Growth Without Delivery. Does The UK Face a Confidence Gap?
The UK Chancellor of the Exchequer, Rachel Reeves, delivered her 2025 Mansion House speech with great fanfare this week, promising a sweeping reduction in financial services regulation intended to “unleash growth” and “make the UK economy stronger and more secure.” The move is being framed as a purge of red tape, with an ambition to let the City of London be the engine of economic renewal across the country. But the early signs suggest this may be more of a press release than a policy revolution.
As the Financial Times reported, City leaders were notably underwhelmed. Many interpreted the speech as an example of old wine in new bottles: vague talk of regulatory streamlining, a nod to economic patriotism, but little of the substance or urgency needed to stimulate real investment or innovation. On Bluesky, FT journalist Chris Giles put it more bluntly, noting the repetitive nature of City reform pledges over the past two decades. This reaction matters. When the City shrugs, international markets and investors take note.
A Reputation at Risk
The tepid reception from financial leaders exposes a deeper issue: the UK government is struggling with a credibility problem. It’s not just about what’s said, it’s about what’s delivered. For all the talk of unlocking capital and promoting growth, there remains a glaring absence of detailed, costed, and incentivised plans that inspire confidence.
Sadly, this is not a new problem, but it’s becoming more acute. Since the UK voted to leave the EU in 2016, successive governments have promised a “new economic chapter” built on innovation, trade, and financial liberalisation. Yet time and again, plans have been hampered by poor planning and implementation, a cautious civil service culture, and a political class that often lacks the tools or appetite to deliver entrepreneurial policy at scale. It’s all about the headlines, the optics of the short term reaction.
Is the Problem Political or Structural?
While ministers bear ultimate responsibility for policy, it would be unfair, and strategically unwise, to blame the government alone. Much of the paralysis lies within the culture and machinery of government itself.
The UK civil service has many strengths, including legal rigour, policy discipline, and institutional memory. But these very strengths can, paradoxically, become weaknesses. Risk aversion, limited commercial experience, and a preference for consultation and yet another ‘taskforce’ over execution have created a culture in which delivery, teh most vital component, is seen as someone else’s problem.
I’ve worked within the UK Civil Service as a specialist for eight years, and had the pleasure of engaging and supporting some great civil servants who who had strategic vision and a desire to change and unlock growth, but who were equally frustrated by the culture that existed, which was risk averse, not entrepreneurial, had a lack of understanding of modelling based on strategic interests and business outcomes. A culture that was quietly enforced from the top.
This dynamic was on full display in Reeves’ Mansion House speech. Despite the promise to make Britain “the best place to invest,” few new mechanisms were offered to turn sentiment into capital deployment. There were no clear incentives for pension funds, corporates, or institutional investors to back UK innovation. There was no action plan to transform productivity or close the UK’s deepening investment gap.
Policy for Headlines, Not for Growth
One of the most telling aspects of the current economic discourse is the disconnect between rhetoric and outcomes. The Mansion House address came just weeks after the new government launched its Industrial Strategy, a document that outlined broad ambitions but lacked a clear delivery architecture.
Without mechanisms that drive capital into innovation, infrastructure, skills and R&D, these announcements risk being seen as political theatre. The UK’s global competitiveness is on the line. Investors, UK and international, and foreign governments don’t just look at speeches, they study balance sheets, tax frameworks, regulatory consistency, and market behaviour. If the UK wants to unlock and attract long-term capital, it must move beyond headline economics and policy making.
A Missed Opportunity: Mobilising Domestic Capital
What’s striking is how little attention is paid to mobilising UK-based business investment. One area that remains underused is corporate venture capital (CVC).
Encouraging British businesses to create CVCs, dedicated units that invest in start-ups and emerging technologies, could help channel private sector capital into innovation while reducing reliance on state funding.
Globally, CVC investment has soared, with markets like the US, Japan, South Korea, China and Brazil having mature markets. Even the European Union is looking at updating policy in order to support European businesses to invest in innovation that can deliver improved productivity, growth and job creation.
According to Global Corporate Venturing, CVC-backed deals globally has continued to see an increase. Through their corporate venturing arms, corporates are investing at many different stages and are supporting not just with capital, but also with knowledge transfer, increasing the chances of success for many who receive investment.
If the government were serious about growth, it could introduce tax incentives, matched-funding programmes, or regulatory reliefs for businesses that launch CVC arms focused on strategic sectors like AI, clean tech, or advanced manufacturing. Doing so would encourage business-led innovation and open new routes to scale for UK start-ups.
Without a doubt, perception matters when creating policy, but the Daily Mail test should not be a key metrics for what cannot be done.
From Strategy to Execution
So, how can the UK and the Labour Party turn its policy ambitions into tangible economic growth tha tdelivers an increased in productivity and jobs? Here are five recommendations:
Establish a Comprehensive UK Innovation Investment Framework: Implement a "UK Innovation Investment Incentive" offering matched funding or EIS/SEIS-like tax reliefs for companies (including larger firms and CVC funds) investing in R&D and early-stage businesses. This framework will be complemented by encouraging City institutions to commit a defined percentage of their assets under management to UK-focused innovation via pensions, private equity, or venture debt, and by launching an "Innovation Bond" scheme to mobilize patient capital for a dedicated UK innovation fund.
Enhance Incentives for Employee Ownership and Strategic Reinvestment: Expand tax reliefs for direct employee share schemes (e.g., reduced income tax on purchases, lower CGT on employee-held shares) and establish an "Employee-Owned Business" accreditation. Simultaneously, optimize corporate gains and loss relief by introducing reduced or zero corporate gains tax on profits strategically reinvested into UK R&D or growth activities, and by enhancing loss carry-forward provisions (unlimited with fewer restrictions) and extending carry-back periods.
Streamline and Simplify the Business Tax System: Commit to predictable and stable tax policy with longer-term roadmaps, and significantly reduce the administrative burden of claiming tax reliefs, potentially by consolidating existing innovation incentives into a single, clearer "Innovation Tax Credit."
Form a Dedicated Delivery and Monitoring Taskforce: Stand up a public-private taskforce, reporting directly to the Chancellor, responsible for overseeing the implementation of regulatory changes and investment mobilisations. This taskforce will benchmark and report progress quarterly through a publicly accessible dashboard, including metrics such as capital deployed, productivity growth, number of start-ups funded, and global investor sentiment.
Implement Strategic Communications to Build Confidence: Develop and execute a comprehensive communication strategy around trust, predictability, and investor confidence, both domestically and internationally, to reinforce the narrative power of UK economic policy.
The Cost of Delay
At a time when global capital is increasingly mobile and geopolitical risk is on the rise, the UK cannot afford to simply talk about growth. It must build the frameworks that generate it. The UK is and has always been an entrepreneurial nation. But it needs to relearn to better work collaboratively and the value that can be unlocked by not having Government working in a bubble.
National growth can be delivered by supporting entrepreneurial SMEs, something that the civil service needs to better understand and support, and that the policy is not teh outcome, it’s only the output.
The government’s reputation, both in The City and on the world stage, depends on moving from narrative to numbers.
This moment demands more than tidy speeches. It demands delivery.
