Latest news with #AndyHaldane
Daily Mail
28-06-2025
- Business
- Daily Mail
'Labour is sucking the confidence out of business,' says Ex-BoE chief economist
Andy Haldane is demob happy. He's ready to get on the road, first to his holiday home on the Kentish coast and then to France and Italy before finishing off the year in the southern hemisphere to catch the cricket. His six-month break has been a long time coming – it's about five to ten years too late, Haldane, 57, laughs. It's the first extended time off he has had since joining the Bank of England as a graduate trainee, rising to become chief economist and something of a rock star in the dry world of central banking. His provocative speeches made world headlines as he shot down much of the orthodoxy of the financial system, drawing on evolutionary biology, and even coming out for the Occupy movement after the 2008 crash. Then in a surprise – some would say premature – move he left the Bank in the pandemic to lead the Royal Society of Arts, as well as to give him room to shoot the breeze, free from 'central bank shackles' and engage in broader policy-making. Which he did, advising the Tories on Levelling Up, and he still sits on the Treasury's Economic Advisory Council. Now he's off again. We met at his office at the Royal Society of Arts, where the bookshelves are already empty and his desk is clear. This time he's taking the break to 'cleanse his brain' to work out what to do next after 32 years in the saddle. He says: 'I like change, and I love ambiguity – it creates opportunity.' But there's no ambiguity about Haldane's long list of ways to get Britain back on its feet. For a start, if he were still on the Bank's Monetary Policy Committee, he would have voted for a cut at its last meeting. More pertinently, Haldane would have voted for base rate cuts going back to the start of last year, well before the MPC's first cut in August. 'That was too late. It would have been less painful if rates had been lower. The economy has been crabbing sideways for at least three years, and lower rates would have cut households some slack.' He accepts most MPC members voted against a cut due to fears the Middle Eastern conflict will fuel inflation, saying: 'It's tricky. When you have missed out on the upside, there can be a bit of scarring.' Scarring for the MPC or economy? 'Both,' he replies, grimacing. 'Some members of the MPC are not looking closely enough at the quantitative data. It's clear the labour market is shedding jobs. We can't miss getting it right again.' Famously, Haldane is one of a handful of economists who did not miss out on the upside. He warned that the inflation genie was escaping the bottle in late 2020, calling for rate rises when his peers dubbed rising prices post-Covid and post-Ukraine 'transitory'. His prescience is just one reason why so many in the City, across the political divide, say Haldane is the smartest Governor we never had, and should have been appointed instead of Andrew Bailey. What does he say? 'I loved the job I was doing. I didn't want to be Governor,' he answers, politely. Leaving the Bank has certainly allowed him to fire more missiles from the sidelines, most recently criticising Rachel Reeves' Budget as full of 'mistakes, rookie errors'. He blames her policies – especially the increase in employers' National Insurance, and harping on about the black hole left behind by the Tories – for sucking the confidence out of British business. The Chancellor's non-dom policy – already driving the wealthiest out of the country – should be refined or reversed, because it will lead to net fiscal losses for the Treasury, he says. So too would Reform UK's Britannia card idea, which is too lax. A 'better balancing point' needs to be struck. What drives him to distraction is the lack of serious soul-searching on the big issues, such as tax or welfare spending. He says: 'The poor level of debate at Westminster, in think-tanks, the civil service, academia and elsewhere is deeply depressing. Politics doesn't seem to be growing great thinkers like the late Nigel Lawson, the last great tax reformer, any more.' Instead, politicians should go 'big, bold, plural and at scale'. He adds: 'We need to supercharge supply-side reforms. There must be greater incentives for entrepreneurship and businesses.' Reconfiguring the 'onerous' tax code is not enough. Scrapping stamp duty on housing would help. He says: 'It glues up the housing and jobs market – we have the lowest level of people moving jobs since the financial crisis. We are taxing mobility, and so preventing living standards from rising.' Why, he asks, do we give capital investment exemptions on machinery but not on training people? And why is debt favoured over equity? How mad is that? 'Shiny billion-pound projects like new nuclear power stations or railways are great but if we don't have the skilled workforce, what's the point? Why do so many of our universities not have graduate apprenticeship schemes?' Apprenticeships are down by a third, he adds, so the apprentice levy needs to be made workable with business urged to play a bigger role. And change is possible. 'Look at the amazing job Jesse Norman MP is doing at Hereford with his New Model Institute for Technology & Engineering and the launch in Manchester of a new technical baccalaureate.' Spending on skills is falling: the latest international league tables show the UK's expenditure on training is in the relegation zone. 'How can it be that we have a million 'Neets' – those aged 16 to 24 not in education, employment or training? It's an economic blight, but also a personal blight.' His solution? Scrap GCSEs, exams designed for the late Victorian age. 'If a third of youngsters are emerging functionally illiterate and innumerate from school, then something is very wrong. We need a broader-based system of education based on hands and hearts, and creativity, where we smash the ceiling internationally.' Britain's 'economically inactive' – the nine million people of working age who are not in work – must be helped back into the workplace. 