Keir Starmer: Why an interventionist government is good for growth
In a time of conflict and global economic strife, governments have to be active and interventionist to change the failing status quo. That is what we’re doing in the UK and we are delivering results.
On Wednesday we struck our fifth trade deal in less than two years, finalising a new agreement with the six economies of the Gulf Cooperation Council — an economic bloc worth more than $2 trillion. The UK is the first G7 economy to deliver a trade agreement with this group.
Recent months have shown the strength of our ties with Gulf countries. Our pilots and anti-drone crews have put themselves in harm’s way to defend these nations from Iranian strikes. The region is a much-loved destination for hundreds of thousands of British citizens.
This new agreement deepens that partnership, delivering a major boost to trade and investment and real, tangible benefits for the British people.
By slashing tariffs in key areas like food, medical equipment and advanced manufacturing, as well as boosting access for our services providers, our economy stands to gain around £3.7 billion each year from this deal, supporting thousands of well-paid jobs. This means a boost of £1.9 billion a year to real wages for working people. Previous governments weakened our global connections. They damaged our ability to trade and navigate international crises. I pledged we would be different and we have delivered by removing international trade barriers for British businesses at an unprecedented rate.
Our trade agreement in the Gulf comes hot on the heels of our groundbreaking deals with India as one of the world’s fastest-growing economies; the US as the world’s richest economy; the EU as our closest trading partner; and South Korea as one of the world’s most technologically advanced economies.
In total we have secured £360 billion of investment into the UK since the general election, securing around 170,000 jobs.
This matters because it means real change and real hope in communities across the country. Our trade deals have saved and supported jobs in their thousands in sectors like car manufacturing, steel and aluminium exports, pharmaceuticals, Scotch whisky and more.
I was at Jaguar Land Rover in the West Midlands when we struck that deal with the US. No one who looks those workers and their families in the eye could doubt how much this matters.
That is what drives me forward. It’s what drives our whole economic approach. And in the face of serious global challenges, the facts show we are making progress.
It was confirmed last week that the UK recorded the highest growth in the G7 in the first quarter of the year. Inflation is down. The International Monetary Fund has upgraded its forecasts for our economy.
This shows that we have the right economic plan and that it is starting to bear fruit and deliver for the British people. It makes us more resilient and better able to support our people with the cost of living, including the measures we have taken this week to extend the fuel duty cut until the end of this year and cut bus fares for children over the summer holidays.
So when I talk about being more activist and interventionist, I mean it in every area, whether that is trade and investment, helping families, strengthening our security and our defence industry, building Great British Energy, or boosting our economy as a whole.
Crucially, I am clear we will do this not by working against good businesses, but by helping them to thrive.
That’s why last week in the King’s Speech , we confirmed a new raft of support for small businesses, including the strongest action on unpaid invoices since 1998. Last month we doubled tax breaks for enterprise. We’re smashing through planning barriers, pursuing regulatory innovation and massively increasing the investment firepower of our public institutions.
All of this comes together under our ten-year modern industrial strategy, which is focused on supporting the sectors this country needs to grow and succeed, and provide the next generation the great jobs they deserve.
This is about building a genuine partnership with business — and we’ve already shown what this can deliver.
Just last month, the government’s Sovereign AI Fund backed a new British start-up , Ineffable Intelligence, helping it to attract more than £800 million of investment, anchoring world-leading AI here in the UK.
Or look at Universal. I personally met with them in the US and the UK to encourage them to invest. They are now building their first theme park and resort anywhere in Europe, in Bedford. This means 20,000 construction jobs, 8,000 permanent jobs and a £50 billion boost to the economy.
Or when Norway were looking to build their next generation of frigates, we worked with British industry and the Norwegian government to make sure that our brilliant shipbuilders won the competition. That deal will support 4,000 British jobs right across the supply chain, including over 200 small businesses across Scotland, the northwest and the West Midlands.
These are just a few examples, but they illustrate our approach: getting out there, championing this country and delivering real results, despite the global headwinds. So we will keep going further. I will keep using every lever we have, at home and abroad, to deliver jobs, growth and opportunities for the British people.
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James Carroll
Special Adviser for Business Relations
Prime Minister’s Business, Investment and Trade Unit
10 Downing Street, London, SW1A 2AA
Mobile: 07442 835 552 | Email: [email protected] <[email protected]>
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