Labour issued huge economy warning as Reeves and Starmer’s plan ‘snuffed out’ confidence_l
A looming “painful” budget, suspected tax rises and planned reforms in the job market are damaging optimism in Britain’s financial future, an expert claims.
An expert fears confidence in the British economy is being damaged by Labour (Image: Getty )
Labour’s rumoured onslaught of potential tax rises and job market reform could be torpedoing any “summer confidence” in the UK economy, an expert has warned.
Since coming to power, both Prime Minister Sir Keir Starmer and Chancellor Rachel Reeves have been locked-stepped in their gloomy assessment of Britain’s finances, citing a “£22billion black hole” in the nation’s coffers they claim was left by the Tories.
The PM has warned of a “painful” budget to come in October, with tax rises feared on homes and investments, and the Chancellor has slashed the number of pensions able to receive up to £300 a year in winter fuel payments.
Labour also announced plans to shrink the working week down to just four days with the same wages paid, subject to agreement between workers and their employers. And the party’s “New Deal for Working People” will rip up anti-strike legislation.
Anna Leach, chief economist at the Institute of Directors (IoD), said worries about job creation and taxes meant any initial confidence in the economy had now been “snuffed out over the summer”.
There are fears Labour’s new raft of measures could damage the economy (Image: Getty )
The IoD’s Economic Confidence Index has plummeted from a three-year high of plus seven after the general election in July to minus 12 in August.
Ms Leach said: “The newsflow in recent weeks on employment rights and autumn tax rises has dented confidence in the environment for business.
“Further clarity on the industrial strategy and the business tax road map, in conjunction with more progress in engaging with business on workers’ rights, would be welcome.”
Commons leader Lucy Powell said on Sunday that Labour had been forced to make “tough choices” on the economy after being left with “a huge legacy of overspend”.
The Chancellor and the PM have so far been matched in their gloomy assessment of the economy (Image: Getty )
However, fears over tax rises will see money “fly from the country”, according to a former president of the Confederation of British Industry.
Cobra beer founder Lord Bilimoria called on the Government to concentrate on growth, calling any rise in capital gains tax “a short-sighted move”.
He told the Daily Mail: “Investors are not going to come here if you keep putting up taxes. It will not bring in more money; in fact, money will fly from this country.”
His comments were echoed by lastminute.com co-founder Brent Hoberman, who told the newspaper it “does not make sense to scare off business investment”.
