'Mistakes, rookie errors'- Former BoE chief economist Andy Haldane slams Rachel Reeves's budget: MAGGIE PAGANO
The verdict was devastating: 'There's been mistakes, rookie errors. The black hole announcement sucked the confidence from business and consumers.
The Budget compounded that felony. It's not been the sort of thing we need to get the animal spirits in the country going and, therefore, the country growing.'
The criticism of Labour's economic strategy is all the more powerful coming from Andy Haldane, the former chief economist of the Bank of England, who knows a thing or two about what's happening in the weeds of the country.
More pertinently, Haldane also knows the impact that his excoriating critique of Rachel Reeves will have on economic sentiment and the financial markets.
He's never been one to mince words – his speeches while at the Bank were not only entertaining but as sharp as a razor and always on the money.
Luckily, Haldane – potentially the best governor of the Bank we never had – hasn't lost his touch one jot.
In fact, the once chief executive of the Royal Society of Arts seems to be running in top gear as his LBC radio interview yesterday showed so vividly.
You could almost hear the sucking of cheeks when saying: 'It's been a disappointing almost 12 months. I think everyone would say that.
'Business would plainly say that. The City would say that. Citizens would say that. I think back benches would say that.'
And so say all of us. When asked if Reeves is doing enough to encourage growth, Haldane replied starkly: 'Not even close.'
His precise words are worth repeating: 'To be clear, by growth I don't mean something as arid as GDP. I mean people's living standards, people's sense of things getting better in their community.'
Yet Haldane holds out some crumbs of comfort if Reeves changes tack, particularly now the economy is slightly perkier.
The many policy mistakes – such as the winter fuel allowance – should be corrected to avoid making a bad situation worse.
Even the latest small rise in defence spending won't have much impact; a few jobs outside of the South East but not enough to get growth going.
Yet if the Government were to increase defence spending to 3 per cent – if not 3.5 per cent – Haldane says, then Reeves could find the money to do so as the growth dividend from such a rocket boost would pay for the extra borrowing.
Surprisingly, Haldane doesn't diss Nigel Farage's latest economic forecasts.
He agrees with the Reform UK leader's plans to remove the two-child cap on benefits and new policies to attract more foreign capital and talent to the country – fundamental to growth.
Counterintuitively, he wants politicians to go bigger, bolder and come up with a credible plan with money and words behind it.
'Go big and go bold or go home.'
Quite. He criticises them all, arguing that initiative after initiative over decades have all been sub-scale and failed to trigger growth.
How right he is. And unusually for an economist, he's ahead of the curve.
Back in June 2021, he predicted that inflation was rising fast – less than a week after the Bank dismissed inflation as transitory. More recently, he's been in favour of faster interest rate cuts.
What are Farage and Kemi Badenoch waiting for? They should be racing against each other to persuade Haldane to help come up with such a plan.
In return, they could dangle the top job at the Old Lady.
Machin's worth it
There are two sorts of companies: those that have suffered a cyber attack and those that don't know they have suffered a cyber attack. That's the reality.
Which is why any suggestion that Stuart Machin, chief executive of Marks & Spencer, doesn't deserve his latest £7.1million pay package because of the recent cyber-hack is way off beam.
Machin's pay deal – which includes fixed pay and pensions of less than £1million – is based mainly on long-term bonuses, and most of it won't be paid out for at least two years.
It also relates to the year before the attack paralysed M&S's online sales.
Over that time, shares rose by a fifth and the retailer continued to up its game. He deserves every penny.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Times
11 minutes ago
- Times
Labour's plan for illegal migrants explained — and is it working?
