Kemi Badenoch Slams Labour Over ‘Economic Disaster’ Claims as UK Braces for Recession—Who’s Really to Blame? H
EXCLUSIVE: The tory leader has warned that Keir Starmer and Rachel Reeves are making the ‘wrong decisions’ for the British people.
LONDON, ENGLAND – NOVEMBER 25: Kemi Badenoch the Conservative party leader addresses the Annual CBI (Image: Getty Images)
Kemi Badenoch blasted Labour for “crashing the economy” as Britain was put on recession alert.
The Tory leader accused Keir Starmer and Rachel Reeves of “making the wrong choices” after new figures showed the economy shrank for the second consecutive month.
Britain’s GDP fell by 0.1 per cent in October, following an identical slump in September.
The shock data covers the period just before the Chancellor’s tax-hiking bombshell Budget with economists predicting worse to come.
Ms Badenoch said: “The businesses I speak to are afraid for their future. Some have stopped hiring, others are letting people go, some will go bust.
“Labour inherited the fastest growth in the G7, but Keir Starmer and Rachel Reeves have crashed the economy.
“Government is about making choices, and this Labour Government have chosen to hike taxes on business and we will all pay the price.”
Conservative party leader Kemi Badenoch during a visit to label manufacturer Baker Labels in Brentwo (Image: PA)
CAMBRIDGESHIRE, ENGLAND – DECEMBER 12: Prime Minister Keir Starmer speaks to the media a visit to a (Image: Getty Images)
The opposition leader’s stinging remarks on Friday came after she visited small firms in Essex who will be clobbered by Ms Reeve’s national insurance rise.
The Chancellor insists her big spending Budget will help revive the dismal growth results – a flagship Labour pledge.
But businesses have warned her sweeping tax raids – yet to kick in – will force them to make cutbacks on staff and investment.
Ms Reeves said: “We are determined to deliver economic growth as higher growth means increased living standards for everyone, everywhere.
“This is what our Plan for Change is all about.
“While the figures this month are disappointing, we have put in place policies to deliver long term economic growth.”
Hikes to the employer rate of National Insurance were announced at the October 30 Budget and so will not be fully reflected in the latest ONS stats.
Shadow Chancellor Mel Stride blamed the dire economic performance on Ms Reeves’ gloom-mongering about the state of the finances since she took office.
The Tory MP said: “It is no wonder businesses are sounding the alarm. This fall in growth shows the stark impact of the Chancellor’s decisions and continually talking down the economy.
“Labour were left the fastest growing economy in the G7 but because of their decisions growth is now under serious pressure.
“The impact will be felt by families through higher taxes, fewer jobs, higher prices and higher interest rates.”
Reform UK’s Richard Tice said: “These figures are a disaster. Every Labour policy so far has been an attack on working people, small businesses, and a step towards a poorer, weaker country.
“Before the election, Starmer and Reeves pledged the highest economic growth in the G7. Already this pledge has been abandoned. They are making this country poorer and it is only going to get worse under Labour.
“Labour won’t achieve growth, instead they will just continue the Tories legacy of a bloated state, high taxes and managed decline. This country needs major economic reform and Reform UK stands as the only party ready to deliver it.”
In the past three months the economy increased very slightly, thanks to 0.2 per cent growth in August.
Chancellor of the Exchequer Rachel Reeves during a visit to Sunderland City Hall and the Culture Hou (Image: PA)
October saw services flatline at 0 per cent growth, while production output fell 0.6 per cent and construction down 0.4 per cent.
Julian Jessop, Economics Fellow at the Institute of Economic Affairs, said: “The second successive monthly fall in economic activity in October should put the UK firmly on recession watch.
“Indeed, output per head may already be falling for the second quarter in a row.
“The new government’s negative rhetoric over the summer and the anticipation of a tight Budget have damaged sentiment and encouraged many households and business to put spending, hiring and investment on hold.”
Ben Jones from the Confederation of British Industry said: “Following these disappointing figures, businesses will be glad to see the end of 2024. Nevertheless, firms remain hopeful that things will improve in the New Year.
“It may take a few more months for firms to work through the impact of the sharp increase in employment taxes outlined in the Budget and adjust their hiring and investment plans accordingly.”
David Bharier, Head of Research at the British Chambers of Commerce, said: “With growth of just 0.1% in the three months to October and an unexpected fall in the monthly GDP, the UK economy was already fragile ahead of recent policy announcements.
“The full impact of the Budget since then is yet to be seen. However, our research has already shown a spike in anxiety over tax and employment policy.
“Many businesses are telling us that increased costs are likely to have an impact on their investment and recruitment plans. Firms of all shapes and sizes are facing tough decisions in early 2025.”
The doomladen economic data comes as more than 160,000 family businesses have called on the government to consult on its inheritance tax changes.
In an open letter to the Chancellor, led by Family Business UK, the leaders of 32 trade associations have warned that changes to Business Property Relief (BPR) and Agricultural Property Relief (APR) will starve their members and the economy of investment, lead to forced, premature business sales and result in job losses right across the country.
Independent economic modelling commissioned by Family Business UK and conducted by CBI Economics suggests that far from raising revenue, the changes to BPR alone could result in a £1.25 billion loss to the Exchequer, lead to more than 125,000 job losses and reduce economic activity (GVA) by £9.4 billion over the course of the Parliament.
Neil Davy, CEO Family Business UK said: “The changes to Inheritance Tax for family businesses and farms are a hammer blow. In many cases, those inheriting the business will have no alternative but to sell up when the owner dies, rather than continue running the business.
“In these circumstances, there is a real risk that businesses, assets and farms will be sold to foreign-owned competitors or investors who will pay little to no tax in this country.
“Already, family business owners are taking decisions to withhold planned investments and are putting recruitment on hold.
“Those working for family businesses are also extremely concerned, worried about how these changes might impact them.”
Changes to BPR and APR announced in the Budget will mean that business and farm assets worth more than £1million will now be subject to Inheritance Tax at a rate of 20% when the business owner dies.
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