The Chancellor's pro-enterprise rhetoric is hollow
Before the election last year, Ms Reeves made great efforts to woo bankers, entrepreneurs and investors with pledges of fiscal prudence and sensible stewardship as a pro-enterprise Labour Chancellor.
But her first Budget wrecked that relationship almost overnight, loading taxes on to employers, hitting the inheritance planning of farmers and business owners, kowtowing to the unions and scaring off thousands of wealthy taxpayers, while boosting spending in the unproductive public sector.
The Chancellor tried to make amends with a welter of announcements, including the relaxation of lending rules, the acceleration of new stock market listings and other ostensibly City-friendly amendments. She promised deregulation – even as Angela Rayner is bringing in a Bill loaded with new workers' rights.
Her stated aim is to 'boost growth' and yet there are no signs of this happening. The annual inflation rate jumped to 3.6 per cent in June, raising the spectre of 'stagflation' and the likelihood that interest rates will have to stay higher for longer, killing any green shoots that might poke through.
It was what was missing from the Chancellor's speech that was alarming. There was no promise to get on top of public spending or reform the two areas sucking the life out of the general economy: welfare and the NHS. The revolt by Labour MPs against benefit reform has effectively killed off any hopes of retrenching the budget.
The expectation now is that Ms Reeves will have to bring in tax rises in the autumn, something she did not rule out, thereby ensuring a summer of speculation over what they might be. This is guaranteed to put a brake on investment while well-off investors and would-be entrepreneurs wait to see what is in store. The prospect of a wealth tax is looming ever larger.
The Chancellor repeated her claim that 'Britain is open for business' and yet that is belied by the exodus of thousands of multi-millionaires. Until the tax burden is reduced, borrowing cut, spending curtailed and the state pared back, the Chancellor's bullish rhetoric will sound hollow.
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