Rachel Reeves slammed for ‘shattering’ business confidence as UK slumps to low | Politics | News
Labor has been accused of creating a “hostile environment” for investors; Latest figures show the UK has the worst investment levels in the G7 group of leading economies. Chancellor Rachel Reeves has been accused of “shattering” business confidence by hitting companies with tax rises.
Public and private sector investments were only at 18.6% in the three months until September. This leaves the UK well behind Japan, where investment accounts for 27.4% of GDP, and Canada (22.8%), Italy (22.5%) and France (21.8%). The figures have raised concerns among Labor ranks about the Government’s management of the economy.
The findings come as six in 10 Britons expect the country to fall into recession by 2026, according to a More in Common poll.
An anonymous Labor MP warned that the Government was ignoring the needs of small and medium-sized businesses “which keep the country going”, adding that increases to employers’ National Insurance and the National Living Wage would make it more difficult for companies to recruit and pay staff and invest in machinery.
Warning about the consequences for the country, the Labor MP said: “We’re at a level where we can’t tax anyone anymore, but we can’t borrow anymore, so we’re really at the mercy of the people we borrow from, so if they lose their trust in us we’ve got serious problems.”
Federation of Small Businesses warned this feeling is “closer to terror than to confidence”.
Changes to energy fixed charges and increases in dividend taxes are also expected to hit businesses hard.
Shadow Secretary of State for Trade and Trade Andrew Griffith said: “Rachel Reeves has eroded business and consumer confidence with her tax hikes and economic incompetence. It is hardly surprising that investment in Britain is stagnant.
“Tax rises increase costs for businesses and make Britain less competitive, meaning lower growth and higher unemployment.”
He promised that the Conservative government would “give businesses the environment to grow” by “scrapping business rates for thousands of high street firms”.
Reform UK deputy leader Richard Tice warned: “With punitive tax increases and stifling bureaucracy, this Labor Government has presided over a hostile environment for investors.
“Faced with increasing uncertainty and an administration that is ideologically opposed to any attempt to create wealth, investors naturally choose to take their money elsewhere. It is no surprise that business confidence has fallen to record lows.”
The reform promised that the UK government would provide “bold incentives for wealth creators” and remove “burdensome regulations” while “encouraging more people to work”.
A Government spokesman said: “Unlike previous Governments, we are investing in our economic future, with capital investment of more than £120bn compared to previous plans and the highest level of public investment in 40 years. “We have also changed fiscal rules to prioritize investment alongside the private sector.
“As a result, the Sovereign Wealth Fund has invested almost £4bn, benefited from more than £5bn of private investment and created nearly 12,000 new jobs, helping to raise living standards in every part of the country.”
