Put bluntly, expectation management is widely seen as having been shambolic. Two decisions in particular have backfired. First, this time last year, at the CBI conference, Reeves said explicitly that the 2025 budget would not involve tax rises on the scale of the 2024 one, but now it is clear that they will. Then, three weeks ago, Reeves gave a speech in Downing Street signalling very clearly to the markets, and to her party, that she was going to have to raise income tax in the budget, in breach of the manifesto. (Some of her allies now claim she was only floating an option, but that is not how her government colleagues understood it, or presented it, at the time; she was pitch rolling, not kite flying.) But then she changed her mind.<\/p>\n
Economists are saying that that this lack of certainty has been bad for growth. This is what Andy Haldane<\/strong>, the former chief economist at the Bank of England, told the BBC yesterday.<\/p>\n We\u2019ve had month upon month of speculation \u2013 fiscal fandango, basically. And that\u2019s been costly for the economy. It\u2019s caused paralysis among business and consumers. It\u2019s the single biggest reason why growth has flatlined, it\u2019s been grounded in the second half of the year.<\/p>\n<\/blockquote>\n In an interview this morning on the Today programme, Mohamed El-Erian<\/strong>, former chief economic adviser to Allianz, the German finance company, said the economic data suggested Haldane was right. He explained:<\/p>\n There are a number of data points that suggest that the prolonged speculation has flatlined growth. You see this in the latest retail sales numbers, which were the first to decline since May.<\/p>\n You see this in the decline of business confidence and consumer sentiment.<\/p>\n And there\u2019s a general agreement that the economy has paid a price for a process that has been delayed, that has been full of speculation, and that has seen the government send conflicting signals.<\/p>\n<\/blockquote>\n And Rupert Soames<\/strong>, chair of the CBI, made the same argument on Times Radio this morning. Soames, a former chief executive of Serco (and brother of the Tory peer Nicholas Soames), said:<\/p>\n This whole run into the budget has been really difficult and I think that in any future budgets lessons will be learned not to indulge in the constant technically pitch rolling \u2013 all these different ideas being inflated and then withdrawn and then tried again. It\u2019s been really confusing to businesses and it\u2019s unnecessary \u2026 This frankly pretty shambolic process in the run into [the budget] has been unhelpful.<\/p>\n<\/blockquote>\n Peter Kyle<\/strong>, the business secretary, is the government speaker at the CBI conference. In an interview on the Today programme, when he was asked about Andy Haldane\u2019s claim that pre-budget uncertainty was the biggest constraint on growth, Kyle rejected that. He said:<\/p>\n The biggest single challenge to growth in this country is the inheritance this government had. The Brexit deal alone has taken 4% of GDP off the whole economy. That is a fact. It far outweighs anything that speculation could and did cause.<\/p>\n<\/blockquote>\n He also defended what pre-budget briefing there has been in public, saying he and other ministers wanted to explain \u201cthe direction of travels\u201d, while not pre-announcing budget measures. And he said some pre-budget speculation in the media was \u201cwildly out of line\u201d.<\/p>\n Here is the agenda for the day. Over the last few months the Monday agenda has often included a Nigel Farage press conference. But this morning he\u2019s gone quiet, and is not facing the journalists. It\u2019s not hard to guess why<\/a>.<\/p>\n 10am: Peter Kyle, the business secretary, speaks at the CBI conference.<\/p>\n 11.20am: Kemi Badenoch<\/a> speaks at the CBI conference.<\/p>\n 11.30am: Downing Street holds a lobby briefing.<\/p>\n Afternoon: Keir Starmer is visiting a school in Cambridgeshire with Bridget Phillipson, the education secretary.<\/p>\n 2pm: More in Commons releases new polling about public expectations ahead of the budget.<\/p>\n 2.30pm: Steve Reed, the housing secretary, takes questions in the Commons.<\/p>\n 3.30pm: Michael Prescott, the BBC adviser who wrote the memo critical of the Trump speech edit and other instances of alleged bias that ultimately led to the resignation of the director general, gives evidence to the Commons culture committee. At 4.30pm Samir Shah, the BBC chair, and Sir Robbie Gibb, the former Tory spin doctor who is on the BBC board and who has led attempts to fight supposed leftwing bias at the corporation, give evidence. We will be covering the hearing on a separate live blog.