Tony Blair’s team delivers stern economy warning to Rachel Reeves | Politics | News
Rachel Reeves expected to leave her red box behind for Spring Communiqué (Image: Getty Images)
Sir Tony Blair’s think tank has called on Rachel Reeves to take radical action to save growth and “reset” the economy, just days before she delivers her Spring Statement. He warns that if growth is not restored the Government “will be forced to resort to costly tax rises or spending cuts towards the end of this parliament”.
The Tony Blair Institute for Global Change is calling on the Labor Government to “lift the brakes” on the economy. He warns about the impact of Labour’s high taxes on employment and “an energy strategy that prioritizes the speed of reaching net zero over affordability”.
Such policies have been accused of adding “friction to the UK economy just at a time when it needs to be more agile”.
The three-time former Prime Minister’s intervention comes after Labor was reeling from by-election losses to the Greens in Gorton and Denton and the Bank of England cut its growth forecast for this year from a weak 1.2% to just 0.9%.
The TBI argues that the UK suffers not just from “weak productivity” but also from “reduced capacity to adjust” and claims that the country “is at risk of falling further behind in the next phase of global competition”. He calls for “a reset to rekindle growth and dynamism” and says it “should serve as the government’s north star.”
Tom Smith, TBI’s director of economic policy, said: “Restarting growth is the defining challenge facing the UK. Too often, growth is treated as one goal among many, rather than the engine of rising living standards and national renewal. A reset in favor of dynamism is needed.”
Pressing for a raft of reforms to make it easier for businesses to “hire, invest and grow”, he said the restoration of dynamism is “the difference between an economy fit only for the past, and one that can thrive in tomorrow’s world”.
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Fred de Fossard, director of strategy at the Wellbeing Institute, called for a repeal of the overload on workers’ rights pioneered by former deputy prime minister Angela Rayner, warning that “low-paid jobs” in the hospitality sector were being “destroyed by new regulations”.
He said: “The labor market has ground to a halt and construction has been stifled by a failed planning system and high energy costs.”
Shadow Chancellor Sir Mel Stride said: “With even Tony Blair’s Institute warning that Britain is losing its economic dynamism, it is clear that the Chancellor is running out of steam. Labor continues to talk about green shoots, but people can feel the truth in their pockets.”
The Federation of Small Businesses has warned that companies face “unique cost pressures, including business rates bills, energy fixed charges and employment costs”. It claims that more than a third (35%) of small firms “plan to close or contract within the next year.”
A Government spokesman said: “We are delivering a stronger, safer economy: easing the cost of living, reducing the national debt and unlocking growth and investment across the country. We will continue to ensure the UK is a leader in the industries of the future by supporting AI, accelerating planning decisions, investing in innovation and skills and attracting the best global talent.”
Sir Tony Blair remains an active force in UK and international politics (Image: AFP via Getty Images)
Callum Price of the Institute of Economic Affairs said: “TBI is right; the economy will not grow with the handbrake on.” He called on Labor to “cut the damage they’re doing” and “repeal the Employment Rights Act, pause minimum wage increases and double down on planning reforms to get Britain growing again.”
