A “black hole” has mysteriously appeared in government finances, despite pre-election assurances from Labour that they had “seen the books”. They are laying the groundwork for tax rises in the autumn, many of which will fall on businesses.
Windfall taxes are imposed with gleeful enthusiasm on any company that miraculously manages to make a profit that some minister deems “excessive”.
Pension funds will be told to invest in government-approved infrastructure, though asset managers ought to put their client’s money in stocks they think will deliver the best returns.
On top of that, there is surely now a risk the Government begins expropriating assets. Look at how it has taken the railways back into public ownership, the likely nationalisation of Thames Water, the war on landlords.
Consider the planning reforms pushed by Deputy Prime Minister Angela Rayner, with her determination to reduce the compensation paid to landowners, as well as dismissing their rights as irrelevant.
Nothing matters more to investors than the primacy of property rights. If you don’t own the asset you are building, and if you can’t earn the income that it will hopefully generate, then there is no point in putting your money in.
We may already be starting to see the impact of these measures. Sterling was the worst performing G10 currency over the last month according to Bloomberg, bringing its recovery in the run up to the election to a juddering halt. That is hardly a sign of a country the global money markets want to back.
The new Government needs to get a grip, and fast, and make sure the streets are secure from thugs and troublemakers. It needs to put an end to the epidemic of theft. And perhaps most of all it needs to make sure that investors are left to make their own decisions and earn a fair return on their money.
If that doesn’t happen, the ritzy summits and droning speeches about “stability” won’t make any difference. It can give up on foreign investment – and it can give up on growth as well.
