The weekend’s papers groaned under the weight of business leaders’ concerns and complaints about the Labour’s government’s recent Budget and wider policy agenda.
“They don’t understand business” ran an FT article, drawing on a host of quotes from alarmed chief executives.
“Honeymoon’s over for business chiefs…” was the warning in a similar Sunday Times article.
We take no pleasure in saying “we told you so.”
At the end of August this newspaper rang the alarm bells about Labour’s gloomy mood music, fully two months before their debut Budget, and the most recent GDP figures confirmed our warning that businesses would hold off on investment and hiring decisions in anticipation of a punishing Budget.
In the end, the policies announced by Rachel Reeves in her inaugural fiscal statement went far beyond what had been feared. The £25bn raid on employers’ national insurance was wholly unexpected and caught entire sectors off guard.
Again, we were loud and clear about our own concerns o regarding the consequences of the government’s approach, and since then bosses in hospitality and retail – sectors with high numbers of employees – have been vociferous in their criticism as they digested the sheer scale of the additional costs being imposed upon them.
The changes have been dubbed “unsustainable…regressive…too much to bear…” – with firms warning of “inevitable” and “drastic” job losses. And that’s just the hospitality sector; retail leaders have apparently been working on their own group letter to the Chancellor, with reports emerging this weekend that government advisors have been urging bosses not to put their name to it. It is, in short, a mess.
And yet, it must been acknowledged that away from tax hikes and the burden of new employment regulation, the government is attempting to lay the groundwork for longer-term growth generation when it comes to financial services, infrastructure and pensions.
This approach, set out in the Chancellor’s Mansion House speech last week, has won some support but few can ignore the irony of a Labour government seemingly preferring the endorsement of high finance to the support of businesses that employ hundreds of thousands of people across the country.
It needn’t have been one or the other. Labour’s assault on huge parts of the private sector is a choice, and the consequences of this decision are coming down the tracks, fast.