Business
Can Labour reverse ‘desperate loss of faith’ from business?
Simon JackBusiness editor
WPA Pool/Getty ImagesOne of the key audiences that the prime minister and the chancellor will have to convince at this year’s Labour conference are the business leaders they targeted with a charm offensive before the election last July.
The party trumpeted itself as “the natural party of business” and Rachel Reeves told anyone and everyone that this would be “the most pro-business government this country has ever seen”.
Labour had some big business beasts backing them. Billionaire mobile phone tycoon John Caudwell – a long-time Conservative supporter – switched his backing to Labour.
Some 120 business leaders signed a letter which read: “We, as leaders and investors in British business, believe that it is time for a change. For too long now, our economy has been beset by instability, stagnation, and a lack of long-term focus.
“Labour has shown it has changed and wants to work with business to achieve the UK’s full economic potential.”
But post-election, the party sent a different message – warning of tough choices and hard times ahead, and delivered a Budget to prove it.
That Budget, says John Caudwell, with its £25bn rise in employers’ National Insurance, undid a lot of the goodwill the chancellor had garnered.
“I think there was a desperate loss of faith from the business community in general from the last Budget,” he says. “I think people were shocked at the level of negative components for businesses.”
On top of that NI rise, the National Living Wage was hiked by an inflation-busting 6.7%, with a rise of 16% for 18 to 20-year-olds.
Mr Caudwell says he understands that Labour needed to raise money to shore up the public finances but felt it hit some sectors unduly hard.
“Even if you say they needed to be done, certain aspects were very unfair. So if you look at the increase in employers’ NI, that really badly hit those businesses that employ tens of thousands of people on low wages, because they got hit by minimum wage and they got hit by the NI.”
PAOther small business owners have also told the BBC they have lost confidence.
Rachel Carrell is the boss of childcare firm Koru Kids and signed that letter in 2024. She says she hopes the government can restore business confidence over the rest of the parliament.
“I wouldn’t sign that letter today but they’ve got three or four years to turn this around. That’s a really long time.”
She believes there’s an opportunity to fix things in the upcoming Budget, but says “they need to move quickly”.
While anecdotal evidence of crumbling business confidence is not hard to find, official measures show a mixed picture.
The Institute of Directors’ confidence measure shows a steep fall after the last election, which compilers put down to immediate warnings issued by the government once in power that tough times and tough choices lay ahead.
That was duly delivered on by the Budget and has hovered near those lows ever since.
However, the government’s favourite index to quote is the Lloyds Bank confidence survey, which shows confidence on the future is much more robust.
Other measures, including the ICAEW and the S&P PMI measures, tend to support a more gloomy outlook.
That in turn is supported by the number of businesses looking to recruit.
Job vacancies have been on a downward trend since the Covid pandemic and there are 150,000 fewer staff on payrolls now than there were before the Budget bombshell, with a large part of those jobs going in hospitality.
However, there is widespread hope among smaller businesses that the long-promised overhaul of business rates will come soon and in their favour.
The government points understandably to the enormous amounts of money pledged recently when tech royalty from Apple, Nvidia, Microsoft and others met real royalty at US President Donald Trump’s recent state visit.
John Caudwell welcomed it too.
“I hear a lot of negativity about government – we hear about rich people leaving and they are useful to the UK economy, but they’re not as useful as the £150bn of inward investment that we’ve got coming into the country to create high-paid jobs in high-technological businesses. So we have to get a balanced view on that.”
Mark Hargreaves runs a trolley and tray manufacturing and export business in Peckham, south London. He is less impressed with the razzamatazz surrounding the tech billionaires and their largesse.
“I’m sure it’s very important to get these racy high-growth sectors to invest here. But what about the less exciting bits of the economy – the ones who are always here? We feel forgotten.
“I was hopeful that a new government would give us some help but all my costs have gone up – my business rates have doubled. I’m more cautious about investing in a new machine, a new product, hiring a new person.”
The new Employment Rights Bill, which confers greater rights and protections on employees from day one, is also adding to employers’ reluctance to take on new staff.

The government has made much of its plans to sweep away impediments to economic growth and has seen that acknowledged by some of the biggest investors in UK infrastructure.
Just months after Labour entered Downing Street, Scottish Power announced a £24bn UK investment.
Keith Anderson, chief executive of Scottish Power, says: “The government has taken on the planning bogeyman to unlock growth and get us building. That’s why the UK is now Iberdrola’s biggest investment destination globally.”
Rain Newton-Smith, director general of the employers group the CBI, also gives the government high marks on the international stage.
“I think this government have navigated really difficult geopolitics. We’ve got a better deal with the US than others, we’re forging a closer relationship with Europe and they got the deal with India.
“They’ve got a lot of work done internationally, and that does count. But they’ve really got to dial up delivery, and make sure that they they learn from the mistakes of last autumn.”
Business confidence is a vital but fragile thing. It’s a key ingredient for any government hoping that economic growth will pay for its other spending commitments – on heath, defence and welfare.
