‘Culture shift’ needed in how UK does business, PM urges

Former Labour MP Andy Burnham has urged the UK to undergo a "culture shift" in its approach to business during an upcoming meeting with some of Britain's largest companies. The Prime Minister suggested that risk-takers in business should receive government backing, and emphasized the importance of local leaders working closely with corporations. Burnham had been scheduled to attend the meeting but canceled his participation due to the loss of his father on Monday and Tuesday.

The Labour government has faced criticism for raising costs for businesses, such as the introduction of employer national insurance and minimum wage changes under Burnham's predecessor, Sir Keir Starmer. The meeting will feature leaders from prominent firms like BP, Shell, HSBC, Morrisons, Sainsbury’s, BT, Vodafone, and Rolls-Royce.

Burnham pledged to provide individuals with the confidence that their innovative ideas would receive all the necessary support to flourish. He stated that when local leaders possess the tools to achieve their goals and the government collaborates with businesses, investment can be attracted, jobs created, and communities transformed. He further stated that the government would serve as a partner for growth, ensuring that every region of Britain benefits.

As higher borrowing costs in the UK and other nations pose challenges for governments seeking to invest in business support or development, hundreds of hospitality industry leaders have written to the Prime Minister, urging a reduction in VAT for the sector. Over 800 pub, restaurant, and hotel owners, including celebrity chefs Heston Blumenthal and Tom Kerridge, signed the letter requesting a decrease in the hospitality VAT rate from 20% to 10%.

Burnham had previously advocated for aligning the UK's VAT rate with those in other European countries while serving as Mayor of Greater Manchester.

Official data revealed a surprising economic boost in July, largely attributed to artificial intelligence (AI) investment. However, experts anticipate a slowdown in growth due to high energy prices. The recent conflict between the US, Israel, and Iran has led to a significant increase in oil prices, which has subsequently affected energy and fuel costs for households and businesses.

This rise in energy costs has raised concerns about inflation persisting at high levels and increasing the likelihood of central banks raising interest rates to control price increases. The anticipation of higher interest rates, coupled with competition from AI firms seeking funding for development in the global debt market, has driven up borrowing costs for governments in numerous countries.

However, some argue that the UK faces a unique issue, with the UK's 10-year bond yield higher than those of countries like the US, France, and Japan. This disparity can be attributed to factors such as multiple changes in leadership, policy shifts, and investor confidence in the UK.