Hunt Budget ‘could put UK in doom loop’

JereMY Hunt’s Autumn Statement did nothing for growth and threatens to leave the UK in a ‘doom loop’ of higher taxes, the boss of Britain’s leading business group said yesterday.

Tony Danker, director-general of the Confederation of British Industry (CBI), made the stark assessment as the organisation prepares to host rishi Sunak at its annual conference later today.

He said the statement ‘gets us to Christmas’ but much more needed to be done to drive growth in the economy next year, when it is expected to be in a prolonged downturn. The Chancellor laid out new tax and spending plans in a bid to show he was serious about tackling inflation, closing a £55billion hole in the public finances and repairing the damage caused by predecessor Kwasi Kwarteng’s disastrous mini-Budget.

But the plans will involve increasing the UK’s tax burden to the highest since the Second World War. Tory MPs have warned that it will do nothing to help ‘strivers and risk-takers’ who fuel economic growth. Mr Danker said: ‘I thought he [Mr Hunt] did a good job of covering all the bases but he did nothing to grow the economy.’

While acknowledging that ‘tough choices’ are needed to tackle inflation, he said tough choices were also needed to fight recession.

That will involve issues such as immigration, red tape and planning rules as well as a resolution of the Northern Ireland Protocol dispute, he argued.

Mr Danker said businesses were ‘having a wobble about whether to invest’ and needed clear signals about being serious on growth. ‘The problem is there’s no money left,’ he said. ‘ You can’t use the Bank, you can’t use the Treasury – so we all get in this doom loop of low growth and yet more tax rises.

‘You need to have a growth engine for the British economy. Businesses obviously need to step up and invest and innovate, but government has to give that stuff a lift. We’re not able to ask them for money any more so we need to find new ways and they need to find new ways to get growth momentum in the country.’

Both Mr Danker and Mr Sunak are due to address the CBI conference in Birmingham, where the Prime Minister will deliver a keynote speech on innovation.

Asked about the Autumn Statement, Mr Danker told the BBC: ‘There was nothing there that tells us the economy is going to avoid another decade of low productivity and low growth. The fear is there just wasn’t enough to say, “We can grow again, we can afford the NHS, we can afford social care”.’

Mr Danker will use his speech to say: ‘Britain’s had 15 years of low growth and flatlining productivity. We can’t afford a repeat.’