Rachel Reeves will attempt to restore confidence in the economy next week amid fears of tax hikes in the autumn and worry the country could slide into recession. She will deliver the Mansion House speech on Tuesday, less than a week after official figures showed the economy contracted for the second month in a row.
Ms Reeves is under pressure to set out how she will fund welfare u-turns and fill a potential £30billion hole in the nation’s finances. The Chancellor’s speech to leading City figures will come less than a fortnight after her tears during Prime Minister’s Questions.
Daniel Herring of the Centre for Policy Studies said one of Ms Reeves’s challenges this week will be “shoring up her own position”.
He said she “needs to focus on reassuring business and investors that she understands the pressures they are under” – and should “urgently” address barriers to growth such as “tax, planning and energy costs”.
He said: “Without this, Rachel Reeves will find it very difficult to keep her manifesto commitments on tax rises and British businesses will continue to suffer.”
Maxwell Marlow of the Adam Smith Institute, pressed her to reform the Financial Conduct Authority, describing it as “an unaccountable quango making up rules with barely any oversight”.
He said: “Its powers must be returned to ministers so that voters can actually hold decision-makers to account.”
Mr Marlow also wants the Treasury select committee given the “power to sack the Governor of the Bank of England”.
He said: “When inflation targets are missed, those in charge must be held to account.”
Emmanuel Igwe of the Prosperity Institute warned the economy could be “heading for a recession”.
He said: “Businesses are holding back on investing and hiring, worried about high taxes, complicated rules, and uncertain Government policies.”
Warning of a slump in business confidence, he added: “If this continues, it could mean fewer job opportunities, slower wage growth, and a tougher time for families and small businesses.”
A Treasury source said the Chancellor will “unveil the next step towards driving growth and delivering security for working people” by making the UK the “top destination for financial services”
Help is also promised so “hard-working people” will find it easier to invest “so everyone can save for a rainy day”. Measures are also anticipated to free businesses “from the stranglehold of excessive financial red tape”.
John Longworth of the Independent Business Network said the Chancellor has pushed Britain into a “low growth doom loop”.
He wants a 5% cut public spending – except for defence, policing and education – to fund cuts to business and personal taxes.
Douglas McWilliams of the Growth Commission warned the “public finances are in a parlous state, not least because public spending is out of control”
He said the “only way to restore the public finances to rude health is by cutting spending and eliminating waste”.
John Longworth of the Independent Business Network said the Chancellor has pushed Britain into a “low growth doom loop”.
He wants a 5% cut public spending – except for defence, policing and education – to fund cuts to business and personal taxes.
Douglas McWilliams of the Growth Commission warned the “public finances are in a parlous state, not least because public spending is out of control”
He said the “only way to restore the public finances to rude health is by cutting spending and eliminating waste”.