'The impact on their mental health, families and communities is enormous,' he says. 'We need to scrap Jobcentres. That's where people used to go for benefits.' Yet, Haldane remains an optimist. The reset button for growth, he says, could come from higher spending on defence and security, which could prove 'jobs-rich, skills-rich across the country'. 'The country would understand that,' he says. 'The bond markets would understand that.' After all, growth is the great redeemer for bond markets, he says. 'They know tomorrow's growth pays for today's borrowing. But it requires politicians to go big and be bold. If not, forget it.' Is he worried that bond yields – the interest the Government pays on its debt – are back up to levels last seen during the Liz Truss era? The Truss period, he points out, coincided with bond yields shooting up around the world after an anomalous 20-year period of low inflation and low interest rates. 'The global cost of money has gone up. Reality has been reasserted in the markets. We are back up to the UK batting average.' Haldane may be footloose but still has a clutch of 'passion' projects: he's the new chancellor of Sheffield University, where he read economics, and chairs the Glasshouse International Music Centre in Gateshead – homage to his spiritual roots in Sunderland, where he was born, and his family's brass band tradition. Will he be looking for a new desk job after his break? 'Who knows? I might love daytime TV and dog-walking,' he says with the biggest of laughs. 'Or, come December, I might decide to manufacture cider by the champagne method.' And when the Governor's job comes up again in three years' time, would he be interested? He smiles. Judging by the look in his eye, of course he would.
The Guardian
08-06-2025
- Business
- The Guardian
Farage is like a tribune for the working class, says former Bank of England economist
Nigel Farage is the closest to a 'tribune for the working class', the former Bank of England chief economist has said in a stark warning for Keir Starmer's Labour party. Andy Haldane said the surge in support for Reform UK in the opinion polls suggested there had been 'something of a moral rupture' between the government and many voters, which should spur Starmer to take action with a 'radical reset' of its growth plans. He said Labour's misfiring growth strategy and decisions on winter fuel payments and the two-child benefit limit had opened the door to Farage by fuelling a sense that mainstream politicians promise change but fail to deliver. Asked whether Reform was the new party of the working class, Haldane said: 'I do not know. [But] as things stand today, and doing no more than echoing what is in the polls … that is what the larger part of the working classes think – which matters rather more than what I think. What is certainly true, is Nigel Farage is as close to what the country has to a tribune for the working classes. 'I don't think there's any politician that comes even remotely close to speaking to, and for, blue-collar, working-class Britain. I think that is just a statement of fact and in some ways, that underscores the importance of the other parties doing somewhat better to find a story, to find a language, and to find some policies that speak to the needs of those most in need.' Labour fended off Reform in Thursday's Holyrood byelection by winning the central Scotland seat of Hamilton, Larkhall and Stonehouse. But its defeat last month in the Runcorn byelection and Reform's victories in hundreds of council seats in England has raised concerns that Labour is struggling to hold on to core voters in its heartlands. Ahead of Rachel Reeves's spending review on Wednesday and imminent announcement on the government's industrial strategy, Haldane urged the chancellor to double down on Labour's devolution agenda and to provide extra financial firepower to support manufacturing jobs and communities. Reeves has argued that Britain's economy is turning a corner after a weak performance at the end of 2024, although has acknowledged that the public 'are becoming restless' amid a battle to raise living standards. Haldane, a key architect of the last government's levelling up plans, said a rethink of Labour's regional growth plans was needed. 'Opportunity is knocking for a reset,' he said. 'Both in how the growth and industrial strategy is conceived of, but also how it's financed. 'Personally I have been very disappointed with the government offerings on this front so far. I am surprised there has not been a greater focus, other than in sloganeering, on properly empowering the regions and nations of the UK. Frankly without which the government's growth mission has no hope.' Haldane, who is stepping down as the chief executive of the Royal Society of Arts thinktank at the end of this month, said a 'sterile injection of optimism, money, and power' was needed in communities where many voters feel left behind. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion He said the industrial strategy, which will set out government plans to support eight key sectors of the economy, could help Labour to win support in 'red wall' seats in the north and midlands of England where Reform is making headway. However, more investment was required in education, skills and training. 'A key missing ingredient from the government's growth plan generally, and from previous governments' growth plans, and at risk of being missing from the industrial strategy, is what is the people strategy to back that up,' he said. Haldane had been chair of the last government's Industrial Strategy Council before the group was abolished. Labour has created an advisory council to oversee its plan, led by Clare Barclay, the head of Microsoft in the UK.
