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. It’ll be communities that, at the moment, are poor, and they will never have a hope of becoming prosperous. And I won’t stand for it. I would literally do anything. And if that means betting [on] winners, and getting it wrong from time to time, I’ll take it.”
Announcing the beefing up of the government’s “global talent taskforce” in his department, the business secretary suggested that the UK hoped to capitalise on the instability unleashed by Trump’s policies to help it attract jobs and investment.
“I will suck the best talent in from wherever it exists, and talent goes both ways across the Atlantic. And I want to make sure that we have a good balance in that because for too long it’s been in one direction,” he said.
Highlighting the need to attract innovators in particular, Kyle added: “America is being disruptive with tariffs, but America isn’t the most friendly place for scientific endeavour in any case at the moment. Do the maths and add up where we’re going with this. We are going out there and we’re saying: ‘Actually, we have one of the best regulatory environments in the world for life sciences, and across the board.’”
Keir Starmer has taken a tough line on migration – despite pushback from some quarters in the party – promising to reduce it and condemning Boris Johnson’s administration for what the prime minister has called an “open borders experiment”.
But Kyle said he did not think public scepticism about migration extended to wealthy entrepreneurs. “People are deeply concerned about the immigration system we inherited, and the asylum system, which was overwhelmed, and was poorly administered by the Tories, and therefore broken,” he said.
“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.”
He added: “I have a taskforce that’s doing this, embedded in our global network. We can offer the world’s most talented a bespoke package to come to the UK swiftly, to embed, and then, of course, be part of a funding landscape that is bountiful.”
The 55-year-old MP for Hove and Portslade has been business secretary since Starmer’s September reshuffle, replacing Jonathan Reynolds, who had done the job for several years in opposition.
Kyle is politically close to the health secretary, Wes Streeting – who has been repeatedly mooted as a potential challenger to Starmer – but has been scrupulously loyal to the prime minister in public.
Earlier this week, the business secretary rejected the suggestion that the UK try to negotiate a customs union with the EU, for which Streeting has signalled his support, telling the FT: “I think at the moment it would be foolish to slip towards what would be simple solutions.”
Kyle has dyslexia and left his state school “without any usable” qualifications, as he has put it. He made his way to university aged 25, and went on to secure a PhD, then worked in the charity sector before entering politics.
In his previous job of technology secretary, he was forced to defend his closeness to powerful tech companies. He is a regular user of the chatbot ChatGPT and an evangelist for the opportunities offered by the technology – and is often seen in the casual garb favoured by “tech bros”.
Soon after taking on his current role, Kyle struck a deal with business groups and trade unions to water down the implementation of Labour’s Employment Rights Act, introducing a six-month probation period before the promised “day-tone rights” come into force.
He has continued to work closely with his successor and friend, Liz Kendall, and said he has insisted the connecting door that blocked the corridor between their two offices be opened up.
Asked whether AI would cause mass layoffs as companies decide they can manage without entry-level staff – a hot topic at Davos – Kyle said: “People are anxious and it’s going to be painful and difficult because change is always painful and difficult.”
Kyle said Labour was ready to intervene to ensure the adoption of AI was less painful for poorer communities than the deindustrialisation of the 1980s, which cast a long shadow.
He said: “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.
“As tech secretary I was negotiating deals for investment in digital infrastructure, insisting it happened in poorer parts of the country. I’m the gatekeeper into our country for a lot of investors. And if they want to come and benefit from our country, then they can contribute to it as well.”
