Reeves played fast and loose with business leaders’ trust
Not long ago, Rachel Reeves would have been right at home in a room full of business leaders and employers.
During the election campaign it was comfortable territory for the aspiring Chancellor who reassured the private sector at every turn that Labour would be “the most pro-business government the country has ever seen.”
Now, just a month after delivering her first Budget, Reeves would be forgiven for venturing into the CBI annual conference with some trepidation. The lobby group yesterday slammed the government’s approach to the private sector, warning that the Budget will hit investment, job creation and growth. Their language was admirably frank and echoed a growing chorus of complaints from business leaders in recent weeks.
Reeves appeared in conversation with a CEO who isn’t yet embarrassed to be seen with her, Scottish Power’s Keith Anderson, but journalists attending the conference weren’t going to let her off the hook.
In response to a question about whether she would revisit any of the new costs being imposed on businesses, she said “we’ve made our decisions” and added that, contrary to the view of those who actually employ hundreds of thousands of people across the country, the Budget will in fact prove to be “good for jobs and good for growth.”
More than a few CEOs could be seen to shake their heads at this.
Perhaps sensing that she didn’t exactly have the audience in the palm of her hand, she offered an olive branch, telling the assembled bosses “you can be confident we’re not going to have to come back again and do another Budget like this.”
But on what grounds are employers expected to have any such confidence? The Budget measures that have so alarmed businesses large and small were not in Labour’s manifesto and caught everyone completely off guard.
Even the Institute of Fiscal Studies warned in the Budget’s aftermath that unless Labour “got lucky on growth” Reeves would very likely have to come back in a year or two and raise fresh taxes.
However, having promised not to do it again, the Chancellor’s final line of defence was to claim that she hasn’t “heard many alternatives” to the tax rises she announced last month. This is sophistry; pretending that she didn’t want to raise taxes on businesses simply adds insult to injury.
The truth is Labour has played fast and loose with business leaders’ trust.