A major new factory from one of the American tech giants perhaps? Or a new lab from one of the pharmaceutical giants? Or, best of all, a huge new green energy fund. The newly appointed Chancellor Rachel Reeves was probably hoping for some positive investment news for her first week in office, especially as she has decided, in an unprecedented move, to make ‘growth’ a ‘national mission’. Instead, one of the UK’s best businesses has cut almost a third of its UK workforce – and that will just be the start of the corporate exodus from Labour’s Britain.
Dyson will argue that its decision to axe 1,000 jobs in the UK, announced today had nothing to do with the election of a new government. It had been planned for months. Well, perhaps. In fact this is a company that racked up record revenues of more than £7 billion last year, up 9 per cent year-on-year. It is hardly in trouble. It would have known Labour was about to take power and planned accordingly. The timing, to put it politely, seems designed to make a point.
In reality, it seems unlikely that Sir James Dyson, a man who has built up a company worth many billions, can be bothered with a ‘partnership’ with Rachel Reeves. Even though she claims her few years as a junior economist at the Bank of England means she ‘knows how to run the economy’, it is perfectly reasonable for Sir James to decline her advice. Likewise, the new business secretary Jonathan Reynolds, despite his experience as a ‘political assistant’ to Labour MPs, probably doesn’t know much about running a research and design intensive manufacturing company either. On top of all that, Sir James won’t want all the extra taxes, the social obligations, or the employment rights, Labour is about to legislate for either. Given that Dyson is a global company, it makes sense to focus elsewhere.
Everyone can agree that the UK needs to improve its growth rate. And yet in preparing for office Reeves and Sir Keir Starmer, the Prime Minister, have been extraordinarily complacent about what it will take to accelerate the economy. Both seem to think businesses want their input. In fact, most would prefer they simply got out of the way. Dyson has clearly decided it is better to expand elsewhere. And, more quietly perhaps, many other major companies will make the same decision over the next few months.