Dire economy warning as Starmer and Reeves’ plans could damage confidence in Britain
A looming "painful" budget, suspected tax rises and planned reforms in the job market are damaging optimism in Britain's financial future, an expert claims.
Labour's rumoured onslaught of potential tax rises and job market reform could be torpedoing any "summer confidence" in the UK economy, an expert has warned.
Since coming to power, both Prime Minister Sir Keir Starmer and Chancellor Rachel Reeves have been united in their gloomy assessment of Britain's finances, citing a "£22billion black hole" in the nation's coffers - which they claim was left by the Tories.
The PM has warned of a "painful" Budget to come in October, with tax rises feared on homes and investments. The Chancellor has slashed the number of pensioners able to receive up to £300 a year in winter fuel payments.
Labour also announced plans to shrink the working week down to just four days with the same wages paid, subject to agreement between workers and their employers. And the party's "New Deal for Working People" will rip up anti-strike legislation.
Anna Leach, chief economist at the Institute of Directors (IoD), said worries about job creation and taxes meant any initial confidence in the economy had now been "snuffed out over the summer".
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The IoD's Economic Confidence Index has plummeted from a three-year high of plus seven after the General Election in July to -12 in August.
Ms Leach said: "The newsflow in recent weeks on employment rights and autumn tax rises has dented confidence in the environment for business.
"Further clarity on the industrial strategy and the business tax road map, in conjunction with more progress in engaging with business on workers' rights, would be welcome."
House of Commons leader Lucy Powell said on Sunday that Labour had been forced to make "tough choices" on the economy after being left with "a huge legacy of overspend".
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However, fears over tax rises mean money will "fly from the country", according to a former president of the Confederation of British Industry.
Cobra beer founder Lord Bilimoria called on the Government to concentrate on growth, calling any rise in capital gains tax "a short-sighted move".
He told the Daily Mail: "Investors are not going to come here if you keep putting up taxes. It will not bring in more money. In fact, money will fly from this country."
His comments were echoed by lastminute.com co-founder Brent Hoberman, who told the newspaper it "does not make sense to scare off business investment".
