Britain as ‘at the edge of a crisis’ and the Labour government must ‘change tack’ to revive the floundering economy, according to one of Britain’s leading businessmen.
Lord Stuart Rose, the former boss of Marks & Spencer and Asda, said ‘we should all be worried about the state of Britain’ and called for ‘radical action’ to kick-start growth and create jobs.
The comments came just a day after the energy empire owned by Manchester United investor Sir Jim Ratcliffe, Ineos, said it has stopped investing in Britain in protest over Labour tax hikes.
The criticism from two leading business figures piles pressure on Chancellor Rachel Reeves amid fears of further tax hikes in her autumn Budget in November.
Labour has been widely criticised for derailing the economy since coming to power through a string of tax hikes.
Ministers have also pledged to overturn amendments to its employment rights bill, despite warnings that the plans will cost jobs and make it harder for firms to grow and hire staff.
In a dramatic intervention on Tuesday morning, Lord Rose told Times Radio: ‘I think we should all be worried about the state of Britain today.
‘Now, I am absolutely an optimist in my life. I’ve been working for over half a century. And today, I sit here and I look at the state of the nation and I say to myself, I believe we’re genuinely at the edge of a crisis.
‘If we don’t take some radical action and take notice of what’s going on, we’re going to find ourselves in a very difficult spot.’
The former boss of Marks & Spencer and Asda, Lord Stuart Rose, said the UK economy is on the edge of crisis
Economists have even suggested that the situation is so bleak that the government may be forced to go cap in hand to the International Monetary Fund for a bailout – as a previous Labour administration did in 1976.
Lord Rose said: ‘When the circumstances change, then you have to change your actions. And this government came in and said that it would actually bring growth as its number one priority.
‘We have got no growth in the economy. If you have no growth in the economy, you’re not creating any wealth. If you haven’t got any wealth, you can’t put into the nation the services that voters want and voted for. So, we’ve got to change tack.
‘There isn’t a direction of travel. There is no travel. We’re not travelling anywhere. We’re actually standing still in a lay-by while we decide what to do. That’s the real problem.
‘Britain is stuck here for the next three months waiting with real anxiety to see what will happen about the next level of taxation that will come through, which will burden business and actually will not encourage growth.’
Turning to the Budget and the workers’ rights legislation, he went on: ‘I worry about why we have to wait three months for a Budget, because it’s abundantly clear that what we need to do is to take action on cutting costs, is to make sure that we stimulate growth.
‘We’re now facing the Employment Rights Bill… It will almost certainly go into law, and it will tighten up the relationship, tighten up the ability for people to be able to employ people. And we don’t need that at the moment.
‘We laugh at the Europeans, we laugh at the restriction in working practices in Europe, we laugh at the French, but we are in a situation here where we’ve gone from having a very flexible labour force, we’ve had business which is very flexible, and we’re going to make it more difficult. I don’t understand the mentality of that. Why do that now? Why make it harder?’
Lord Rose also criticised the sick note culture after a report by the Chartered Institute of Personnel and Development (CIPD) showed workers typically now take nearly two weeks off ill every year.
This is up from a little over a week before the pandemic – and led by those in the public sector with mental health the biggest cause.
‘We have arrived in a situation in Britain today where there is effectively no obligation to go to work. Absolutely none,’ said Lord Rose.
‘I’ve worked for 50 years. I think I’ve taken less than three weeks of sickness pay in 50 years. I go to work if I’m not feeling well. If I’m not well, I’ve got a headache or I’ve got a bad back or I feel uncomfortable or I feel a bit below par, what do we do? I go to work.
‘We just soldier on. We battle on. We need to have a little bit of grit around the place.
‘We need to make sure that people understand that actually this nation needs everybody to lean in, to make a contribution. And actually, we’ve all got to do this. It’s not somebody else’s job to do that. And it doesn’t account for me. It’s all our jobs to do it.’
Ineos said it is diverting all investment in Britain to the US (Mr Ratcliffe, left, next to then-Tottenham Hotspur chief executive Daniel Levy)
The comments came after Ineos, one of the world’s largest chemical manufacturers, said it is diverting all investment in Britain to the US in a protest over Labour’s tax raid on oil and gas producers.
The firm plans to plough £3billion into America after turning its back on the UK.
It says the move is due to high costs including the windfall tax, a levy on oil companies making massive profits thanks to the global high price of energy.
Brian Gilvary, chief executive of Ineos’s energy division, said: ‘We have stopped investing in Britain. Our future investment will not be [in] the UK. There’s no question of that.’
And Mr Gilvary said the company ‘cannot invest with any certainty because we can’t be sure what future tax rates will be’.
He added: ‘The problem is that the UK has become one of the most unstable fiscal regimes in the world from a perspective of natural resources and energy.’
Ineos shut down the Grangemouth oil refinery in Scotland this year after a century, leading to the loss of more than 400 jobs. The firm also operates the Breagh gas field and Clipper South rig in the North Sea, off the coast of Teesside.
And its olefins and polymers plant, also at Grangemouth, is at risk of closure due to high carbon taxes foisted on manufacturers.
It is also behind the Forties Pipeline System, which carries 30 per cent of the UK’s oil to shore.
Mr Gilvary said ‘the future lies’ in other countries, especially the US.
He told The Telegraph: ‘The United States has got a long track record. In the 1990s, it was producing 6.5million barrels of oil a day and importing 5million.
‘But now it’s producing 30million barrels a day and exporting. That’s proper energy security and a proper fiscal regime.
‘The US absolutely understands the importance of domestic supplies and how you can drive economic growth off the back of it, so that’s the place where we’ll be.’
In April, Sir Jim – whose wealth is estimated at £17billion – warned that Labour is ‘squeezing the life out of our abundant energy reserves in the North Sea’.
He said the threat of energy blackouts would become ‘more frequent and more serious as domestic gas production falls and critical infrastructure is decommissioned’.
This came after Britain became ‘perilously close’ to blackouts during a ‘cold snap’ in January, when there was little wind.
Energy secretary Ed Miliband hiked taxes on North Sea producers’ earnings from 75 per cent to 78 – making the duty among the highest in the world.
Windfall taxes were introduced in response to soaring energy prices following Russia’s invasion of Ukraine in 2022, and will now be extended until the end of the decade.
Mr Miliband’s Net Zero ambitions have recently been blamed for a shock rise in energy bills that will see millions of people paying more this winter.
Regulator Ofgem said ‘policy costs’ imposed by the energy secretary have contributed to the price cap rising at double the rate forecast by industry analysts.
Households will pay more to switch off wind turbines when they are generating too much power – as well as funding gas plants to step in when the wind is not blowing.
The Conservatives’ energy spokesperson Claire Coutinho said: ‘Sir Jim Ratcliffe is right – sky-high energy prices and crippling carbon taxes are causing the death of British industry.
‘Ed Miliband needs to put growth and jobs ahead of his obsession with Net Zero, scrap the ban on new oil and gas licences and back the North Sea. Cheap energy must come first.’
In 2023, Sir Jim – who has an estimated net worth of £17billion – accused the Government and the Competition and Markets Authority of being ‘increasingly hostile to business’.
The tycoon highlighted the watchdog’s decision to block a £790million takeover of a concrete additives firm by Ineos, as well as the windfall tax on North Sea oil and gas firms and lack of support for manufacturing.
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