<\/p>\n 4pm: Zia Yusuf, Reform UK\u2019s head of policy, take part in a Q&A at the CBI conference.<\/p>\n 4.40pm: Nigel Farage, the Reform UK leader, speaks at a rally in Llandudno.<\/p>\n If you want to contact me, please post a message below the line when comments are open (normally between 10am and 3pm at the moment), or message me on social media. I can\u2019t read all the messages BTL, but if you put \u201cAndrew\u201d in a message aimed at me, I am more likely to see it because I search for posts containing that word.<\/p>\n If you want to flag something up urgently, it is best to use social media. You can reach me on Bluesky at @andrewsparrowgdn.bsky.social. The Guardian has given up posting from its official accounts on X<\/a>, but individual Guardian journalists are there, I still have my account, and if you message me there at @AndrewSparrow, I will see it and respond if necessary.<\/p>\n I find it very helpful when readers point out mistakes, even minor typos. No error is too small to correct. And I find your questions very interesting too. I can\u2019t promise to reply to them all, but I will try to reply to as many as I can, either BTL or sometimes in the blog.<\/p>\n Share<\/a><\/p>\n Updated at\u00a005.07 EST<\/p>\n Key events<\/p>\n Show key events only<\/p>\n Please turn on JavaScript to use this feature<\/p>\n CBI chief Rain Newton-Smith urges Reeves not to impose ‘death by thousand taxes’ on business in budget<\/p>\n Rain Newton-Smith<\/strong>, director general of the CBI, opened its conference this morning by urging the government not to inflict \u201cdeath by a thousand taxes\u201d on British business in the budget.<\/p>\n She said the chancellor, Rachel Reeves<\/a>, said she was committed to growth. Newton-Smith went on:<\/p>\n Prove it \u2013 against opposition, against short-term politics, be it on welfare, be it pension increases, show the markets you mean business,\u201d she said<\/p>\n Short-term politics leads to a long-term decline, and this country cannot afford another decade of stagnation.<\/p>\n That means making hard choices for growth now before they get harder, having the courage to take two tough decisions rather than 20 easier ones.<\/p>\n Raising the headroom to make promises stick, it means one or two broad tax rises, rather than death by a thousand taxes.<\/p>\n<\/blockquote>\n Newton-Smith was referring to the debate about whether it would be better to raise money in the budget by raising a very large sum by increasing one of the main taxes (income tax, national insurance or VAT), or by much smaller increases across a wider range of options. Recently this has frequently been described as the \u201csmorgasbord\u201d approach.<\/p>\n With all the key budget decisions now firmed up (because of the necessity to get them assessed by the Office for Budget Responsibility), Netwton-Smith\u2019s appeal has come too late. It is understood that Reeves has chosen a smorgasbord budget.<\/p>\n But ministers do want to assure business that there will be some good news for them in the budget. This is from the Financial Times\u2019s pre-budget analysis<\/a> at the weekend.<\/p>\n Although business will still be hit on November 26 \u2014 including through a crackdown on pension payments made through salary sacrifice schemes \u2014 ministers say things could have been worse, as the chancellor delivers a package of tax rises and spending cuts worth up to \u00a330bn.<\/p>\n \u201cThere were things in there that we took out,\u201d said one person close to the budget preparations. Plans to increase taxes on partnerships, affecting lawyers and accountants, were dropped, along with a mooted \u201cexit tax\u201d on people selling assets and moving abroad. Banks are expected to be spared from a mooted increase in taxes on their profits.<\/p>\n<\/blockquote>\n Rain Newton-Smith speaking at the CBI conference. Photograph: Dan Kitwood\/Getty ImagesShare<\/a><\/p>\n Updated at\u00a005.52 EST<\/p>\n Kyle tells CBI that growth remains government’s key priority, and that there are ‘reasons for optimism’<\/p>\n Peter Kyle<\/strong>, the business secretary, used his speech to the CBI to insist that promoting growth remains the government\u2019s \u201cnumber one priority\u201d.<\/p>\n He also told business leaders in his audience that there were \u201creasons for optimism\u201d.