WHEN: Today, Friday, September 27, 2024
WHERE: CNBC’s “Squawk Box”
Following are excerpts from the unofficial transcript of a CNBC exclusive interview with UK Prime Minister Keir Starmer on CNBC’s “Squawk Box” (M-F, 6AM-9AM ET) today, Friday, September 27. Following are links to video on CNBC.com: https://www.cnbc.com/video/2024/09/27/uk-pm-keir-starmer-were-pro-business-just-as-much-as-were-pro-worker.html, https://www.cnbc.com/video/2024/09/27/uk-pm-keir-starmer-prepared-to-do-the-tough-decisions-to-stabilize-the-economy.html and https://www.cnbc.com/video/2024/09/27/uk-pm-keir-starmer-on-2024-u-s-election-we-will-work-with-whoever-the-president-is.html.
All references must be sourced to CNBC.
STARMER ON PRO-BUSINESS AGENDA
KEIR STARMER: The last few years before the change of government was pretty chaotic and unstable. And it felt like the last government lost control of the economy. And that, to my mind, put investors off because I had long discussions with investors before the election saying, look, in the UK, you have got brilliant universities, you have got incredible skills, you have got an incredible environment for investing. Why are you not investing? And they said to me, it’s about stability. It’s about certainty. And that’s why we had a big breakfast this morning with a number of leading businesses here in the U.S. And for me to be able to say, we have turned the page, this is a new chapter, stability is our number one priority was music to their ears. And they started talking about this being a sort of golden opportunity now to invest in the U.K. And that’s what I think we need to turn it into. They were very optimistic, very hopeful. They were keen to hear from us about our priorities. And, so for me to say, for an incoming labor government just three months in, the number one priority is economic growth, wealth creation was something that I think encouraged them. And, of course, Blackstone today have—
ANDREW ROSS SORKIN: Ten billion-dollar deal.
STARMER: Ten billion-dollar investment in the UK in the Northeast. So this is very much a new chapter for investment in the UK.
SORKIN: How much of what you plan to do about a growth economy, how do you balance that against a perception that you are Labor Party and what that means in terms of working with labor?
STARMER: The first thing to say is that you now have, we now have a labor government whose number one priority is wealth creation. Now, that I said that to the business roundtable this morning. It’s counterintuitive. They don’t expect a labor government to say wealth creation is the number one priority. Well, it is. Of course, we want good public services. Of course, we want the NHS, our National Health Service, to work well. But the only way that will happen is if we grow the economy and have wealth creation. So, that is, we’re a Labor Party that is proud to say that we are pro-business just as much as we’re pro-worker.
SORKIN: Let me ask you, though, this issue of the balance between pro-growth—
STARMER: Yes.
SORKIN: And Labor and pro-worker, this is “The Financial Times.” “The Labor was embraced by many businesses in the run-up to the election. They appreciate stability and a growth agenda, but they need to see more commitments to the needs of private enterprise. A coming package on employee rights, which many companies fear will tilt the balance too far towards workers, will be a key test.” What do you think of that?
STARMER: Well, we have been having a discussion, obviously, on the rights that we want put in place for those that work. We have got to get the balance right. We have had a long consultation exercise with business. Most of what we’re proposing are provisions that good businesses are already doing, and I will tell you for why, because good businesses know that, if you want to drive up your productivity, then actually treating your work force with respect, giving them the security that they deserve is important. So we’re introducing this legislation—
SORKIN: Right.
STARMER: One, of course, to make sure people have the respect and protection they need at work, but two actually, as an economic growth agenda. Our productivity will go up as a result of this package. But I have to say that most businesses are very pleased to have a stable government. They’re very pleased when they hear us say we have got a national wealth fund, that we have got an industrial strategy, that we’re really clear about the skills agenda going forward and that we’re going to be inviting and getting more investment to build the economy that we need.
