Tony Blair think-tank urges: Take brakes off growth

Rachel Reeves has been urged by Tony Blair’s think-tank to ‘take the brakes off’ growth, as tax increases and new rights for workers hold back the ‘fragile’ economy.

Ahead of Tuesday’s Spring Statement, the Tony Blair Institute said Labour’s policies have ‘added friction at the moment the UK needs greater agility’. It added: ‘Britain needs a reset in favour of reigniting growth and dynamism.’

It comes as economists expect little change to borrowing and growth forecasts when the Office for Budget Responsibility (OBR) reveals its latest outlook on Tuesday.

The event is not expected to be a ‘mini Budget’ as it has been in the past, with Reeves pledging now to hold only one fiscal event each year – at the autumn Budget.

However, with the economy sluggish and unemployment rising, the Chancellor will face calls to act as firms struggle under the weight of rising costs and red tape – pressure intensified by Labour’s dismal performance in last week’s Gorton and Denton by-election, coming third behind the Green Party and Reform UK.

It comes as a survey of firms by pollster Ipsos shows 75 per cent are concerned about the economic outlook for the next six months and 23 per cent believe Reform would have the best policies for businesses, narrowly ahead of the Tories (21 per cent) and Labour (20 per cent). 

And economists at French bank BNP Paribas warned that while the OBR’s forecast this week should show only slight changes, Ministers will leave unaddressed the question of how to fund a promised increase in defence spending that is likely to create a funding gap of up to £15 billion.

The Tony Blair Institute’s report identified policies such as higher taxes on employment, curbs on migration and expanded employment protections as making growth harder.