Reeves must unlock the magic of AI if she wants to meet her growth goals, says ALEX BRUMMER

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

In the discredited October 30 Budget, among the bits of encouragement for business, amid the deluge of £40 billion in tax increases, was a commitment to the Tory policy of ‘full spending’ on companies building new factories and equipment make investments permanent.

This is all very well and elegant, but it shows a 20th century rather than a 21st century mentality at the Ministry of Finance.

Reeves must now recognize, given investigations by the CBI, the Institute of Directors and S&P purchasing managers, that her budget, far from boosting confidence, has had a disastrous effect on investment and new orders.

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

If Britain is to have any prospect of outperforming or keeping pace with the best in class in the G7, it must more strongly embrace what the country does well and technologies that will power the drivers.

That means expanding all of our spending to innovations that will speed up production processes, advertising and all kinds of professional services.

Britain is a pioneer in artificial intelligence (AI). Reeves has been known to call DeepMind, now part of Google parent company Alphabet, a British success story.

The way to increase productivity would be to bring AI investment, software, cybersecurity, connectivity and design costs (yes, even the new pink Jaguar) under the entire umbrella.

It’s no coincidence that two of the most admired FTSE 100 companies are Relx and software group Sage, both of which have pioneered AI in Britain.

One of the reasons the Elizabeth Line offers a tangible increase in output is that it is fully wired.

Stimulating production through construction and housing is slow, while technology, as the US and Israel show, delivers a much faster payback period. Britain’s second-rate broadband, despite Openreach’s best efforts, is not good enough.

The sooner Reeves and other members of a failing government recognize this, the better able Britain will be to escape Labour’s despondency.

NatWest redux

As a shareholder of NatWest before the financial crisis, who foolishly bought disgraced banker Fred Goodwin’s last-ditch fundraiser in 2008, one can only breathe a sigh of relief that the extraordinarily long period of part state ownership is coming to an end.

Speaking to the FT’s banking conference, current CEO Paul Thwaite predicted (they don’t usually last that long) that, barring an economic shock, it will be back in private hands by 2025.

It’s been a long time coming, and you can’t help but think that if successive governments hadn’t been afraid of taking a loss, NatWest would have been on the road to recovery much sooner.

It would not have suffered the slings and arrows that have held it back on a range of issues.

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

NatWest has a huge reach across Britain’s smaller and medium-sized businesses and farms, but has long looked like a bank looking for a role.

Services such as securities trading and record keeping have been cut, as has an extensive branch network that could have been a major asset in building on asset management.

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

The obsession with doing the right thing is still widespread. Every time customers log into online banking, they are greeted with the appearance of an advertisement for the DEC Middle East Humanitarian Appeal. This is a turn-off for many customers and should be reconsidered.

Bottom up

Is the catering sector in danger of crying wolf?

After the budget it seemed like every pub in the country was going to the knacker’s bar.

If that is the case, Marston’s, which operates 1,339 outlets, has managed to post a 64.5 percent increase in annual profits against all odds. It also emerged that the increase in National Insurance was ‘manageable’.

How curious.