STARMER ON BLACKSTONE DEAL
STARMER: The decision to press go, which has just been taken, is because of the confidence that Blackstone have in this new administration, this new government. So we’re working with them to make sure the environment is right for that investment. It will require us to fast-track what we need to do on planning, on skills, etc. But that’s something that we’re very happy to fast-track because I think, across the board, we need to do that. But it’s a big signal of confidence, if you like, in this new government, a big signal of confidence in the UK as the place to invest.
SORKIN: Right.
STARMER: That was a big investment. It’s also in the Northeast of England, which matters to us, because I want economic drive.
SORKIN: Outside of London.
STARMER: But I want it, I want it across the whole of the United Kingdom. I don’t want to put London and Southeast down. London is an incredibly—
SORKIN: Right.
STARMER: Is a powerhouse for our economy, and I don’t want to do anything that takes away from that. But I want to see the growth elsewhere in the country.
SORKIN: If there were three big industries that you would want to attract to the UK, they would be what?
STARMER: Well, renewables, I think, is hugely important. They are—
SORKIN: And they’re going to play a role in the data center as well.
STARMER: They’re going to play a role. Data and AI—
SORKIN: Right.
STARMER: In its own right and underpinning, and then other sectors. You know, life sciences, for example, is something we’re very strong in. I don’t want to pick winners, but, certainly, we are going to power through the renewal of energy. We have got huge potential in the UK. We want that investment in there. We want to go at a pace in relation to that. Because that gives us lower energy prices. It gives us security. Gives us next generation of jobs.
STARMER ON WEALTH TAX
STARMER: Tax has to be fair. And, as a broad proposition, those that have got broader shoulders, you know, do understandably and rightly bear a bigger burden of the tax share. But we have got to make sure that we don’t inhibit economic growth in the taxes that we put in place. And so that is important in the balance. And what the businesses and investors here were saying to me this morning is that, is this opportunity obviously, tax is important in relation to that, but they want to see the other issues up alongside it.
SORKIN: Right. And the other issues are the regulatory environment.
STARMER: Yes.
SORKIN: You have an alphabet soup of regulatory agencies. And a lot of people look at that and say it’s just, it’s too much of a burden. Is there something that you’re going to do?
STARMER: Yes. And it’s very important because I have with my discussions with businesses, tell me the inhibitors of investment over and above the instability that we have touched on. And they say to me, planning. It takes too long to build things in the United Kingdom. So we’re reforming the planning rules. We have already started on that. They say that the national grid, the way we move energy around the country, is too slow. So we’re going to fix that. But they also say in relation to regulation that there’s too much inconsistency. There’s too many agencies that are regulating. And they’re not aligned. And we will get to grips with that.
SORKIN: This is from Oxford Economics. They say that almost two-thirds of wealthy investors said they plan to leave the UK within two years or shortly if the Labor government moves ahead with plans to get rid of the non-domiciled tax concessions. Sixty-seven percent said they would not have emigrated to Britain in the first place if this were to take place. How should you, we think about that?
STARMER: Well, we quite often read these stories, and then you dig under them and they’re not quite as alarming as they first seem. We will get the balance right. But we are going to change the rules on non-doms because we have to make sure that we have got the tax yield available to take the steps that we need in relation to our public services. So, we will take these steps. We will take them in a calculated, careful, balanced way. But I think some of these stories, there are always alarmist stories about what people will do.
SORKIN: Right.
STARMER: Sometimes, a pinch of salt helps when looking at those stories.
STARMER ON WINTER FUEL
STARMER: We inherited an economy which was badly damaged in the UK because of the chopping and changing and the bad decisions of the last government. We then audited the books when we came in and found that 22 billion pounds was unaccounted for in year. And, therefore, we took the decision to address that this year, not to ignore it, not to walk past it, but to address it. But the purpose in addressing it is to stabilize the economy. And so everything that we are doing—
SORKIN: Right.
STARMER: When I say wealth creation, economic growth is our number one priority, that means every decision is taken against that yardstick. Does it help economic growth? My strong view is that economic stability is the foundation for economic growth. And, therefore, we will stabilize the economy. That means tough decisions. Nobody wants to deal, no one wants to change the winter fuel allowance for pensioners.