What you need to know Sir Keir Starmer has secured improved commitments from France on tackling small boats but this has yet to translate into action on the ground Labour believes a new bill going through the Lords would make a significant difference in its pledge to 'smash the gangs' Despite rejecting the Rwanda plan as a 'gimmick', the prime minister's plan for return hubs has a similar aim, but is still at an early stage Ministers are looking at tightening the rules around Article 8 of the ECHR, the right to family life, in asylum claims When Sir Keir Starmer entered No 10 almost a year ago he pledged to make good on Labour's election promise to 'smash the gangs' and succeed, where the Conservatives had failed, in securing Britain's borders against illegal migration. Yet so far this year almost 15,000 people have arrived in the UK in small boats — up 42 per cent on this time last year and a 95 per cent rise from the same point in 2023. This week ministers sought to blame the weather and insisted that their policies would be effective in making good on Starmer's pledge. But what exactly is the government doing, and how successful has it been? A new deal with France From the British side perhaps the most critical element of the government's small boats strategy has been to leverage Starmer's relationship with President Macron to persuade the French to take a more proactive approach to preventing small boats setting sail from French waters in the first place. At the start of the year the prime minister hosted Macron at Chequers, where the two leaders agreed to step up bilateral co-operation to prevent Channel crossings. This led to a formal agreement a month later under which the UK extended a £480 million deal to pay for policing French beaches in return for new measures to stem the flow of boats. In particular, Paris agreed to change the law to allow police officers to apprehend vessels in shallow waters and restore the offence of an 'illegal stay' in France, which would allow the police to arrest migrants and smugglers before they attempted a crossing. There was also a commitment by France to speed up the construction of a detention centre in Dunkirk — paid for by the British — which had become bogged down in planning rows. But, so far, these commitments have yet to materialise. The plan to enable police to intervene within 300m of the shore is yet to be implemented amid opposition from the officers themselves. There is also still slow progress on Dunkirk. Verdict: Ministers believe improved co-operation with France is as close as it comes to a silver bullet to stem the flow of boats. But while Starmer has won important commitments from Paris, which were never given to the last government, these commitments have yet to materialise into action on the ground. New legal powers to tackle smuggling gangs In January ministers published a bill that they claimed would give police anti-terrorism-style powers to 'identify, disrupt and prevent' organised immigration crime. The Border Security, Asylum and Immigration Bill, which is going through the House of Lords, will make it illegal to handle items suspected of being used for organised immigration crime, such as boat parts and engines, with a maximum punishment of 14 years in prison. Those found collecting information that could be used by people smugglers will face up to five years in jail. This would include researching routes or vessels online, or arranging departure points, dates and times. The new offences will be accompanied by additional powers for Border Force officers, police and the National Crime Agency. They will be allowed to seize and search the mobile phones of anyone arriving in the UK illegally if they believe it will help an investigation into who organised the journey. The information gathered will also be available to be used in cases brought overseas. Verdict: Senior policing figures believe the legislation will make a difference in their ability to dismantle the smuggling gangs — pointing out that the numbers involved are in the hundreds — and are vulnerable to a concerted attempt to dismantle their activities. However, as the bill is not yet law, at the moment it remains an aspiration. Return hubs In one of his first acts as prime minister Starmer scrapped the Conservative Party's plans to send migrants to Rwanda, branding it a waste of money and a 'gimmick'. However, he is now drawing up a policy that sounds remarkably similar — sending failed asylum seekers to 'return hubs' in the west Balkans. There is one significant difference: the Tories planned to send all those who came to the UK on small boats abroad, while Labour's plan is limited to those who have exhausted all avenues of appeal. But the intent is similar: to deter people from making the crossings in the first place. Verdict: The plans are at a very early stage, and it is not a given that countries will agree to host the return hubs. Albania has already ruled out doing so. There remain significant legal and political challenges to getting the scheme off the ground. There is broader support for the idea among some EU states and also in the UN. But even if the plans get off the ground, there is no guarantee it will work as a deterrent. Deal with other countries In December Starmer negotiated a deal with Germany, which agreed to tighten its laws to make it easier to prosecute those helping to smuggle migrants to the UK. Ministers said this was important because facilitating people-smuggling to a third country was not technically illegal in Germany. However, the law has not yet been enacted, and ministers need to win approval from the new German government for it to be put into place. Starmer has also recently announced a partnership with Albania, Kosovo and North Macedonia to detect and deter illegal migration operations. Verdict: The prime minister has made improving international co-operation to tackle smuggling gangs a big diplomatic priority for the government. But while the issue is a huge priority for the UK it is less important for other countries, and it remains to be seen how quickly and effectively diplomatic deals are converted into concrete action. The asylum backlog