UK business leaders speak out on fallout from mini-Budget

3 min


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92 shares, 153 points

Lord Stuart Rose, chair of Asda
“[The government’s] intentions were honourable: they want to get growth back and get us back on an even keel, and the energy price cap was absolutely necessary and the right thing to do. Tax cuts could achieve the opposite of what was intended. The energy measures could reduce inflation by 4 percentage points — great, but you’re just putting it back in a different place. I can’t see how you can kill inflation and get growth at the same time and in my books you have to kill inflation first.”

Crispin Odey, founder of Odey Asset Management
“I’m sure Kwasi [Kwarteng] told them [the Bank of England] what he was going to do [beforehand]. The Bank of England should have put up rates by 1 per cent. This Budget has annoyed a lot of people in a way nothing else has. People who voted Remain [at the Brexit vote in 2016] are not enjoying it.”

Baroness Helena Morrissey, City financier and founder of the 30% Club
“‘Going for growth’ was necessary — but needed to be thought through very carefully to avoid achieving the exact opposite, which is where we are headed now. What good is £100 a month of [tax] cuts if your mortgage payment goes up twice that amount? We need policy levers to be pulling in the same direction, not fighting each other and cancelling each other out. It would be great to hear the Chancellor say ‘we listened, we got this wrong, we’re going to limit the measures to reversing the planned corporation tax and NI increases’. I hope he does that but the evidence to date suggests a preference to ‘double down’.

Lord Karan Bilimoria, founder of Cobra beer and vice-president of the CBI

© Simon Dawson/Bloomberg

“Businesses were very happy overall about cutting taxes. A weak pound also makes your exports more competitive although the hops we import are much more expensive now. But it also means rising costs for consumers that will exacerbate the cost of living crisis. Not only does the Bank of England now need to control inflation but also needs to control the pound. Business craves certainty and we are more uncertain now than I have ever known. The government needs to communicate its plan more clearly.”

Shai Weiss, chief executive of Virgin Atlantic
“[Prime minister Liz] Truss said she would take difficult decisions upon entering into the role. Maybe they need to take more difficult decisions to reverse the decline of the pound and ensure this country is not left with . . . perceived weakness in international markets. Sometimes all of us in this room should be humble enough to say that if I said something that is not working, maybe I should reverse course. That is not a bad thing to do.”

Michael O’Leary, chief executive of Ryanair
“The Truss government has poured petrol on a bonfire with a Budget that does not really make a lot of sense, and is likely to drive inflation further.”

Willie Walsh, former head of British Airways

© Bloomberg

“It is very frustrating when you see these knee jerk government responses to some of the challenges they face. Clearly in an effort to make themselves look popular with the electorate, taking decisions that have massive economic impact on companies.”

Phil Urban, chief executive of UK pub group Mitchells & Butlers
“All energy support has done is stop things spiralling further out of control.”

Stephen Parkinson, senior partner at City law firm Kingsley Napley
“My feeling is that the government wholly misread the likely reaction not just of markets but also the populace. Their attempts to stimulate the economy conflict with the BoE’s attempts to contain inflation, and are unlikely to work given that the overall economic climate is so unpromising, as well as being at least in part politically unpopular. They have created instability and uncertainty over economic policy, and growth does not flourish in those circumstances. A reversal of policy may be the right thing to do but the short-term impact could well reduce even further the credibility of the government.”

Nicola Foulston, chief executive of professional services group RBG Holdings
“I am horrified . . . Whilst I accept some of the arguments around tax simplification, the fundamental application of the accelerator at a time when the BoE will naturally be applying the brake on inflation is nonsensical. This isn’t a form of economics I recognise. Tax cuts need to be paid for.”

Reporting by Jonathan Eley, Joshua Oliver, Oliver Barnes, Philip Georgiadis, Laurence Fletcher, Daniel Thomas and Kate Beioley

Source: Financial Times


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