'Case for investment in Britain crumbling under Starmer', warns McVitie’s boss
25 November 2024, 12:22
The boss of McVitie's has warned that it's becoming harder to argue for investment in Britain under the Labour government.
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Salman Amin, who runs the biscuit giant's parent company Pladis, said his business had been confident in investing in the UK over the past ten years - but that this had changed.
His comments follow remarks by the head of the Confederation of British Industry (CBI), who warned that tax rises in the Budget were making businesses wary of hiring and investing in the UK.
Labour under Starmer previously touted its pro-business credentials, and has vowed to increase foreign direct investment in the UK.
Speaking at the CBI's annual conference on Monday, Mr Amin said: "Historically, we've been super bullish on the United Kingdom.
"In fact, by far our greatest investment across all of our countries over the last decade or so has come to the UK."
Pladis has 12 locations in the UK, including several factories. As well as McVitie's the multinational company owns several other well-known brands including Jacob's and Carr's.
Mr Amin added: "Going forward, it's becoming harder to understand what the case for investment is.
"Small amounts one can understand, but the quantums that I think we need to make a difference in the growth rate of the economy are in the order of tens of millions every year.
"In the last couple of years, it's just become a lot harder to really see how does that play out."
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In the October Budget, Chancellor Rachel Reeves announced a nearly £70 billion uplift in public spending, partly funded by sharp increases in business taxes such as employer national insurance contributions.
Labour also raised the minimum wage, in a move praised by workers' groups and unions, but which businesses have said will force them to pass on some costs to consumers, hire fewer people or make less profit.
Earlier, CBI chief Rain Newton-Smith said: "Across the board, in so many sectors, margins are being squeezed and profits are being hit by a tough trading environment that just got tougher.
"And here's the rub, profits aren't just extra money for companies to stuff in a pillowcase. Profits are investment... When you hit profits, you hit competitiveness, you hit investment, you hit growth."
Ms Newton-Smith added: "What really defines growth is the decisions made in boardrooms up and down the country."It's CFOs and CEOs asking: can we afford to invest? Can we afford to expand? Can we afford to take a chance on new people?
"Well after the Budget, the answer we're hearing from so many firms is still 'not yet'."
Ms Newton-Smith said: "Tax rises like this must never again be simply done to business.
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"That's the road to unintended consequences. From now on we need an elevated partnership for a higher purpose.
"Too many businesses are having to compromise on their plans for growth. We can't let that stand and not act."
Last week, a closely-watched monthly business survey suggested that activity across the UK's private sector contracted in the first weeks of November, amid a drop in firms' confidence after the Budget tax rises.
A Government spokesperson said: "Last month we delivered a once in Parliament budget to wipe the slate clean and deliver change by investing to repair the NHS and rebuild Britain, while ensuring working people don't face higher taxes in their payslips.
"That meant difficult choices to repair the public finances and to put public finances on a firmer footing. However, the alternatives were more austerity, more decline and more instability that would have left businesses and working people worse off.
"Despite the difficult inheritance, the Government is determined to go for growth and to work in partnership with businesses to invest in Britain's future so we can make every part of the country better off. That is why the Government is reforming the planning system, tackling barriers to trade and taking forward the £63 billion of private sector investment announced at the International Investment Summit."
