Keir Starmer and Rachel Reeves will meet top executives from some of Britain’s major businesses on Tuesday as they continue their quest for economic growth.
The meeting will see the Prime Minister and Chancellor seek to persuade bosses from businesses including Tesco TSCO, BT BT.A, Unilever ULVR and Lloyds Banking Group LLOY that they are committed to helping the private sector thrive as they attempt to attract more investment to the UK.
It will also see the announcement of further changes to pension rules designed to increase the amount of money available for investment in the UK.
Ahead of the meeting, Starmer said: “To achieve the change our country needs requires nothing short of rewiring the economy.
“It needs creative reform, the removal of hurdles and unrelenting focus. Whether it’s how public services are run, regulation or pension rules, my government will not accept the status quo.”
Reeves said business and government were “united on growth being the top priority”, adding that she was “fighting every day to tear down the biggest barriers to growth, taking on regulators, planning processes and opposition to this urgent mission”.
Tuesday’s meeting follows a difficult period for the government, which has seen stuttering growth figures and rising borrowing costs threaten its plans for improving public services.
At the same time, businesses have expressed increasing pessimism about their prospects for the coming year, including in light of a Budget that increased employers' national insurance contributions—an outlook both Starmer and Reeves will be keen to address with business leaders.
The chancellor has planned a major speech on Wednesday, which is expected to focus on growth, including further reforms to the planning system, deregulation and boosting trade and investment.
But she is also likely to face questions over the government’s policy on building a third runway at Heathrow Airport, something several cabinet members have previously spoken out against but which the plan’s backers have argued would boost growth.
The third runway was the only point of dissent during the chancellor’s appearance at the Parliamentary Labour Party’s weekly meeting on Monday, according to her spokesman, with MPs otherwise expressing “overwhelming support” for her.
During the meeting, the chancellor told Labour MPs the government needed to go “further and faster” on growth and “must start saying ‘yes’” to major projects.
Tuesday’s meeting also comes as the government announces a major change to the rules governing pension funds in a bid to free up more money for investment in British businesses.
Under the plans, defined benefit pension schemes that are in surplus will have more flexibility to invest some of that money in their sponsoring employers.
Around 75% of defined benefit schemes are currently in surplus, with the government saying up to £160 billion could be made available for investment.
The Investment Association’s Jonathan Lipkin said that, with “the right guardrails in place”, the proposals “could help channel more funding into the economy by enabling schemes to invest more widely and take on greater risk, while allowing for members to receive an uplift to their pension benefits.”
Unlocking investment from pension funds has been an aim of both the current chancellor and her predecessor, Jeremy Hunt, who have seen a limited appetite among pension funds for investing in UK assets as an obstacle to growth, choking off the funds available for both infrastructure projects and British businesses.
By Christopher McKeon, PA Political Correspondent
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