The Chancellor’s Oxfordshire address succeeded in dividing the nation and causing more frustration for business, says TERRY MURDEN
Rachel Reeves is said to enjoy ruffling feathers, even among her own backbenchers, like the naughty schoolgirl who likes to get attention by breaking the rules. This non-conformist Chancellor, however, is dividing the business community, the nation and her own party with a stubborn insistence on doing things her own way.
Ms Reeves regularly tells us she listens to what the business community is telling her. She can’t be taking much notice of what Scottish business is saying. Reading the briefing notes of her speech on Tuesday night it was clear that the focus of her recovery is on building an economic powerhouse in southeast England. Hence, our story the following day listing the number of projects that will fire up the Oxford-Cambridge corridor and expand airports in the region.
It is no bad thing to create “Europe’s Silicon Valley” and resolve long-standing transport issues that help get the economy moving. But apart from helping the billionaire Sir Jim Ratcliffe’s ambitions in Manchester and some titbits of other support across the north of England there was next to nothing on offer for the rest of the UK.
Maybe all that is to come. If it is, Ms Reeves could have said so in her Oxfordshire address. Instead, she left an angry Labour MP Brian Leishman to question why there was no mention of support for the Grangemouth oil refinery, due to close in the summer. He was not alone among the government’s supporters who publicly declare they are behind the Chancellor’s plans, but privately worry that it is all falling apart with alarming speed.
Politicians are not exactly renowned for sticking to their promises but the level of hypocrisy now on offer is unprecedented. On Waspi, or winter fuel payments, the list goes on. Four years ago, Sir Keir Starmer wrote on Twitter: “Congratulations to the climate campaigners. There is no more important challenge than the climate emergency. That is why I voted against Heathrow expansion.”
Now he and the Chancellor believe it represents economic recovery. Or at least recovery at some point in the undetermined future.
North of the border they have handed the SNP a penalty kick. In a crucial year for the party in Scotland there was nothing in the Chancellor’s speech for Scottish leader Anas Sarwar to offer voters. Aside from the silence on Grangemouth there was no mention of the carbon capture project, or an update on GB Energy, still without a CEO. It has one team member, a chairman who is touring the country making promises but is still to confirm when it will get down to work.
Scotland’s response to the Chancellor was, at best, muted. A small dose of enthusiasm from the Scottish Chambers of Commerce for a third runway at Heathrow and talk of “opportunities” for the supply chain was about as good as it got. Some believe that expanding Heathrow – if it happens at all – will suck more out of the rest of the UK than it gives back. The package of support for the southeast risks making it more difficult for the rest of the UK to attract investment and skilled workers.
It was the missing bits in Ms Reeves’ statement that prompted the biggest expressions of frustration, now turning to anger. Despite promising to go “further and faster” most businesses are hearing nothing that will address immediate problems, many of which she has created. Even the help she has offered is already falling apart. From today there is a 1p cut in duty on draught beer, announced in the budget, but higher national insurance contributions and wages mean the price of a pint will rise.
Hospitality is crying out for more help from both the UK and Scottish governments, with a warning this week that 6% of pubs and restaurants are considering closing. Retailers want more help to cope with rising costs and a shoplifting epidemic they say is out of control.
Starting a business is getting more challenging. Staying in business is becoming even harder. Come April many businesses will tackle the Chancellor’s tax and wage rises by cutting their already wafer thin margins or gamble by raising prices. Others will decide that enough is enough.
The Court of Session has now thrown up another test of the Labour government’s commitment to Scotland and to growth by putting the brakes on two North Sea oil and gas fields. While the climate issue has to be tackled, it will achieve nothing to merely hand control of our energy supply to other nations.
Renewables are a key part of the mix, but only a part. Oil and gas will continue to provide 75% of our energy needs. Is Labour listening? That will be shown by how it responds to the judge’s ruling.
Terry Murden was Editor and Business Editor at The Sunday Times Scotland, Business Editor at The Scotsman, and Business and City Editor at Scotland on Sunday. He is now Editor of Daily Business.
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