Birmingham, Brexit, and the Budget – what the Regional Investment Summit told us about the government’s growth plan and electoral strategy

Last year’s investment summit was all about the UK’s global ambitions. The message was clear: Britain wanted to be seen as a magnet for international capital, a place where global investors could find opportunity and innovation. Fast forward to this year’s Regional Investment Summit in Birmingham, where Chancellor Rachel Reeves spoke about seeing “a country primed for economic success”, if only we weren’t still slowed down by Brexit and red tape.

Reeves put partnership between government, business, and local leaders front and centre, promising to “boldly regulate for growth” so economic benefits reach every region. 

The regional bit was no gimmick

For those listening closely, it may have felt like the government was, for the first time, trying to coherently explain how they were not only looking to grow the economy but do so by tackling persistent economic disparities between the different regions in the process. 

Reeves acknowledged that previous governments had left parts of the country out from investment, and that her review of the Treasury’s own Green Book earlier in the year meant government was better able to appraise investment proposals to support regional growth. Now, Liverpool, Plymouth, Port Talbot, and Birmingham will be the first to trial new place-based business cases. Since the speech, independent figures confirmed that Keir Starmer has spent more on ‘levelling up projects’ in his first year than any of his Tory predecessors did in the same timescale.

Red tape and reform

Alongside this, what really stood out was the emphasis on regulatory reform and public sector investment, now. Reeves followed through on her action plan from March for a 25% cut in the administrative costs of regulation, alongside referencing changes to planning rules (the new Planning and Infrastructure Bill set to deliver £2 billion in savings over the next decade) and faster approvals for major infrastructure projects. 

Her key announcements focussed on skills, with a new strategy for developing the workforce, and reforms to the visa system to attract global talent, enabling innovation and a cross-economy AI sandbox to accelerate approvals for AI in sectors like legal services and advanced manufacturing. 

Trying to sound energetic, there was plenty of corporate name dropping and signposts to business investment, all enabled and attracted as a multiplier effect of this government’s place-based approach and reforms. 

Tory mess and Brexit

Her diagnosis on obstacles and challenges was less political as she saved herself the explicit reference to “the Tory mess the government inherited” but pointed the finger at their legacy nonetheless: austerity and Brexit. 

Doubling down on remarks from the weekend where the Chancellor told an international group of finance ministers and central bankers that the UK's productivity challenge had been compounded by the way in which the UK had left the European Union, Reeves stressed that: “Brexit had a bigger impact on our economy than even was projected back then. That's why we are unashamedly rebuilding our relations with the European Union to reduce some of those costs that were, in my view, sort of needlessly added to businesses since 2016 and since we sort of formally left a few years ago.”

New agreements with the EU will reduce red tape for food and farming businesses, alongside scrapping needless corporate reporting requirements. Ministers hope the reforms will reduce the cost to business of complying with regulation by £1.5 billion a year and up to £6 billion a year by the end of the decade. These common-sense moves draw a line from Labour’s early promises to “fix the foundations” through last year’s Budget to today.

Next month’s Budget and electoral strategy

Looking ahead, Reeves teed up next month’s Budget: “It will take the necessary steps to secure those foundations and that stability for the future,” she promised, aiming to unlock investment and create an environment where businesses can invest with confidence. 

Stopping short of acknowledging the need to find savings, crystalised by news this morning that government borrowing overshot initial forecasts by £7.2 billion in the past six months, her warning was clear: “If we came out of the budget with plans that investors in government bonds and financial markets recognised didn’t add up, we will see what happened to Liz Truss and Kwasi Kwarteng happen again.”

While this government will continue to draw attention to the Conservatives and their legacy - while doing their best to grow national and regional economies - todays Brexit reference has confirmed some pundits’ theory: that Labour is pivoting its approach to Brexit truth telling, teasing their electoral strategy of taking the fight to the heart of the Reform Party. 

Starmer and Reeves are likely to argue that Brexit – and ultimately Nigel Farage – are to blame for the downgrade in productivity forecast and the shrinking of the economy by £120bn, which is making it necessary for the Chancellor to raise taxes.