<\/p>\n At the election Labour<\/a> said growth would be its key priority, but there has been less emphasis on this recently after business reacted badly to the employer national insurance increase in last year\u2019s budget.<\/p>\n Kyle said growth remained the key goal, and he said that he wanted to show that he understood business thinking on this issue. He said:<\/p>\n My priority in this job is to break down the barriers to business growth, to create the right conditions for you to do what you do best. Creating wealth and opportunity.<\/p>\n I want us to turn the corner on the low, slow, uneven growth Britain has experienced for almost two decades.<\/p>\n<\/blockquote>\n Kyle praised the contribution of the business community, saying their resilience was a national asset.<\/p>\n And he told them there were \u201creasons for optimism\u201d. The trade agreements with the US and India would help exporters, he said, the new partnership with the EU would help firms trading with the UK\u2019s biggest partner, and he said \u201cthe biggest shake-up in the planning system in an entire generation\u201d would also benefit the sector.<\/p>\n Britain was \u201cturning a corner, and unlocking economic momentum\u201d, he said.<\/p>\n UPDATE: Kyle<\/strong> said:<\/p>\n What we need to double down more on, which is my job, is to express why the singular importance of economic growth.<\/p>\n We inherited a situation when we came into office where we stuck in this buy slight grip of high taxes and low growth, and we are not going to break out of this cycle unless we do some pretty profoundly different things.<\/p>\n I really think we have inherited growth emergency, and we are still in it, and we will be in it for as long as we are unable to get our way out of this situation without increased economic productivity.<\/p>\n<\/blockquote>\n Peter Kyle speaking at the CBI Conference at the Queen Elizabeth II conference centre in London. Photograph: Dan Kitwood\/Getty ImagesShare<\/a><\/p>\n Updated at\u00a006.02 EST<\/p>\n Budget expected to include \u00a314.5m investment for job support in Grangemouth after refinery closure Severin Carrell is the Guardian\u2019s Scotland editor.<\/p>\n The chancellor, Rachel Reeves<\/a>, is expected to release \u00a314.5m in extra investment for the Grangemouth area on Wednesday to support faltering efforts to provide jobs after the closure of Scotland\u2019s only oil refinery earlier this year.<\/p>\n The PetroIneos plant closed down with the loss of around 450 direct jobs, because it was aging, loss making and uneconomic to upgrade. For many, it has become symbolic of the failure by both the UK and Scottish governments to plan properly for the transition to a net zero economy.<\/p>\n Despite publishing a detailed blueprint for attracting green, low carbon chemicals, fuels and plastics businesses to Grangemouth, boosted by \u00a3200m in UK government financing and \u00a325m in Scottish government development funding, few new jobs have so far been secured.<\/p>\n With Labour<\/a> facing defeat again by the Scottish National party in next May\u2019s Holyrood election, Reeves is under heavy pressure to deliver politically useful spending decisions in Wednesday\u2019s budget.<\/p>\n Amongst other Scotland-specific policies, she is being lobbied heavily to freeze or cut spirits duty to help the ailing Scotch whisky industry; cut or freeze levies on North Sea oil and gas; avoid any decisions which cut Scotland\u2019s grant from the Treasury.<\/p>\n The BBC quoted<\/a> a Treasury source saying:<\/p>\n We said we would stand squarely behind communities like Grangemouth, and we meant it. And we\u2019re building on what we have done already by putting millions in as a starter to help put the community on a firm footing and strengthening its places as part of the clean energy revolution.<\/p>\n These investments will help deliver a fair transition for Grangemouth, securing jobs for local people way into the future.<\/p>\n<\/blockquote>\n Share<\/a>Kyle says Badenoch would return to era of ‘fire and rehire’ as she calls for repeal of key measures in employment rights bill<\/p>\n According to extracts from her speech released overnight, Kemi Badenoch<\/strong> is going to use her speech to the CBI this morning to sugges that the employment rights bill is more of a threat to business than tax rises. She will say:<\/p>\n When I visit business and ask them what most causes anxiety, yes, they do talk about the tax burden.