SORKIN: Right.
STARMER: But, by doing that, we stabilize the economy. For pensioners, it means that we can commit to what we call the triple lock, which means that they get more money year on year. But I think, for investors, to the point of your question, what they can see is a government that is prepared to do the tough decisions to stabilize the economy.
STARMER ON GEOPOLITICS
STARMER: Look, I support Israel’s right to self-defense. What happened on the 7th of October was the most appalling terrorist attack, the worst loss of life since the Holocaust. And that went very deep and we have been very clear in our support of Israel’s right to self-defense within international law. Our domestic legislation is very clear about the conditions in which we can allow arms licenses to go ahead. We reviewed that and came to a clear decision. Having got a decision that they ought to be suspended, I wasn’t then going to put it on one side. I was going to implement it. So I think it is perfectly possible, perfectly reasonable and right to say we support Israel’s right to self-defense, but, as we would with any country in the world, within the context of international law.
SORKIN: Well, within the context of international law, do you then say that the US is breaking international law by continuing to provide arms to Israel?
STARMER: No, no, no, no, no. We talked to our US colleagues about this. We talked before about our decision. I was over with President Biden just two weeks ago. But it’s a different regime. It’s a different legal test in the US. So this isn’t comparable. It’s not a criticism. It’s simply we have our own test in the UK. We have applied that test. And the result is, we have suspended a small number of licenses.
STARMER: The US has a slightly different approach. And they have taken a different approach. And—
SORKIN: Do you think that’s the right approach? I mean, it’s not your approach.
STARMER: No, no, no, I mean, look, we passed our own legislation. And I think we’re bound to follow our own legislation. But that shouldn’t be taken as, nor is it a criticism of the US. We work very closely with the US. We’re very close allies, in a special relationship for a very long time politically. But, at the moment—
STARMER: As we have got this volatility in the Middle East and in Ukraine—
SORKIN: Ukraine.
STARMER: Then the way in which we’re working together with the US, I think, is as close as it’s ever been. And that’s why I had an extended session with President Biden just a couple of weeks ago in Washington to talk through these difficult issues and to test our approaches with each other.
SORKIN: As it relates to Ukraine, Zelenskyy is asking the US for more arms, as you know—
STARMER: Yes.
SORKIN: Do you think the US should be giving them? And do you think they should have given them already?
STARMER: Well, look, I’m not going to comment on what the US should or shouldn’t be doing. They have been a key ally, key supporter of Ukraine. The NATO summit here that was hosted in the US was a very powerful statement of NATO allies in support of Ukraine. President Zelenskyy was happy with the outcome. Of course, we listen very carefully to any request for further capability from the Ukrainians. We discuss that with our allies, as you would expect because we have to be clear that Russian aggression cannot succeed. And that is why the resolve is there to support Ukraine for as long as is necessary. And we always listen to what they say about additional capability.
STARMER ON US PRESIDENTIAL ELECTION
STARMER: It’s for the American people to decide who they want as their president. We, the UK, will, of course, work with whoever the president is. We have got a special relationship politically with which sits above the particular office in either country. But it’s for the American people to decide who they want as president. We will work with whoever is the president.
SORKIN: Let me ask you this though. The mayor of London, who you know very well, said: “What I’d say in a respectful way to Americans is” – and this is about our elections – “is, I don’t think you realize that the rest of the world is watching because we have got skin in the game. What happens in America is the metronome that sets the beat of what happens across the globe. It sets the beat for how other politicians behave in election, in an election campaign.” What do you think of that?
STARMER: Well, look, the mayor of London is entitled to his views. He’s a colleague, friend of mine. I have known him better part of 25 years. But I’m the prime minister of the United Kingdom. I understand the special relationship. And it is for the American people to decide who they want as their president. And we will work with whoever is the president of the US.
SORKIN: How do you think the rest of the world perceives this particular election of the US and what’s happening?
STARMER: Oh, with huge interest. It’s undoubtedly a hugely important election, a very close election. I think all of us are watching intensely.
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