Daily Mail
02-06-2025
- Business
- Daily Mail
'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.
The Independent
10-03-2025
- Business
- The Independent
Introducing a tourism tax would revolutionise our crumbling cultural landscape
I've lost count of the government meetings I've attended framed by the health warning: 'Sorry – there's no money.' This is the refrain that greets beleaguered arts and cultural organisations up and down the country. While the odd, welcome dollop of cash has sometimes been found in a Department for Digital, Culture, Media and Sport (DCMS) budget, or the now-defunct Levelling-Up Fund, our cultural infrastructure is crumbling. Former Bank of England chief economist Andy Haldane points to a 'systematic underinvestment' in our rich cultural assets over many years, and a country that has 'stymied its local leaders' capacity to raise taxes to invest in them'. This has not just manifested itself in a horrendous backlog of repairs and a dearth of creative opportunities: civic museums, playhouses and libraries are closing, and informal spaces like pub theatres and grassroots music venues are disappearing completely. All of these make up the unique social and cultural fabric of places and communities. At the same time, Britain's arts, culture, history and heritage support a multi-million-pound tourism industry – worth about £1.6 billion a year, according to the latest Visit Britain figures. London alone provides the greatest concentration of artistic and creative endeavour in the world, with museums and galleries (national museums are free), libraries, theatres, heritage sites and concert halls being the top reasons why overseas visitors flock here. Other major cities across the nation, like Manchester, Liverpool and Edinburgh, are also hives of cultural and creative industries, and bustling tourist hotspots. So, when the government says, 'no more money' and asks for 'any ideas for new funding models?', I believe there is a potential answer. My think tank, the Cultural Policy Unit, has recently published a report proposing a modest 'City Tourism Charge', a mandatory scheme along the lines of the hotel levies that operate in so many other countries across the world. For the most part, this levy involves a small daily sum – a few pounds, for example – added to hotel or guesthouse bills. You may well notice this 'local tax' when you come to settle up, but it's unlikely to have stopped you from booking in the first place. We suggest that the charge is both modest and 'progressive', so that, on a sliding scale, higher-end accommodation charges more. So, for instance, a three per cent levy on an £840 double room at London's Claridge's would cost an extra £25.20 a night, while a standard double room at Euston's Premier Inn (approximately £120) would cost £3.60. A vital part of our proposal is that the funds generated be 'ring-fenced for cultural infrastructure and placemaking'. Put simply, this embraces everything from major heritage sites to cultural festivals, film production hubs to makerspaces and artist studios, and grassroots venues to the creative districts that so many visitors enjoy. It's important that the funds raised are reinvested back in the cultural and tourism sectors that generate them, creating a self-sustaining 'circular' model. And to make sure this levy benefits every part of the country – not just London – we recommend that the money is distributed locally, overseen by metro mayors, and that a portion of it is redistributed regionally. It is essential, both for the hospitality sector and the cultural sector, that the result is transformational, particularly because the tourist economy is currently facing increased taxes. Drawing on costings by the Institute for Fiscal Studies, and most recently the Northern Powerhouse Partnership, we calculate that a three per cent 'city charge' on visitors' hotel bills would generate over £1 billion a year. To put this into perspective, the sums raised could be well over twice as much as Arts Council England has available to invest in its portfolio of organisations. Hoteliers may not like everything about this proposal – and there are legitimate concerns. But I hope our report will help navigate some of the thorny issues. Firstly, we are recommending a mandatory rather than a voluntary charge, which reduces the administrative burden on accommodation providers. Secondly, the charge should be modest and designed in collaboration with the hospitality sector, so as not to discourage visitors. Thirdly, all the funds generated must be 'additional' – not hijacked to make up for shortfalls elsewhere. And finally, transparency about how the money is spent is key. A recent survey, for instance, in the Puglia region of Italy, found that visitors were happy to pay more if the money raised was used to protect and enhance the region's natural environment. Our USP is our vibrant cultural landscape. What depresses people most is when taxes or levies are swallowed by Treasury coffers. This 'charge' must make a tangible difference to visitors and residents alike. At present, England is something of a global outlier in not introducing a mandatory tourist charge; even Scotland and Wales are well down the track of legislating for hotel levies (Scotland's scheme kicks off in 2026). So, let's work together with hotels and the wider hospitality sector to show that we not only cherish our reputation as the cultural powerhouse of the world, but also, through instituting a 'city tourism charge'', that we mean business.
