (through LIFTS – the Long Term Investment for Technology and Science programme which my colleague Chris Elphick explores further in his recent column). From the business department and trade department to the Treasury and Downing Street we have heard strong commitments to these and other measures.

Political squalls are a fact of life, whether you convene at a seaside resort or at an inner city conference centre. And they are rarely far away at Westminster, where the action returns next week. But when parliamentarians and others step away from the storms, they now have a clearer picture of private capital’s role in securing sustainable growth across the country and the industry’s commitment to creating ‘public value’. That means there is plenty for us to focus on constructively as autumn unfolds further.

 

Michael Moore
Director General, BVCA


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