and hotels There are 8,000 more asylum seekers living in hotels than when Starmer pledged during the election campaign in June last year to 'end asylum hotels, saving the taxpayer billions of pounds'. The reality of how difficult that is has become clear. This month the National Audit Office said the cost of asylum accommodation would be three times higher than previously estimated and more than 38,000 migrants are being housed in hotels, costing the Home Office an estimated £5.5 million a day — while a further 66,000 migrants are in dispersal accommodation such as large houses, bedsits and flats across different local authorities. • Migrants will be put up in hotels for years yet, Treasury admits The vast majority are awaiting asylum decisions, so speeding up that process is seen as key. The Home Office has had some success — it has been increased by 52 per cent and 24,000 people have been removed from the country. Yvette Cooper, the home secretary, is also planning to change the law to introduce a mandatory 24-week legal deadline for all asylum appeals. Verdict: If decision-making can genuinely be sped up it will help not only to bring down the hotel bill, but could act as a deterrent for those considering making the journey across the Channel. Human rights laws Ministers will bring in a new framework for judges to work to when deciding whether to allow migrants to make claims for asylum using the European Convention of Human Rights (ECHR). The most heavily used part of the ECHR, Article 8 — the right to family life — has been leveraged by murderers and paedophiles to stay in the country. Cooper revealed this week about 30 per cent of cases had been considered 'exceptional' by judges, and she wants to restrict that to a more narrow set of circumstances. • Kemi Badenoch would override ECHR on asylum for illegal migrants Verdict: Restricting the scope of Article 8 will save ministers from some embarrassing headlines but is unlikely to be enough on its own to fulfil the government's immigration pledges. An appetite to direct judges — and suggestions that the government could be open to reforming the ECHR — shows a willingness from Starmer and Cooper to step into an arena previously inhabited by the Tories and Reform UK. But as those on the right ramp up pressure for Britain to pull out of the convention altogether, the efforts may fall short.
The Sun
12 minutes ago
- The Sun
Half a million more kids will be entitled to free school meals in massive expansion of the scheme
HALF a million more kids will be entitled to free school meals under a massive expansion of the scheme, Sir Keir Starmer announced last night. Every child in a household on Universal Credit will now be eligible for state sponsored lunches, in a move that should lift 100,000 children out of poverty. 1 Expanding free school meals will save parents on benefits £500 per child every year, according to the Department for Education. Kids in UC households currently not eligible will be able to start claiming lunches from the start of the 2026 school year. The entitlement will apply in all settings where free school meals are available, including school-based nurseries and further-education settings. Most parents will be able to apply before the start of the new school year by providing a national insurance number. Education Secretary Bridget Philipson told The Sun the move is critical for ending the post-pandemic school attendance crisis and cracking down on bad behaviour. She said: 'What we're announcing is a game changer. 'This will make a big difference to children's attendance and behaviour at school because we know that if kids are hungry, they don't concentrate well. 'Sun will benefit directly from saving £500 per child per year.' Since 2018 kids have only been eligible for free meals if their household income is less than £7,400 per year. The major expansion comes ahead of the government's Child Poverty Taskforce publishing a ten-year strategy to drive down poverty. It also follows mounting pressure on the PM from rebel Labour MPs to scrap the two-child benefit cap. Sir Keir said: 'Working parents across the country are working tirelessly to provide for their families but are being held back by cost-of-living pressures. 'My government is taking action to ease those pressures. 'Feeding more children every day, for free, is one of the biggest interventions we can make to put more money in parents' pockets, tackle the stain of poverty, and set children up to learn.'
Daily Mail
13 minutes ago
- Daily Mail
Eberechi Eze breaks silence on Crystal Palace's battle to keep European place - after Eagles' chiefs held crunch two-hour talks with UEFA
Eberechi Eze says it would be a 'huge shame' if Crystal Palace were kicked out of the Europa League, but he is confident the issue will be resolved. Mail Sport revealed this week that the club's participation in next season's competition is in doubt because of UEFA rules on multi-club ownership. American businessman John Textor has a stake in both Palace and French club Lyon, who have also qualified for the Europa League. Textor is now offering to sell his 43 per cent share in Palace and UEFA are expected to confirm in the next 10 days the outcome of this week's hearing in Nyon. Eze, who scored the only goal in the FA Cup final win over Manchester City, is currently training with England here in Spain, but he is aware of the situation unfolding with his club. 'I really hope that that's not the case (removed from the Europa League) and I hope that Palace do get the reward for that (FA Cup win), because of what it took to actually achieve it,' he said. UEFA ownership rules may mean they cannot compete. US businessman John Textor is majority shareholder at Lyon while Brondby are owned by Palace co-owner David Blitzer 'It would be a huge shame if that was the case, but I'm trusting that it will work out in the end. 'I'm sure it will work itself out and it should work itself out, because there are players who have worked to be in this position. 'There are fans who have been with the team throughout the whole season and experienced everything. 'It would be unfortunate, but I'm positive that it won't be the case.'
