STUNTING GROWTH
British business bosses say Reeves’ focus on growth doesn’t fix problems caused by her Budget
Companies want the hike in employer National Insurance delayed
THE Chancellor’s focus on future growth doesn’t fix problems caused by her Budget, businesses insist.
Rachel Reeves yesterday tried to swat away accusations she had talked down the economy, with upbeat claims she would kickstart growth.
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However companies want the hike in employer National Insurance delayed — which they say would be a quicker route to reviving growth.
The Chancellor’s Plan for Change included a rehash of ideas including Heathrow expansion, a UK-style Silicon Valley between Oxford and Cambridge and confirmation of nine new reservoirs — announced in December by OFWAT.
The British Chambers Of Commerce and other lobby groups welcomed the revival of large infrastructure projects amid hopes they will create a ripple effect across the supply chain.
But business leaders warned the boost could take years, while firms are already cutting jobs and investment after the Budget’s £25billion tax raid.
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Stephen Phipson, boss of Make UK, highlighted the “clear contradiction between implementing laudable measures such as planning reform and infrastructure investment whilst . . . applying a handbrake through measures which will inevitably reduce investment and freeze recruitment”.
Tom Beahon, co-founder of the UK sportswear brand Castore, said talks on longer-term projects were unlikely to immediately solve headaches created by the Budget.
He said: “I’m an eternal optimist.
"We are an international business and proudly British, but we are being disadvantaged against global peers because of the higher increase in costs.
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"The UK is not the optimal place to invest our capital”.
Helena Hudson, founder of the Real Eating Company, which has eight cafes across the South East, reckoned: “Small business is the backbone of the UK’s private sector but I feel we’re being overlooked.
Rachel Reeves backs third runway at Heathrow Airport as she outlines Labour’s plan for growth after brutal Budget
“We do not have broad shoulders to absorb the tax burden coming our way and this is a big concern.”
Rami Baitieh, chief executive of Morrisons, said the supermarket chain is facing £75million in extra costs and declared: “The Budget is very unhelpful.”
Meanwhile Tesco yesterday announced 400 job cuts, days after Sainsbury's axed 3,000 and Morrisons made 200 redundancies.
Next's chief executive, Lord Wolfson of Aspley Guise, has also used his position to support amendments to the planned National Insurance increase in the House of Lords.
Simon Gleeson, partner at business advisers Blick Rothenberg, said “A pause and rethink on Employers NIC changes then would filter down to family incomes, job creation and upskilling of future generations seeking employment and opportunities such as job apprenticeships and entry-level graduate roles.”
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LLOYDS TO CLOSE 136 BRANCHES
LLOYDS BANKING GROUP is to shut another 136 branches in a bitter blow for the high street.
The closures, taking place between this May and next March, cover 61 Lloyds sites as well as 61 at Halifax and 14 at Bank Of Scotland.
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It confirms fears that branches would be axed after Lloyds said just weeks ago that customers would be able to use services across any of its branded branches.
Lloyds is also shutting two big offices in Liverpool and Dunfermline, impacting more than 1,000 staff.
It blamed the changes on more customers switching to online banking.
A spokesman said customers could use banking hubs, but fewer than 200 remain in the UK.
Meanwhile more than 6,000 branches have shut in the past decade.
The closures, which come on the back of NatWest closing 53 branches earlier this week, risk leaving some towns without banking access.
CAR FIRM TAKEOVER
BRITISH car parts maker DowlaisS has agreed to a £1.2billion takeover by Detroit-based rival American Axle & Manufacturing.
Dowlais, which was spun out of GKN, said the move would give benefits of scale during the switch to electric vehicles.
Society Of Motor Manufacturers and Traders figures show the slowdown in that transition contributed to a 12 per cent fall in overall car production last year.
AI RIVALS’ DEEPSEEK DEEP PEEK
U.S. partners Microsoft and Open AI are investigating if a Chinese start-up that triggered tech panic this week used its unauthorised data to launch its cheaper chatbot.
DeepSeek unveiled a free-to-use bot that rivals OpenAI’s ChatGPT at a fraction of the development cost.
But OpenAI says it has evidence that the Chinese firm used its own models to train DeepSeek’s.
Microsoft has invested almost £11billion in OpenAI.
White House AI czar David Sacks said: “There’s substantial evidence that DeepSeek distilled the knowledge out of OpenAI’s models.”
Experts have warned about the security risks of people plugging their personal data into DeepSeek’s tech, as the data is then stored in communist China.
WH SMITH, which wants to sell 500 high street stores, saw high street sales fall 6 per cent in the half-year to January 25, while its travel business rose 7 per cent.
HMV’s owner is pondering a bid for the high street arm.
D-DAY IN GAS AND OIL FEUD
THE Government is set for a fresh battle between growth and its green agenda in the row over two of Britain’s biggest oil and gas fields.
A court is today expected to say that ministers must make a fresh decision on Shell and Equinor’s Jackdaw and Rosebank projects in the North Sea if it deems their licences were granted unlawfully.
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Eco campaigners at Greenpeace have argued that the fields fall foul of environmental assessments as they should also consider the full impact of end users, including petrol in cars and gas in boilers.
The energy companies say the partially built developments will bolster investment in the UK and energy security.
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If Shell and Equinor’s consent is quashed, as expected, they will need to reapply to the Government for consent.
This could trigger a fresh tussle between Energy Secretary Ed Miliband and growth-seeking Chancellor Rachel Reeves.
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