Investor hits out at Peter Kyle for ‘picking winners’
Business secretary Peter Kyle has come under fire over his admission the government would be “picking winners” across the UK economy.
The former Gail’s and Pizza Express investor Luke Johnson hit out at Kyle’s “arrogance and equal measure” for comments on the Labour government’s approach to investment.
On Friday, Kyle spoke out about the government’s hopes of “betting big” through the British Business Bank (BBB) and other state-backed investments to support UK firms.
He wrote in a post on X: “I am betting big. And I am picking winners. It’s more activist.
“And there will be things that don’t work out, sure. But to have a healthy economy, failure leads to success.”
Kyle has since faced intense criticism over his comments.
In response, Johnson accused Kyle of representing a “socialist government playing at venture capital”, adding that it would “end badly” for taxpayers.
Shadow business secretary Andrew Griffith suggested Kyle had “too many Jägermeisters in Davos”.
Kyle’s comment came as the BBB announced a £25m investment in the Octopus software spin-off Kraken, plus £50m into the deep tech funds Epidarex Capital and IQ Capital.
Kyle’s funds face scrutiny
The British Business Bank and the National Wealth Fund have faced greater scrutiny since the last General Election after Chancellor Rachel Reeves provided the two bodies with greater funds for backing UK companies.
CityAM revealed last year an audit of the National Wealth Fund (NWF), backed by taxpayers, pointed to potential failures in the effectiveness of risk, management, governance and internal controls.
“Weaknesses existed, in particular reflecting the delay in moving to a longer-term investment management system and to the increased demands of a growing organisation and transition to the National Wealth Fund,” NWF audit and risk committee chair, Bridget Rosewell, said.
Labour is not the only party that has spoken about its intentions to take a more activist approach in private sector firms.
It was also revealed last year that a Reform UK government would look to buy a stake in Rolls-Royce to help it ramp up its small modular reactor (SMR) programme.
“What we would do, is say, ‘Rolls-Royce, we’re going to give you a huge contract for this British stuff [SMR tenders in the UK] and we will front-load you capital so that you have certainty that it’s going to happen,’” Reform’s policy chief Zia Yusuf said.
“Iif we were to give them priority access to the British market with a massive contract, maybe the British taxpayer should be given a stake in the company.”