Labour has a job on its hands at conference, and at the Budget, to restore the animal spirits of UK business.
Business
Budget 2026: CII pitches demand-led disinvestment plan; proposes four-step privatisation roadmap – The Times of India
The Confederation of Indian Industry (CII) suggested a four-fold privatisation process in their recommendations on the Union Budget 2026-27. They called for faster and more predictable disinvestment. The industry body claimed that a calibrated privatisation approach would help sustain capital expenditure and fund development priorities, particularly in sectors where private participation can improve efficiency, technology adoption, and competitiveness. CII Director General Chandrajit Banerjee highlighted the role of private enterprise in India’s growth. “A forward-looking privatisation policy, aligned with the vision of Viksit Bharat, will enable the government to focus on its core functions while empowering the private sector to accelerate industrial transformation and job creation,” he said, as quoted by ANI. To accelerate the government’s exit from non-strategic Public Sector Enterprises (PSEs), CII outlined a four-pronged strategy. First, CII recommended adopting a demand-led approach for selecting PSEs for privatisation. Contrary to short-listing entities and then checking the appetite for them, it was proposed that government needs to start by measuring market interest for a larger list of entities and short-list those with better interest and valuation. Second, the industry body called for announcing a rolling three-year privatisation pipeline in advance. According to CII, greater visibility would give investors time to plan, deepen participation, and improve price discovery. Third, CII proposed setting up a dedicated institutional mechanism to oversee privatisation. This would include a ministerial board for strategic direction, an advisory panel of industry and legal experts, and a professional execution team to handle due diligence, market engagement, and regulatory coordination. Fourth, acknowledging that complete privatisation is complex and time-consuming, CII suggested a calibrated disinvestment route as an interim measure. The government could initially reduce its stake in listed PSEs to 51 per cent, retaining management control, and later bring it down further to between 33 per cent and 26 per cent. CII estimated that lowering government ownership to 51 per cent in 78 listed PSEs could unlock nearly Rs 10 lakh crore. In the first two years, disinvestment in 55 PSEs could raise about Rs 4.6 lakh crore, followed by Rs 5.4 lakh crore from 23 additional enterprises. “A calibrated reduction of government stake balances strategic control with value creation,” Banerjee said, adding that the proceeds could fund healthcare, education, green infrastructure, and fiscal consolidation while maintaining control in strategic sectors. The Union Budget for 2026–27 will be presented on February 1.
Business
The FTSE 100 has hit a record high. Is now the time to start investing?
Kevin PeacheyCost of living correspondent
Getty ImagesAs the new year got into its stride, so did the UK’s index of leading shares.
The FTSE 100 climbed above 10,000 points for the first time since it was created in 1984, cheering investors – and the chancellor, who wants more of us to move money out of cash savings and into investments.
The index tracks the performance of the 100 largest companies listed on the London Stock Exchange and rose by more than a fifth in 2025.
But with many people still struggling with everyday costs, and with talk of some stocks being overvalued, does the FTSE’s success really make it a good time to encourage first-time investors?
Investing v saving
People can invest their money in many different ways and in different things. Various apps and platforms have made it easy to do.
Crucially, the value of investments can go up and down. Invest £100 and there is no guarantee that the investment is still worth £100 after a month, a year, or 10 years.
But, in general, long-term investments can be lucrative. The rise of the FTSE 100 is evidence of that. Shareholders may also receive dividends, which they could take as income or reinvest.
For years, the advice has been to treat investments as a long-term strategy. Give it time, and your pot of money will grow much bigger than if it was in a savings account.
In contrast, cash savings are much more steady and safe. The amount of interest varies between account providers, but savers know what returns will be. Savings rates have held up quite well over the last year, but interest rates are generally thought to be on the way down.
Savings accounts are popular when putting money aside for emergencies, or for holidays, a wedding or a car – for one predominant reason: you can usually withdraw the money quickly and easily.
“It is important that everyone has savings. It gives you access when you need it,” says Anna Bowes, savings expert at financial advisers The Private Office (TPO).
“It means you do not need to cash out your investments at the wrong time.”
Getty ImagesEvangelists for investing agree that savings are an important part of the mix for everyone managing their money.
“People starting out should have a cash buffer in case of emergency before going into investing,” says Jema Arnold, a voluntary non-executive director at the UK Individual Shareholders Society (ShareSoc).
One in 10 people have no cash savings, and another 21% have less than £1,000 to draw on in an emergency, according to the regulator, the Financial Conduct Authority (FCA).
But Arnold and others point out that cash is not without risk either. As time goes on, the spending power of savings is eroded by the rising cost of living, unless the savings account interest rate beats inflation.
Risk and reward
Our brains make a judgement about risk and reward thousands of times every day. We consider the risk of crossing the road against the reward of getting to the other side and so on.
With money, those who are more risk-averse have tended to stick with savings, while others have moved into investments. It also helps if you have money you can afford to lose.
It is worth remembering that millions of people already have money for their pension invested, although it is often managed for them and they may not pay much attention to it.
