Reeves’s actions would suggest she’s trying to slow economy down, says former NatWest chief
The former chief executive of NatWest Bank has launched an attack against Rachel Reeves, claiming she appeared to be doing all she could to thwart economic growth.
Economist Sir Howard Davies’ criticism of the chancellor comes less than two weeks before a crucial budget that many believe could either strengthen or collapse the government.
While Keir Starmer and Ms Reeves came into office claiming economic growth was their number one mission, the economy has stagnated and new figures published on Thursday show Britain’s economic growth has slowed to 0.1 per cent in the last three months.
Sir Howard blamed the poor state of the British economy on his policies, including increased national insurance contributions for employers and new employment rights.
He said: “I can say that the government has behaved in such a way in recent months that if they tried to slow down the economy, I cannot think of anything else I could do.
“Because first of all you show that you have trouble at the top of government, then you make a series of remarkable leaks that suggest you’re going to tax property, you’re going to tax wealth, you’re going to tax gambling, you’re going to tax banks. Now you’re even going to tax bicycles for God’s sake!”
“All of this creates a kind of cumulative weight and uncertainty.”
He added: “You’ve also got legislation that makes it more expensive to employ people, and you’re running a public spending policy where public sector wages are rising by 6.6 per cent a year and private sector wages by 4.2 per cent, and that prevents the Bank of England from cutting interest rates, which would do the trick. So there’s a whole range of things that are inappropriate.”
Shadow chancellor Mel Stride said briefings for health secretary Wes Streeting were “already having an impact on the market” amid fears over the Prime Minister’s position.
“It takes a certain level of incompetence to be a prime minister who is now afraid of his own position,” he told Times Radio.
He accused Sir Keir of engineering “chaos” at a time when economic stability was needed, adding: “I think what is happening is already having an impact on the market.”
“You really can’t predict chaos and expect to have a positive, solid and stable economic future for our country,” he added.
In response to the GDP figures, Ms Reeves said Britain had the fastest-growing economy among the G7 group of developed countries in the first half of the year but “there is still more to do to build an economy that benefits workers”.
