In a bold declaration at the annual World Economic Forum in Davos, Switzerland, UK Business Secretary Peter Kyle has announced an "activist" approach to industrial policy, centred on "betting big" and "picking winners" to accelerate economic growth. Speaking alongside Chancellor Rachel Reeves, who has been promoting Britain's prospects at the summit, Kyle emphasised the government's commitment to taking direct stakes in growing businesses through initiatives like the state-owned British Business Bank.
A Muscular Approach to Economic Expansion
Kyle's strategy marks a significant shift, invoking a phrase historically associated with Conservative critiques of Labour's 1970s policies. He argued that a more interventionist stance is necessary to ensure the benefits of growth are felt more swiftly across the UK. "We're predicted to grow 1.5% this year. That is not enough," Kyle stated, highlighting the need for faster progress.
He pointed to recent government actions, such as a £25 million investment in Octopus Energy's software spin-off, Kraken, as examples of this proactive approach. "The most potential in our economy, in the short and medium term, is scale-up companies," Kyle explained, noting that Octopus now employs 1,500 people in its London head office alone.
Scaling Up and Creating Wealth
By identifying and supporting companies on similar growth trajectories, Kyle believes the government can expedite job creation and wealth generation. "It will create thousands of new jobs, and it will create enormous amounts of wealth, which will recycle through the economy in a really fast way," he said. This approach, while acknowledging potential failures, is framed as essential for a healthy economy where "failure leads to success."
The Davos summit, however, has been overshadowed by global uncertainties, including former US President Donald Trump's tariff threats. Despite this, Kyle insisted that international instability should not deter Labour's agenda, emphasising opportunities in technology and life sciences.
Attracting Global Talent Amid Uncertainty
Kyle announced the strengthening of the government's "global talent taskforce," aiming to capitalise on disruptions caused by Trump's policies to attract jobs and investment to the UK. "I will suck the best talent in from wherever it exists," he declared, highlighting the UK's favourable regulatory environment for sectors like life sciences.
He distinguished between public concerns over immigration and the welcome extended to wealthy entrepreneurs. "I've never had anybody that says that people with a lot of money to invest in our country, who want to come here and create jobs, create businesses, shouldn't be coming to do so," Kyle noted, offering bespoke packages to attract innovators.
Personal Background and Political Loyalty
The 55-year-old MP for Hove and Portslade, who became Business Secretary in September, brings a unique perspective to the role. With dyslexia and a background that saw him leave school without formal qualifications before earning a PhD and working in the charity sector, Kyle is passionate about ensuring growth benefits poorer regions.
Politically close to Health Secretary Wes Streeting, Kyle has remained publicly loyal to Prime Minister Keir Starmer, recently rejecting suggestions of a customs union with the EU as "foolish."
AI and Future Challenges
As a former Technology Secretary and self-described AI evangelist, Kyle addressed concerns about artificial intelligence causing job losses. "People are anxious and it's going to be painful and difficult because change is always painful and difficult," he acknowledged, but vowed that Labour would intervene to prevent a repeat of the damaging deindustrialisation of the 1980s.
"Waves of industrial change have always gone badly when governments stand on the sidelines and are not participants. And I will not allow that to happen," Kyle asserted, emphasising his role in directing investment to poorer areas.
Through this comprehensive strategy, Peter Kyle aims to position the UK as a leader in innovation and economic resilience, betting on a future where growth is both accelerated and inclusive.