<\/p>\n But the single most complained about measure in this government\u2019s programme is not a tax rise. It is the employment rights bill \u2026<\/p>\n Take day one tribunal rights.<\/p>\n Under this bill, a new hire can turn up at nine in the morning and lodge a claim with an employment tribunal, before they\u2019ve even worked out where the toilets are \u2026<\/p>\n Then there is the de facto ban on seasonal and flexible work.<\/p>\n If a university undergrad chooses to get a Christmas job and works 40 hours a week in the three weeks before December, they then have the right to those same hours in January, February and March.<\/p>\n Great.<\/p>\n Except there\u2019s no demand then, and revenue falls off a cliff.<\/p>\n A measure designed to ensure employment in January will effectively mean firms don\u2019t hire in December \u2026 and everyone loses.<\/p>\n<\/blockquote>\n Badenoch will say the Tories would repeal \u201cevery job destroying, anti-business, anti-growth measure in this bill\u201d.<\/p>\n In a response issued overnight, Peter Kyle<\/strong>, the business secretary, said:<\/p>\n Nobody did more to hammer business and employees than Kemi Badenoch did as business secretary. Her Tory party crashed the economy \u2013 leaving firms and families saddled with sky-high interest rates, rocketing energy costs, and higher prices. Yet they still haven\u2019t apologised.<\/p>\n The Conservatives are clear: they\u2019ve declared war on workers. Badenoch already described maternity pay as \u2018excessive\u2019 and her cruel plans would mean a return of fire-and-rehire and quashed wages for workers, while she drowns business in red tape all over again.<\/p>\n<\/blockquote>\n Share<\/a><\/p>\n Updated at\u00a005.05 EST<\/p>\n Joel Hills<\/strong>, business and economics editor at ITV News, was not impressed by Peter Kyle\u2019s claim on the Today programme that the pre-budget uncertainty has not been much of a problem for the economy. (See 9.30am<\/a>.) Hill posted this on social media<\/a>.<\/p>\n The business secretary, Peter Kyle, has just told Today that he \u201crefutes\u201d the assertion that three months of endless leaks, briefings and speculation about which taxes will rise in the Budget has harmed the economy. The governor of the Bank of England is clear that it has.<\/a><\/p>\n<\/blockquote>\n Share<\/a>Business secretary Peter Kyle dismisses claim ‘shambolic’ pre-budget uncertainty has caused significant hit to growth<\/p>\n Good morning. We are two days away from the budget and, although we have a good idea of some of the main measures in it, the real debate about whether they are wise or not will not kick off until Wednesday afternoon. But Rachel Reeves<\/a>, the chancellor, is already facing criticism about the handling of the process ahead of Wednesday, and this morning, with the CBI holding its annual conference, those comments are getting fresh prominence.<\/p>\n Put bluntly, expectation management is widely seen as having been shambolic. Two decisions in particular have backfired. First, this time last year, at the CBI conference, Reeves said explicitly that the 2025 budget would not involve tax rises on the scale of the 2024 one, but now it is clear that they will. Then, three weeks ago, Reeves gave a speech in Downing Street signalling very clearly to the markets, and to her party, that she was going to have to raise income tax in the budget, in breach of the manifesto. (Some of her allies now claim she was only floating an option, but that is not how her government colleagues understood it, or presented it, at the time; she was pitch rolling, not kite flying.) But then she changed her mind.<\/p>\n Economists are saying that that this lack of certainty has been bad for growth. This is what Andy Haldane<\/strong>, the former chief economist at the Bank of England, told the BBC yesterday.<\/p>\n We\u2019ve had month upon month of speculation \u2013 fiscal fandango, basically. And that\u2019s been costly for the economy. It\u2019s caused paralysis among business and consumers. It\u2019s the single biggest reason why growth has flatlined, it\u2019s been grounded in the second half of the year.<\/p>\n<\/blockquote>\n In an interview this morning on the Today programme, Mohamed El-Erian<\/strong>, former chief economic adviser to Allianz, the German finance company, said the economic data suggested Haldane was right. He explained:<\/p>\n There are a number of data points that suggest that the prolonged speculation has flatlined growth. You see this in the latest retail sales numbers, which were the first to decline since May.