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Business leaders last night rounded on the Prime Minister over his claim that he is backing them ‘to the hilt’ as grim figures laid bare the pressures firms face.
Keir Starmer told bosses at the British Chambers of Commerce (BCC) conference in London that Labour had ‘stabilised the economy’ as he hailed his trade deals with the US and India.
But his speech came amid gloomy economic data and rebellion among backbench MPs that threatened to derail Labour’s fiscal plans.
The Office for National Statistics yesterday revealed that 17 per cent of businesses have run out of cash – the worst figure since the pandemic.
Separate figures from the Confederation of British Industry showed retail sales falling this month at the fastest pace since January 2024 – the ninth consecutive month of decline.
And in a speech at the BCC following Starmer’s appearance, Bank of England governor Andrew Bailey said firms across the country were slashing jobs and wages after Chancellor Rachel Reeves’ National Insurance (NI) hike.
Meanwhile, a leading economist warned that Starmer must face down Labour rebels by cutting welfare spending – or ministers will have to choose between a further tax raid or bond market turmoil.
Starmer told the conference: ‘We’ve stabilised the economy, and now we can go on to the next phase of government, building on that foundation, building a future of renewal that you can feel.
'And that means, of course, that we have to back you to the hilt – trust me, I’m fighting for you.’
But Pimlico Plumbers founder Charlie Mullins said: ‘I can’t believe Starmer has the brass neck to stand in front of hundreds of struggling business owners and tell them he’s on their side. It’s only been a year and Labour’s vicious NI hike and tax increases aimed at wealth creators have battered businesses.’
Julian Jessop, economics fellow at the Institute of Economic Affairs, said that ‘very little has changed for the better’ under Labour.
‘Underlying economic growth remains sluggish, inflation is picking up again, the labour market is deteriorating, interest rates have fallen more slowly than elsewhere, and the public finances are as fragile as ever,’ he said.
‘Businesses are struggling under the weight of high energy prices and additional payroll costs, and many are nervous about the extra burdens that will be imposed by the Employment Rights Bill. Other than that, it is all going swimmingly.’
Karl Mason, a spokesman for distillery trade group the UK Spirits Alliance, blasted Starmer’s trade deal boast as a ‘nonsense narrative’.
‘The punishing tax burden we face at home makes it virtually impossible to invest in export growth. Without reform to our domestic tax regime, talk of trade deals is meaningless,’ he said.
Pound hits near four-year high
The pound yesterday hit a near four-year high against the dollar amid speculation about Trump’s plans to replace US Federal Reserve chief Jerome Powell.
Sterling rose by a cent to just under $1.38 – the highest since October 2021 – in a boost to British holidaymakers preparing for the summer break.
The dollar fell to its lowest level since early 2022 against many major currencies.
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