Comments from David Sleath add to growing backlash from company chiefs - Eddie Mulholland
Labour’s first Budget was not “consistent” with its stated aim to boost growth, the boss of one of Britain’s biggest property companies has said.
David Sleath, chief executive of FTSE 100 warehouse developer Segro, said the policies announced by Rachel Reeves were unlikely to stimulate the economy.
He told The Telegraph: “The Government was very clear – prior to the election and immediately afterwards – that they were going to be a pro-growth government and support businesses because they recognise the contribution that business can make to help them achieve their objectives, to grow the economy and provide better quality jobs and decarbonisation.
“To pay for these things, you’ve got to generate growth. I don’t think the Budget has been consistent with that growth ambition.”
Mr Sleath, whose company is worth £10bn, said the tax-raising Budget had “not been a great start” for relations between business and Government.
Hospitality and retail chiefs have warned the tax increases announced in the Budget will lead to job losses, higher prices and company failures.
Segro, which traces its roots back to a First World War military repair depot, owns and develops warehouses and industrial estates across Britain and Europe.
However, Mr Sleath said his and other businesses were now rubbing up against barriers to growth in the form of slow grid connections, which means it can take years to connect to the electricity network.
Mr Sleath said: “Unfortunately it is holding back hundreds of millions, and in the case of data centres, billions of pounds worth of investment that we’d be making, let alone the wider industry.”
The Segro chief urged ministers to get a grip on the problem and speed up connections. His company, whose property portfolio includes 35 data centres in the UK, is engaging with the Department for Energy Security and Net Zero on the issue.
Mr Sleath, who also chairs the logistics board at the British Property Federation (BPF), said: “There’s a big cry-out for speedier grid connections and a slicker process for getting these things planned, which, as a country, we’re just not well set up for.
“Our sector needs tons of power, because logistics facilities are increasingly automated, so [operators] need to run their kit. They’re increasingly looking at electric vehicles, so that needs more power, and that’s before we even get into data centres.”
‘High-level policy aspirations’
Data centres were recently classed as critical national infrastructure by Peter Kyle, the Technology Secretary.
However, Mr Sleath said: “The jury’s out in terms of what Labour is going to do to actually bring alive some of these high-level policy aspirations and turn them into things that make a difference.”
He said: “The Government […] has talked about recognising the importance of logistics and industrial, about data centres as being critical national infrastructure, so what we really want is to see them follow that through, and [set out] the things they will do to enable those sectors to grow.
“They’ve been pretty consistent saying they get data centres and why it’s going to be critical for enabling the UK to be a digital powerhouse, but you need to do things as a government to enable that to happen.”
The Chancellor is planning to lower business rates for high street shops while raising them for warehouses and other infrastructure used by online retailers. Ministers have said this will help to “level the playing field”.
However, Mr Sleath cautioned that the Chancellor’s plans for business rates reform could hit “hundreds, if not thousands” of British businesses that “have nothing to do with online retail”.
He gave the example of food processing factories, film studios and manufacturing businesses as examples of operations that rent space from Segro and could be hit. Segro’s property portfolio is worth £17.8bn.
Mr Sleath said: “If the name of the game is to level [the playing field] between traditional high street retailers and online players, that’s a particularly clunky sledgehammer to try and crack that nut.”
A Treasury spokesman said: “By taking difficult decisions we have been able to protect retail, hospitality and leisure businesses on the high street by properly funding the NHS to support a healthy workforce, capping corporate tax and, for the first time, permanently cutting their business rates from 2026.
“To help transition to the new, fairer business rates system next year, we are protecting bills from inflation and extending 40pc relief for 250,000 properties, totalling £1.6bn in relief.”
