Rachel Reeves’s caution could prove as damaging as Liz Truss’s recklessness |
Rachel Reeves is trying her best to avoid any comparisons to Liz Truss’s infamous mini-budget, but her excessive caution could prove just as damaging, writes Michael Martins in today’s Notebook
Reeves’s caution is hurting the real economy
At a certain point, excessive caution can become as damaging as recklessness because there is rarely reward without risk. If we are constantly hedging bets, then chances are, we’re not moving forward.
Against that backdrop, most people understand what risk the Chancellor is trying to avoid at this month’s Budget: anything that could even faintly resemble Liz Truss’s 2022 mini-Budget. But her approach of soft-launching the Budget over several weeks so that every tax rise, big and small, can be pre-absorbed by markets has brought its own costs.
I say this because much of my work involves convincing CEOs and investors of the UK’s merits as an investment destination. And while I have not yet met a single investor whose decision hinges on the withdrawal of the cycle-to-work scheme, the cumulative effect of the steady drumbeat of closures, trims or reviews of business-facing incentives is having an impact, even if gilt yields remain steady. It is increasingly clear that the Treasury’s constantly updated “menu of pain”, as one........