(Bloomberg) -- Keir Starmer met US business executives including Blackstone Inc. President Jon Gray, JPMorgan Asset Management Chief Executive Officer Mary Callahan Erdoes and Citigroup CEO Jane Fraser, as the UK prime minister seeks to attract investment to boost Britain’s flagging economy.
“A lot of the policy initiatives that we have put in place have come out of discussions like this,” Starmer said at the start of the meeting in New York, which was also attended by the prime minister’s business adviser Varun Chandra. “If we can get into the question of what works, what doesn’t work, how to get the economy to really turbo-charge, what are the ambitions for investment, that really helps us shape our working.”
The Labour premier has spent much of his near three months in office highlighting the woeful state he says the previous Conservative administration left the country in. He and Chancellor of the Exchequer Rachel Reeves have also repeatedly pointed to a £22 billion ($29 billion) fiscal hole they need to fill this year, signaling tax rises are likely in the budget on Oct. 30.
But the negative messaging has itself become a potential drag on the economy, with consumer confidence suffering its sharpest fall in 2 1/2 years. Businesses have expressed concerns about a lack of policy detail to guide their planning, and a survey by S&P Global found on Monday that companies are putting off investments as they await details in the budget. Moreover, gross domestic product has stagnated in three out of the last four months.
All that has led to criticism about the new government’s gloomy messaging, which both Starmer and Reeves sought to arrest this week at the party’s annual conference in Liverpool.
“We have to have an accurate diagnosis of what the problem is and then our job is to say what are we going to do about it,” Starmer told BBC TV on Wednesday.
The UK government said late Wednesday that Blackstone has confirmed £10 billion of investment in Blyth, northeast England, to create what it billed as one of the largest artificial intelligence data centers in Europe, creating 4,000 jobs. The proposed deal was first announced earlier in the year when Rishi Sunak’s Conservative administration was still in power.
Starmer met late Wednesday individually with Microsoft Corp. President Brad Smith and Larry Fink, CEO of BlackRock Inc. Those on the guest list for Thursday’s round table meeting also included Adebayo Ogunlesi, CEO of Global Infrastructure Partners, Macquarie Group CEO Shemara Wikramanayake, Bank of New York President Robin Vince, Nuveen Asset Management CEO William Huffman, Carlyle Group CEO Harvey Schwartz, and Brookfield Asset Management Chief Financial Officer Hadley Peer Marshall.
Starmer also toured Nasdaq on Thursday, meeting its CEO, Adena Friedman.
Britain is set to host hundreds of investors at an investment summit next months as Starmer seeks to sell his message that the UK is open for business.
“We have made growth our number one mission, so wealth creation is the Labour government’s number one mission,” Starmer said in the round table meeting. “There are not many Labour prime ministers who would necessarily say that, but it is so important.”
The government has also set up two new bodies — GB Energy and the National Wealth Fund that are designed to use government spending to crowd in private investment. At conference, Reeves hinted at potential changes that would take them off the government’s books, a change in accounting treatment that Andy King, a former senior official at the Office for Budget Responsibility, has said could give her £15 billion more headroom for borrowing.
While Starmer refused to be drawn on details of what may be in the budget, he told Channel 4 News that he’s “always, long believed in borrowing to invest.”
Growing the economy is “what I’m going to be judged on at the end of this term in government,” he said when asked about Reeves’s remarks. “And I know that, and therefore we look to measures to grow the economy.”
(Updates with comments from Starmer from second paragraph.)
©2024 Bloomberg L.P.