The FCA says seven million adults in the UK with £10,000 or more in cash savings could receive better returns through investing.
Chancellor Rachel Reeves has advocated more risk-taking from consumers. For those with the money, she says the benefit of long-term investing for them, and the UK economy as a whole, is clear.
She is altering rules on tax-free Isas (Individual Savings Accounts) in a much-debated move aimed at encouraging investing.
It is also why, in a couple of months’ time, we are all going to be blitzed with an advertising campaign (funded by the investment industry) telling us to give investing some thought.
It will be a modern version of the Tell Sid campaign of the 1980s, which encouraged people to invest in the newly privatised British Gas.
British GasBut is this a good time for such a campaign? Back then, lots of people invested in British Gas for a relatively quick profit.
Invest now, and there is a chance the value of your investment could take a short-term hit.
A host of commentators have suggested an AI tech bubble is about to burst. In other words, they say there is a chance the value of companies heavily into AI has been over-inflated and will plunge – meaning anyone investing in those companies will see the value of those investments plunge too.
It isn’t only commentators. The Bank of England has warned of a “sharp correction” in the value of major tech companies. America’s top banker Jamie Dimon, the chief executive of US bank JP Morgan, said he was worried, and Google boss Sundar Pichai told the BBC there was “irrationality” in the current AI boom.
In truth, nobody really knows if and when this will happen.
New rules on getting investment help
All of this may leave people keen for some help, and the regulator has come up with plans to allow banks to offer some assistance.
Currently financial advice can be expensive, and regulated advisers may not bother with anyone who hasn’t got tens of thousands of pounds to invest.
Financial influencers have tried to fill the gap on social media. Some have been accused of promoting financial schemes and risky trading strategies with glitzy get-rich-quick promises in front of fancy cars – but without authorisation or any explanation of the risks involved.
Some first-time investors have turned to AI for tips. Some are vulnerable to fraudsters offering investment opportunities that are too good to be true.
Nearly one in five people turned to family, friends or social media for help making financial decisions, according to a survey by the FCA.
So, from April, registered banks and other financial firms will be allowed to offer targeted support, preferably for free. It will stop short of individually tailored advice, which can only be provided by an authorised financial adviser for a fee. But it will allow them to make investment and pensions recommendations to customers based on what similar groups of people could do with their money.
It is a big change in money guidance but, as with investments, no guarantees that it will be successful.
Business
Budget 2026: Punjab, Telangana flag higher fiscal burden under VB-G RAM G; seek more central funds – The Times of India
Opposition-ruled states Punjab and Telangana on Saturday sought additional fiscal support from the Centre in the Union Budget 2026-27, arguing that the proposed Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G) will place a heavier financial burden on states due to its revised cost-sharing formula, PTI reported.The demands were raised at the pre-Budget meeting chaired by Union Finance Minister Nirmala Sitharaman, which was attended by finance ministers of states and Union Territories, along with Union Minister of State for Finance Pankaj Chaudhary. The meeting also saw participation from the Governor of Manipur, chief ministers of Delhi, Goa, Haryana, Jammu and Kashmir, Meghalaya and Sikkim, and deputy chief ministers of several states, including Telangana.Opposition-ruled states said the changes to the rural employment framework weaken the employment guarantee and go against the spirit of cooperative federalism.Parliament last month passed the VB-G RAM G Bill, replacing the two-decade-old Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). Under the new scheme, the Centre will bear 60 per cent of the cost and states 40 per cent, compared with the 90:10 funding pattern under MGNREGA.Punjab Finance Minister Harpal Singh Cheema strongly opposed the proposed changes, saying the new framework dilutes the employment guarantee while shifting a significant financial burden to states.“Proposed MGNREGA changes weaken employment guarantee and burden states,” Cheema said at the meeting, calling for the restoration of the original demand-driven structure and funding pattern of the scheme.Telangana Finance Minister Mallu Bhatti Vikramarka said the Union government had replaced MGNREGA with VB-G RAM G without consulting states. He noted that the shift from a 90:10 to 60:40 funding ratio would further strain state finances.He also pointed out that any additional man-days beyond the normative allocation would now have to be borne by states, which would create a serious obstacle in providing demand-based work to job seekers.“This is entirely against the spirit of cooperative federalism and starving them of funds for capital outlay, which is essential for maintaining growth momentum,” Vikramarka said.The Telangana finance minister also suggested that surcharges on income tax and corporation tax be credited to a non-lapsable infrastructure fund, from which states could receive grants for infrastructure development. Alternatively, he said, surcharges should be merged with basic tax rates to expand the divisible pool of central taxes.On GST reforms, Vikramarka said GST 2.0 may boost demand but questioned its sustainability, warning that states’ revenues could fall due to rate reductions. He called for a suitable mechanism to compensate states for any revenue loss.Punjab also sought a special fiscal package, citing the “double whammy” of border tensions and floods in 2025. On GST, Cheema said Punjab is facing an annual revenue loss of nearly Rs 6,000 crore following GST 2.0 and pressed for a predictable GST stabilisation or compensation mechanism for states.
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