Urgent action is demanded to rescue growth in the UK as the economy shrinks
Rachel Reeves is under fire for hiking up the tax burden (Image: SmartFrame/Zuma Press)
Labour has given up on its “growth mission” and it falls to Britain’s private sector to rescue the country from recession, it was claimed amid alarm at the UK’s shrinking economy. Britain’s economy contracted by 0.1% in October when growth had been expected. This has fuelled expectations the Bank of England will cut interest rates on Thursday – but also intensified calls for a change in direction from the Government.
Callum Price of the Institute of Economic Affairs said: “The Government has entirely given up on its growth mission, but it shouldn’t have.”
He urged the Government to “double down” on planing reform and not to press ahead with the turbo-charging of workers’ rights spearheaded by Angela Rayner before she was forced to resign.
He said: “We need the private sector to save us from recession”
Daniel Herring of the Centre for Policy Studies also called on the Government not to hit businesses with more red tape, saying: “When they came to power, Labour promised businesses certainty, predictability and sympathy. Instead they’ve had tax rises, instability and months of damaging Budget speculation.
“The most obvious way to help business right now would be to abandon the damaging Employment Rights Bill and send a clear signal that any future Budgets will curb spending – and in particular the swollen welfare bill – rather than putting more burdens on the private sector.”
And economist Ewen Stewart, a member of the Growth Commission, said: “This Government is the author of its own and our misery. This week’s GDP growth numbers revealing that the economy contracted over the previous three months were predictably awful.
“Worse, manufacturing, services and construction all posted marked declines. Yet these lamentable numbers were from before the Budget which again taxed and regulated those who work to give to the increasingly failing public sector.
“It does not take a genius to work out that these measures will make matters worse going forward.”
John Longworth, chairman of the Independent Business Network, warned: “Given that the economy, far from growing as promised by the Government, is in fact shrinking we now face the prospect of a possible recession.”He pressed for the Government to abandon “net zero madness”, adding: “A focus on the opportunities of Brexit and our superior trade deals would help – only possible if we stay away from a customs union.”
Sir Mel Stride fears there will be another tax-raising Budget next year (Image: Jonathan Buckmaster)
A Treasury spokesperson defended the Government’s record, saying: “We defied the forecasts this year with the OBR, Bank of England, IMF, OECD, and now the BCC and CBI, all upgrading their growth forecasts. The Chancellor’s Budget will drive economic growth through billions of pounds protected for new investment, better conditions for start-ups to scale and grow, and lower inflation to support the Bank of England to cut interest rates further and spur business confidence.”
But Shadow Chancellor Sir Mel Stride said: “Just as night follows day, Labour will raise your taxes… A responsible Chancellor would get a grip on spending – including the welfare bill – instead of reaching for another tax raid on working people.
“And despite all this, she refuses to rule out coming back for more next year.”
