An expert has told Rachel Reeves to do three things as business momentum has “slowed to a crawl” due to tax hikes after intially growing by 0.7% in the first quarter of this year. The Chancellor’s policies have been compounded by the international trade environment after global tariffs were imposed by US President Donald Trump, they added. Muniya Barua, Deputy Chief Executive of BusinessLDN, said: “It’s welcome the economy made a strong start to the year but this momentum has since slowed to a crawl as hikes to employment costs and the uncertainty caused by global tariffs hit business confidence.
“Next month’s Spending Review marks a defining moment for this Government and its growth mission. The Chancellor should focus funding on measures that will deliver rapid payback for the economy, crowd-in additional investment and provide businesses with the certainty they need to make long-term decisions.”
Ms Barua then recommended that Ms Reeves changes her approach, urging her to do three specific things.
She said: “Re-instating VAT-free shopping for international visitors, providing Transport for London and its £11billion supply chain with a long-term funding deal and establishing a more ambitious Affordable Homes Programme would all send a clear message that the UK is open for business in an uncertain world.”
Officials, including the capital’s Labour Mayor, Sir Sadiq Khan, have for years called on the government to provide London’s transport authority with longer term funding so that it can plough on with important infrastruture projects.
The Express’ sister site MyLondon asked Ms Reeves in April last year whether she would guarantee cash for large infrastructure projects in London, such as extensions to the Bakerloo line and Elizabeth line and Crossrail 2, the successor to the Elizabeth line.
She said: “Of course I want to see the investment in infrastructure our country needs to grow after 14 years of mismanagement.
“But we have to always show where the money is going to come from, and we need to grow the economy to be able to release funds for crucial infrastructure investment.”
The then-Shadow Chancellor added: “I’ve set out a clear set of fiscal rules, that we would get debt falling by the fifth year of a forecast period, and we would balance day to day spending with tax receipts, and then, subject to that, invest in the things, the infrastructure investment, that we need to grow our economy.”