Business secretary dismisses claim ‘shambolic’ pre-budget uncertainty has caused hit to growth – UK politics live | Politics
Joel HillsHe was unimpressed with ITV News’ business and economics editor Peter Kyle’s claim on the Today program that pre-budget uncertainty was not much of a problem for the economy. (See 9:30 a.m.) Hill posted this on social media.
Economy Minister Peter Kyle told Today he had “debunked” the claim that three months of endless leaks, briefings and speculation about which taxes would be increased in the Budget were damaging the economy. Governor of the Bank of England It’s clear he has.
Good morning. The budget is two days away, and while we have a good idea of some of the key measures in it, the real debate about whether they’re wise won’t begin until Wednesday afternoon. But Chancellor Rachel Reeves is facing criticism over her handling of the process ahead of Wednesday, and those comments take on renewed importance this morning as the CBI holds its annual conference.
Frankly, expectation management is widely viewed as a mess. Two decisions in particular backfired. First, at the CBI conference this time last year, Reeves publicly said that the 2025 budget would not include tax increases on the scale of the 2024 budget, but it is now clear that it will. Then, three weeks ago, Reeves gave a speech in Downing Street that very clearly signaled to the markets and his party that he would have to raise income tax in the budget, in breach of the manifesto. (Some of his allies now claim he was merely laying out one option, but his government colleagues didn’t understand or present it that way at the time; he was rolling, not kite-flying.) But then he changed his mind.
Economists say this lack of uncertainty is bad for growth. What’s this Andy HaldaneThe former chief economist of the Bank of England told the BBC yesterday:
We faced speculation for months; basically financial fandango. And this cost the economy dearly. It caused paralysis among businesses and consumers. This is the biggest reason why growth has remained stable in the second half of the year.
In an interview on the Today show this morning, Muhammad El-ErianThe former chief economic adviser at German financial company Allianz said economic data showed Haldane was right. He explained:
There are numerous data points to suggest that prolonged speculation has left growth flat. You see this in the latest retail sales figures, which fell for the first time since May.
You see this in the decline in business confidence and consumer sentiment.
And there is general agreement that the economy is paying the price for a process that has been delayed, rife with speculation and for which the government has sent conflicting signals.
And Rupert SoamesThe CBI chief also made the same argument on Times Radio this morning. Soames, former CEO of Serco (and brother of Tory MP Nicholas Soames), said:
This whole run into the budget has been really difficult and I think in any future budget, lessons will be learned to not get caught up in constant technical pitches – all these different ideas being inflated, then withdrawn and then tried again. It’s really confusing and unnecessary for businesses… Frankly, it’s a pretty complex process [the budget] it was useless.
Peter KyleThe Minister of Commerce is the government spokesperson at the CBI conference. When asked in an interview on the Today programme, about Andy Haldane’s claim that pre-budget uncertainty was the biggest constraint on growth, Kyle denied it. He said:
The biggest challenge to growth in this country is the legacy this government has. The Brexit deal alone took up 4 percent of the entire economy’s GDP. This is a fact. It far outweighs anything that speculation can and does cause.
He also defended public pre-budget briefings, saying he and other ministers wanted to explain the “direction of travel” of budget measures rather than announcing them in advance. He also said some pre-budget speculation in the media “crosses the line into crazy”.
Here is the agenda of the day. For the last few months, Nigel Farage’s press conference has often been on the Monday agenda. However, this morning he remained silent and did not appear before journalists. It’s not hard to guess why.
10am: Trade Minister Peter Kyle speaks at the CBI conference.
11.20: Kemi Badenoch speaks at the CBI conference.
11.30: A lobby briefing is being held in Downing Street.
Afternoon: Keir Starmer visits a school in Cambridgeshire with education secretary Bridget Phillipson.
14:00: More in Commons has published a new survey on public expectations ahead of the budget.
14.30: Housing secretary Steve Reed answers questions in the House of Commons.
15.30: Michael Prescott, the BBC consultant who wrote the memo critical of Trump’s speech editing and other allegations of bias that ultimately led to the director-general’s resignation, is giving evidence to the Commons culture committee. At 4.30pm BBC chief Samir Shah and former Conservative Party doctor Sir Robbie Gibb, who sits on the BBC board and has led initiatives to tackle so-called left-wing bias at the corporation, give their evidence. We will cover the hearing in a separate live blog.
16:00: Zia Yusuf, head of policy at Reform England, attends a Q&A at the CBI conference.
16.40: Reform UK leader Nigel Farage speaks at a rally in Llandudno.
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