The economy may have eked out growth of 0.1 per cent in the final three months of last year, but businesses in the Chancellor’s West Yorkshire seat are counting the cost of her disastrous policies ahead of changes in April.
Many traders are affected by a reduction in business rate relief to 40 per cent, while employers’ National Insurance Contributions (NICs) are being raised by £25billion.
One shopkeeper in Rachel Reeves’s constituency recalls how, before the election, the then-shadow chancellor said she would look to cut business rates.
Debbie Hughes vividly remembers the day Reeves paid a visit to her carpet shop in the Yorkshire mill town of Farsley and made the apparent pledge.
Hughes, 46, notes how Reeves’s apparatchiks even took a picture of her with the politician for her campaign material.
Recalling the conversation, Hughes, whose firm employs six people, says: ‘She told me she was going to get the business rates to come down when she got in.
Beef: Butcher Kevin Harvey (pictured) said Chancellor Rachel Reeves was ‘hated’ over changes in her October budget which he claims will force small firms out of businesses
‘I told her exactly what I thought of her then. I said: “I think you’re lying. I’m sorry, I don’t believe you.”
‘I was prepared for her when she came. Ask any politician a question and they never try to give a straight answer.
‘I was throwing trick questions she had to respond to. A couple of guys who were with her had their heads down and they were looking like they were thinking “Oh no.”’
She adds: ‘The higher National Insurance costs mean you have to up your workload and your profit margins might have to come down. They are making it difficult for small businesses to survive.
‘They are not looking after the right people, in my eyes. The sooner they are out the better. I’m with Nigel Farage all the way.’
Showing a sample of beige carpet, Hughes brands it ‘beige Keir carpet’, adding: ‘That Keir Starmer, what a complete wally he is.’
Asked if the current economic situation was better or worse than under the Tories, she says: ‘It’s pretty much what I expected – absolutely worse than before.’
Across the road, equally disappointed butcher’s shop owner Kevin Harvey (pictured above) says Reeves is ‘hated around here’ for changes that will affect business from the start of the new tax year.
He warns the rise in National Insurance ‘is 100 per cent a huge burden’.
He adds: ‘You can’t do a job like this on your own. I need my staff.
‘We’re in a very affluent village and it’s not affected us as much as some areas. We’re always busy and I will be keeping my staff but the NIC rise does affect the business.
‘We have business rate relief that they’re taking away. There’ll be a lot of businesses going to the wall.’
Harvey, 55, has owned Harvey, Davis & Sons Butchers for 16 years and has worked there for 40.
He says that Reeves ‘hasn’t helped the small businessman, has she?’. But he adds: ‘We’ve just got to keep going.’
Squeeze: The Chancellor (pictured) cut Business Rate Relief to 40%, while employers’ National Insurance Contributions are being raised by £25bn
Elsewhere around Farsley, the mood is less polite. The owner of another long-standing family business, who does not wish to be named, calls the Budget ‘a farce’ – while one member of the public described Reeves as a ‘robbing b******’.
At the bottom of Town Street, close to a plaque commemorating Farsley’s history as the place where early Aston Martin sports cars were once built in the 20th century, grocer Raymond Sutcliffe believes there is still time for Reeves to change her mind.
The 61-year-old, whose family business was established more than a century ago in 1900, says: ‘I thought she might have gone on the back foot and thought again – and still could.
‘They should do a U-turn. But I also think they’re in a position where they’ve made that many mistakes, how can they go on the back foot with everything? They are totally out of their depth. I don’t think they have a bloody clue.’
Sutcliffe, who says he is so angry with Reeves he would bar her if she turned up at his shop, adds: ‘It’s the future I worry about, for my family who are running the shop.
‘It’s tough enough as it is. Shops are shutting left, right and centre.
‘I don’t know what they’re hoping to achieve – I can’t get my head around it.’
Reeves has hit confidence on the head with a sledgehammer
By ALEX BRUMMER City editor
The Chancellor cannot derive much cheer from the pick-up in the nation’s output in the final quarter of last year.
As encouraging as it is that the UK has avoided recession, it is worth recalling that
the economy Labour inherited was growing so robustly that an official from the Office for National Statistics described it in the first quarter as going ‘gangbusters’.
Indeed, all the major forecasters, including the Bank of England and the International Monetary Fund, suggested the UK could be among the fastest-growing economies in the G7 this year.
The gloomy rhetoric from Labour when it took the reins in July, the constant reference to black holes in the public finances and the £40billion tax-raising Budget hit business and consumer confidence on the head with a sledgehammer. A breakdown of what happened in the final quarter of the year illustrates this graphically.
Business investment, a key to future expansion, slumped by 3.2 per cent, the first decline in 15 months. The Government’s drive to build more houses fell on deaf ears with residential investment falling 0.8 per cent.
This was not helped by sticky mortgage rates, a fallout from the adverse market reaction to the Budget and rising American bond yields. Consumer spending then fell.
Net exports, likely to face further peril because of Donald Trump’s tariff war, slumped by 1.5 per cent. The Bank of England has halved its growth forecast for 2025 from 1.5 per cent to 0.75 per cent.
The Office for Budget Responsibility is also building in a sharp downgrade, and one would expect the IMF to do the same when it produces its next World Economic Outlook report for its meeting in April.
The only thing preventing the UK from recession is Labour’s cash injection in the public sector.
All that is doing is raising borrowing costs on the national debt and risks crowding the wealth-creating private sector out of the public markets.
Before the election Labour made hay by pointing to falling income per capita under Tory rule. Yesterday’s data shows it is happening again.
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