<\/p>\n You see this in the decline of business confidence and consumer sentiment.<\/p>\n And there\u2019s a general agreement that the economy has paid a price for a process that has been delayed, that has been full of speculation, and that has seen the government send conflicting signals.<\/p>\n<\/blockquote>\n And Rupert Soames<\/strong>, chair of the CBI, made the same argument on Times Radio this morning. Soames, a former chief executive of Serco (and brother of the Tory peer Nicholas Soames), said:<\/p>\n This whole run into the budget has been really difficult and I think that in any future budgets lessons will be learned not to indulge in the constant technically pitch rolling \u2013 all these different ideas being inflated and then withdrawn and then tried again. It\u2019s been really confusing to businesses and it\u2019s unnecessary \u2026 This frankly pretty shambolic process in the run into [the budget] has been unhelpful.<\/p>\n<\/blockquote>\n Peter Kyle<\/strong>, the business secretary, is the government speaker at the CBI conference. In an interview on the Today programme, when he was asked about Andy Haldane\u2019s claim that pre-budget uncertainty was the biggest constraint on growth, Kyle rejected that. He said:<\/p>\n The biggest single challenge to growth in this country is the inheritance this government had. The Brexit deal alone has taken 4% of GDP off the whole economy. That is a fact. It far outweighs anything that speculation could and did cause.<\/p>\n<\/blockquote>\n He also defended what pre-budget briefing there has been in public, saying he and other ministers wanted to explain \u201cthe direction of travels\u201d, while not pre-announcing budget measures. And he said some pre-budget speculation in the media was \u201cwildly out of line\u201d.<\/p>\n Here is the agenda for the day. Over the last few months the Monday agenda has often included a Nigel Farage press conference. But this morning he\u2019s gone quiet, and is not facing the journalists. It\u2019s not hard to guess why<\/a>.<\/p>\n 10am: Peter Kyle, the business secretary, speaks at the CBI conference.<\/p>\n 11.20am: Kemi Badenoch<\/a> speaks at the CBI conference.<\/p>\n 11.30am: Downing Street holds a lobby briefing.<\/p>\n Afternoon: Keir Starmer is visiting a school in Cambridgeshire with Bridget Phillipson, the education secretary.<\/p>\n 2pm: More in Commons releases new polling about public expectations ahead of the budget.<\/p>\n 2.30pm: Steve Reed, the housing secretary, takes questions in the Commons.<\/p>\n 3.30pm: Michael Prescott, the BBC adviser who wrote the memo critical of the Trump speech edit and other instances of alleged bias that ultimately led to the resignation of the director general, gives evidence to the Commons culture committee. At 4.30pm Samir Shah, the BBC chair, and Sir Robbie Gibb, the former Tory spin doctor who is on the BBC board and who has led attempts to fight supposed leftwing bias at the corporation, give evidence. We will be covering the hearing on a separate live blog.<\/p>\n 4pm: Zia Yusuf, Reform UK\u2019s head of policy, take part in a Q&A at the CBI conference.<\/p>\n 4.40pm: Nigel Farage, the Reform UK leader, speaks at a rally in Llandudno.<\/p>\n If you want to contact me, please post a message below the line when comments are open (normally between 10am and 3pm at the moment), or message me on social media. I can\u2019t read all the messages BTL, but if you put \u201cAndrew\u201d in a message aimed at me, I am more likely to see it because I search for posts containing that word.<\/p>\n If you want to flag something up urgently, it is best to use social media. You can reach me on Bluesky at @andrewsparrowgdn.bsky.social. The Guardian has given up posting from its official accounts on X<\/a>, but individual Guardian journalists are there, I still have my account, and if you message me there at @AndrewSparrow, I will see it and respond if necessary.<\/p>\n I find it very helpful when readers point out mistakes, even minor typos. No error is too small to correct. And I find your questions very interesting too. I can\u2019t promise to reply to them all, but I will try to reply to as many as I can, either BTL or sometimes in the blog.<\/p>\n\n
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![\"Severin](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/11\/severin_carrell_140x140.jpg\")
Severin Carrell<\/p>\n\n
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