The UK business secretary, Peter Kyle, has said he is “betting big” and “picking winners” as the government takes direct stakes in growing businesses to boost economic growth.
Speaking at the World Economic Forum in Davos, where he and the chancellor, Rachel Reeves, have been talking up Britain’s prospects, Kyle said ministers were taking an “activist” approach to industrial policy.
The idea of “picking winners” is closely associated with the Conservative prime minister Margaret Thatcher’s attacks on Labour’s 1970s strategy and her argument that it should be the private sector that decides which companies thrive.
Kyle was unabashed about invoking the phrase, arguing a muscular approach could accelerate economic growth. “I want to make sure that the benefits of growth are felt quicker than is currently the case. We’re predicted to grow 1.5% this year. That is not enough.”
He highlighted the recent decision to allow the £26bn state-owned British Business Bank to buy equity stakes in companies, including the announcement last week of a £25m investment in the energy supplier Octopus’s software spin-off, Kraken.
“The most potential in our economy, in the short and medium term, is scale-up companies,” Kyle said. “I was at Octopus yesterday. They’re now employing 1,500 people in their head office in London alone.
“We can find other companies that are on that kind of trajectory and we can expedite their growth. Then 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.”
“I am betting big. And I am picking winners,” he added. “It’s more activist. And there will be things that don’t work out, sure. But to have a healthy economy, failure leads to success.”
This week’s summit in the Swiss ski resort has been overshadowed by Donald Trump’s threat to slap tariffs on eight European countries if they stood in the way of his hopes of annexing Greenland.
The president backed away from the idea of punitive import taxes on Wednesday evening, after discussions with the secretary general of Nato, Mark Rutte, but several leaders in the Swiss ski resort have said the global economic order has irrevocably changed.
Kyle insisted international uncertainty was no reason not to press ahead with Labour’s agenda, highlighting the prospects of a “wave of opportunity that technology and life sciences and all these huge, huge, positive waves of innovation are going to present to us”.
He said: “If we are too intimidated by the global challenges, if we are too distracted by domestic political to and fro, then we will take our eye off the ball, and we will miss the opportunity of a lifetime, and that means real things to real people.
“There will be kids growing up like me that will not end up becoming successful like I have….
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