The chancellor's business adviser has warned that government machinery has already been “frozen for six weeks”, and warned that changing the prime minister is a “huge waste of energy” at a time when British business needs decisions, not delays.
Alex Depledge, a businessman who was appointed by Rachel Reeves as an adviser last June, said he feared Whitehall would remain stagnant for months while new political leadership was installed.
“We're going to lose six months, maybe a year when you start informing new ministers. It's just a huge waste of energy. The British people deserve better,” he told an audience of business leaders at The Times Entrepreneurs Network Live event in London.
Depledge, founder and former chief executive of property technology platform Resi, made his comments a day after Sir Keir Starmer resigned as prime minister, paving the way for Andy Burnham to become the next leader. Reeves' future as chancellor is unclear.
The intervention is the latest warning from business about the costs of long-term uncertainty in Westminster, a theme that has dominated boardroom discussions since founders and MPs began warning that Britain's tax system is, in effect, telling businesses to leave.
Depledge said it is now very difficult to make tangible progress within the government. “It's about showing what we can do within the limits we're allowed to work with,” he said. “There are things we can no longer do, but there are others you can do.
“My biggest fear is that I have to spend another year trying to get new ministers and new people to understand the burning stage and the need to move quickly.”
Separately, Gareth Quarry, a Labor donor, investor and long-time director of SSQ legal services, called for Wes Streeting to be the next chancellor.
Quarry, a former Conservative donor who gave £150,000 to Labor before the general election, said: “Wes would make a very good chancellor because the City wouldn't be bothered by him. I'm a businessman with a number of businesses. And I hold significant assets in gilts.”
He said Streeting would “command the respect” of City, adding: “And that will be the basis for what's next. That assumes she won't continue to be Rachel.”
One Labor donor and business leader, speaking confidentially, said Ed Miliband had “wild ideas” and “clearly doesn't understand what energy security means”. They added that Reeves, “who said that even though he made mistakes, there will be no negative consequences” if he continues to be a councillor.
The succession debate comes on the back of growing concern among wealth creators, with Reeves repeatedly warning of “anti-business tax rises” and mounting evidence that Britain is facing the biggest outflow of billionaires of any major economy.
Also speaking at the TEN Live event, Harry Stebbings, who has invested more than $550 million in promising young companies in a series of venture capital funds and is the founder of the popular tech podcast 20VC, said that, if asked, he would advise Burnham not to raise taxes on investors and entrepreneurs.
“Don't introduce wealth tax, we will all go,” he said. “I looked at Monaco and it's not as good as Dubai. Maybe Milan or Athens. Touching the wealth tax would really kill the investor side and the founder side.”
His warning echoes that of the Institute for Fiscal Studies, which has warned that if the annual wealth tax is concentrated more heavily on the super-rich, it will encourage them to leave, or never come to the UK in the first place.
Stebbings, who has previously argued that the UK should adopt a zero-earnings rate for global talent, said the priority should be attracting and retaining people who build companies.
“The most important thing is that we get the talent build in an amazing way [companies] in the UK. Let's provide incredibly easy access for highly skilled people to come and build in our country. The income is tax free in the first year, why not?
“If you are an amazing entrepreneur and you want to build your company in this country, we will not give you much profit in the life of your business. We can create so much, and this is a crime of politicians, that none of them have found the right job. When it comes to creating and finding a solution that works for the country, 'let's go back to the think tank'.”
For Britain's founding fathers, the message from the chamber was clear: the country cannot spend another year with its hands tied while Westminster checks who is in charge.
