Employers beg Rachel Reeves not to damage economy even more | Politics | News
Business leaders have called on Rachel Reeves not to impose further burdens on employers as new official figures show economic growth is slowing. Growth slowed to just 0.1% in three months in a blow to Ms Reeves ahead of the autumn budget. The Chancellor tried to blame a cyberattack that halted production at carmaker Jaguar Land Rover, but food and drink manufacturers warned of tax increases in last year’s Budget when the Chancellor increased National Insurance contributions for employers, damaging investment and causing high street prices.
The British Chamber of Commerce insisted: “There should be no more taxes on business in the November budget.” Shadow Chancellor Sir Mel Stride said: “The economy has shrunk in the last month under a Prime Minister and Chancellor who are in office but not in power.”
Sir Mel highlighted Prime Minister Sir Keir Starmer’s decision to bring his own economic experts into Number 10 and the open war between Downing Street officials and Cabinet Ministers including Health Secretary Wes Streeting. Sir Mel said: “Months after the Prime Minister stripped the Chancellor of responsibility for the Budget, Keir Starmer has now lost control of his own Downing Street operation – with his team openly at war with the Cabinet.
“If the Prime Minister has no backbone to control his team, he has no hope of cutting spending. Only the Conservatives have a leader with backbone and a plan to save £47bn, allowing us to cut tax and close the deficit.”
Economic growth was half the 0.2% figure predicted for the period between July and September, down from a 0.3% increase between April and June. The disappointing economic data follows figures earlier this week showing UK unemployment had risen to 5%, its highest level in four years.
Ms Reeves blamed a five-week shutdown of Britain’s biggest carmaker, Jaguar Land Rover, after a cyber attack shut down its IT systems.
He said: “As a result, car production fell by almost 30% in September. Jaguar Land Rover is now back up and running, thanks in part to support from the Government to both assist with the cyber attack and support the supply chain, so the business has now started producing cars again.”
Ms Reeves also acknowledged that the UK remains the “fastest growing economy in the G7” so far this year, but that US figures have not yet been published.
He said his budget on November 26 would focus on shortening NHS waiting lists, reducing the cost of living and reducing the national debt.
But the Food and Drink Federation said nine in ten food producers felt “pessimistic” about the Budget, while two-thirds said they had either cut staff or planned to do so thanks to the National Insurance increase introduced last year.
Stuart Morrison, Director of Research at the British Chamber of Commerce, said: “The lack of strong and consistent growth means this month’s Budget is a make-or-break moment for business, which needs to deliver for firms across the UK. Our latest survey of more than 4,600 businesses shows a quarter are scaling back their investment plans and a fifth expect their turnover to deteriorate over the next year.
“That’s why we’re clear in the November Budget that there should be no more taxes on businesses. The Chancellor should also use his announcement to tackle the skills crisis, help firms export and accelerate infrastructure projects.”
“He faces tough choices, but hitting businesses in the pocket again would be the wrong move.”
Unions have also voiced concerns, with Unite general secretary Sharon Graham saying: “The UK economy is on life support. Our growth is low, our unemployment is rising and our cost of living crises are deepening. Workers and communities cannot continue to pay the price.”
