Reeves must unlock the magic of AI if he is to achieve his growth goals, says ALEX BRUMMER

Here’s an idea for Keir Starmer and Rachel Reeves if they want to have any realistic chance of achieving their growth mission.

In the much-maligned October 30 budget, among the remnants of business stimulus, amid the torrent of £40bn in tax rises, was a commitment to make permanent the Conservative policy of “full spending” for businesses who invest in new plants and equipment.

This is all fine and dandy, but it shows a 20th century rather than 21st century Treasury mentality.

Reeves must now acknowledge, given surveys by the CBI, the Institute of Directors and S&P purchasing managers, that rather than boosting confidence, his budget has had a disastrous effect on investment and new orders.

This is despite the UK being an island of political stability compared to continental rivals Germany and France.

If Britain is to have any chance of overtaking or keeping up with the best in the G7, it needs to more strongly embrace what the country does well and the technologies that will activate the drivers.

That means expanding full funding to innovations that will speed up manufacturing processes, advertising and all kinds of professional services.

The UK is a pioneer in artificial intelligence (AI). In fact, Reeves is known to refer to DeepMind, now part of Google parent Alphabet, as a British success story.

So the way to increase productivity would be to include investment in AI, software, cybersecurity, connectivity and design costs (yes, even the new pink Jaguar) under the full spending umbrella.

It is no coincidence that two of the most admired companies in the FTSE 100 are Relx and software group Sage, both pioneers of AI in the UK.

One of the reasons the Elizabeth Line provides a tangible boost to production is that it is completely wired.

Boosting production through construction and housing construction is a slow process, while technology, as demonstrated by the United States and Israel, produces much faster returns. Britain’s second-class broadband, despite Openreach’s efforts, is not good enough.

The sooner Reeves and other members of a failed government recognize this, the more able Britain will be to escape Labour’s doldrums.

NatWest Redux

As a shareholder in NatWest before the financial crisis, which foolishly bought disgraced banker Fred Goodwin’s latest fundraiser in 2008, one can only breathe a sigh of relief that the extraordinarily long period of partial government ownership is ending.

Speaking at the Financial Times banking conference, current CEO Paul Thwaite (they don’t tend to last long) predicted that, barring an economic crisis, it will be back in private hands by 2025.

It has been a long road and one cannot help but think that if successive governments had not been afraid of taking losses, NatWest would have been on the road to recovery much sooner.

He would not have suffered the attacks and arrows that have stopped him on a series of issues.

It has been sad to see promising companies like fintech champion Worldpay abandoned, at a low valuation, when it could have been a profit center for the bank.

NatWest has a deep reach into British small and medium-sized businesses and farms, but has long looked like a bank looking for a role.

Services such as stock brokerage and document maintenance have been cut, along with a vast branch network that could have been a great asset in its attempt to develop wealth management.

Some comfort can be taken from a recovery in the below-octane share price, which is up 88 percent this year. Along the way, NatWest has weathered the storm over Nigel Farage’s unbanking of Coutts.

The obsession with doing good remains rampant. Every time customers log into online banking, they are greeted with an advertisement for DEC’s humanitarian appeal in the Middle East. This puts off many customers and needs to be rethought.

From bottom to top

Is the hospitality sector in danger of crying wolf?

After the Budget, it seemed like every pub in the country was headed for the slaughterhouse.

If that is the case, Marston’s, which operates 1,339 stores, against all odds managed to record a 64.5 percent increase in its annual profits. He also revealed that the National Insurance increase was “manageable”.

How curious.