The Guardian
03-03-2025
- Business
- The Guardian
Soaring UK crime costing up to £250bn a year, says thinktank
Soaring levels of crime are costing Britain's economy as much as £250bn a year, according to a report that blames austerity for a breakdown in policing and criminal justice. The report by the centre-right thinktank Policy Exchange, backed by the former Conservative chancellor and home secretary Sajid Javid, said that years of cuts to funding for the police, prisons and courts had contributed to a dramatic rise in crime which was holding back the economy. The report said an 'epidemic' of shoplifting, alongside other crimes, was hitting businesses, the public sector and individuals hard, with a direct cost to the economy of about £170bn a year, or about 6.5% of gross domestic product (GDP). In addition, it estimated there were intangible effects on behaviour derived from a fear of crime. Although this is difficult to quantify, it warned that actions being taken by businesses and individuals to avoid being a victim of crime – such as not visiting the high street, or deferring investment – could take the total cost to as much as £250bn, or 10% of GDP. With the government under pressure to find money for public services and defence spending, Policy Exchange said Labour needed to invest an additional £5bn a year into tackling a crisis in prison capacity, the size of the policing workforce and clearing backlogs in the courts. Alongside highlighting austerity, the thinktank recommended reforms to sentencing, including automatic tougher sentences for prolific offenders and deportation of foreign offenders. The report, which was also backed by the former Bank of England chief economist Andy Haldane, urged the government to increase public spending on policing and the criminal justice system to help underpin the economy. Official figures show a steady increase in levels of crime over recent years, while Britain's largest retailers have warned of a rise in shoplifting with huge costs for the industry. Last year, Sharon White, the former chair of the John Lewis Partnership, described the increase as an 'epidemic'. Police-recorded shoplifting has increased by 51% relative to 2015 and is at its highest level in 20 years. Police-recorded robberies and knife crime offences are up 64% and 89% respectively over the same period. Javid, who was home secretary between 2018 and 2019, before briefly serving as chancellor until early 2020, wrote in the foreword to the report that he was proud of his record in government for tackling crime, but added: 'that said, there's clearly more to do.' 'History teaches us that economic activity flourishes in societies that value law and order. When consumers and businesses know that contracts will be honoured, and that the fruits of their labour will be protected from theft and the threat of violence, they have the confidence to work, to earn and to build something of value. Without this confidence we all suffer.' Labour has sought to crack down on crime, with Keir Starmer having said in opposition years of cuts to police funding and changes to sentencing rules were a 'Tory shoplifter's charter' for the rise in crime rates across the UK. However, there are concerns that a tight position in the public finances and the government pushing to increase defence spending could lead to funding restraint for public services in chancellor Rachel Reeves's spring spending review later this month. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Policy Exchange said it recommended cuts to other areas of public spending, while suggesting that defence funding must take priority. This however would complicate Labour's promises not to return to austerity, as well as campaign pledges to fix battered public services. Haldane, who is now the chief executive of the Royal Society of Arts, said: 'We are approaching what will almost certainly be a brutal, and what could be an electorally defining, public spending review. 'In an era of acute anxiety, this report is an arresting clarion – and wake-up – call to all political parties on the true and rising economic costs of crime and the societal consequences of continuing malign neglect of that most foundational of government responsibilities – the security of citizens.' Diana Johnson, the minister for crime and policing, said: 'In the next decade, this government plans to halve violence against women and girls and knife crime, and restore public confidence in policing and the criminal justice system, as part of the Safer Streets Mission. 'Through the Plan for Change, we will also bring visible policing back to communities, with 13,000 extra neighbourhood police officers, PCSOs and specials. Alongside this, the government will build 14,000 more prison places by 2031 to lock up dangerous offenders.'
