Andy Haldane: Reeves ‘not even close’ on growth after ‘rookie errors’
The Bank of England’s former Chief Economist has slammed Rachel Reeves’ first near-full year as Chancellor as “disappointing”, with the government “not even close to doing enough” on growth.
Less than two weeks out from the 11 June spending review, Andy Haldane told LBC’s Nick Ferrari that there have been “mistakes, rookie errors” that have undermined the government’s economic credibility.
On Reeves’ performance as Chancellor since Labour was swept to power at the General Election in July, Hadlane said: “Well let’s be clear. I mean, it’s been a disappointing almost 12 months. I think everyone would say that.
“Business would plainly say that. The City would say that. Citizens would say that. I think back benchers would say that. It’s not…gone to plan.”
Haldane added, however, that “this year started a little bit perkier than many people expected” and “fingers crossed that might continue”.
While Sir Keir Starmer’s government has stressed a difficult economic inheritance and heavily criticised the previous Conservative administration, Haldane said that “to some significant degree” Reeves herself has been the author of her own misfortune.
“There’s been mistakes, rookie errors, actually… Well, I mean that the black hole announcement sucked the confidence from business and consumers,” he said.
“The budget compounded that felony and how it was certainly described. On too many measures…it’s felt like the fiscal cart has been put in front of the growth horse, to be honest.
“It’s felt penny pinching. It’s felt small. It’s not been the sort of thing we need to get the animal spirits in the country going, and therefore the country growing. And that’s been errors.”
Mistakes should have been corrected
Haldane argued that there is still time to turn the situation around, saying: “They are redeemable. You know, there’s still time, but not that much time, because unless you plant the policy seeds now, they will not germinate and grow by the time of the next election.”
“The criticism has been pretty brutal and in some cases, pretty personal. I’ve got no time for the personal criticism, but I think the policy mistakes should have been fessed up to and should have been corrected.
“Some of them probably are now being corrected, but let’s take winter fuel. It should not have taken nine months to course correct on that, and that, in some ways, makes a, you know, a bad situation somewhat worse.”
On Labour’s central ‘mission’ to drive growth in the UK economy, the former chief economist dismissed the government’s efforts as “Not even close”.
“To be clear, by growth I don’t mean something as arid as GDP. I mean people’s living standards, people’s sense of things getting better in their community.
“Let’s take defence today… You know, it is directionally good that we are spending more on defence, but look, the absolute bare minimum was done to get Keir Starmer through a meeting with Donald Trump, right?
“We now look like a laggard on defence spend relative to much of the rest of the world. Yes, that will generate a few more jobs outside of the southeast, but nothing like on the scale we need to get growth going.”