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British business is heading for a “January of discontent” with the possibility of the country dipping into recession, shadow business secretary Andrew Griffith has claimed.
He said Sir Keir Starmer’s Labour government had “trash talked” the economy and introduced “horror show” employment reforms and an anti-business Budget, bringing growth to a halt.
Griffith was a minister in the last Conservative government, which lost the trust of business after Brexit, Liz Truss’s botched Budget and Boris Johnson’s “fuck business” approach.
But he claimed in an interview with the Financial Times that the Tories could claw back that support with an approach focused on deregulation and a smaller state, arguing that business’s love-in with Labour was over.
Speaking ahead of the Bank of England’s decision to hold interest rates and forecast zero growth in the final quarter of 2024, Griffith laid the blame firmly at the government’s door. He predicted a “January of discontent” where businesses would face a “very, very difficult period”.
“By and large businesses don’t fail in December,” he said. “They’ll have bought their stock, the rent bills don’t fall due until January, and it’s only after the Christmas period that the reality sinks in and you’ve got the whole long year ahead of you.”
The Tory MP, a former chief financial officer at Sky, said some economists believed that the UK was already in recession “on a per capita basis” in the third quarter of this year.
“I’m not a commentator and it’s not a forecast, but you ask ‘could we be in recession’? Yes we could.” He cited the cumulative effect of “the summer of trash talking” by ministers about the state of the public finances, the delay in holding the Budget and then the tax rises in the Budget itself as contributing to the economy’s problems.
Labour produced a list of more than 120 business leaders expressing support during the general election campaign — although last week only 28 of them were still prepared to do so when asked by City AM.
Griffith, who lent his London townhouse to Johnson as his Tory leadership campaign headquarters in 2019, said he did not blame business for trusting Labour, claiming that Starmer had “pulled the wool over their eyes”.
“This government has crossed the street to pick a fight with business, it is a far left socialist government in the way it thinks about the economy, reallocating, redistributing significantly from the private sector to the public sector.”
He said most senior ministers did not understand business and did not have much experience in the private sector — although many corporate leaders said the same about the previous Tory government.
Griffith acknowledged that the Conservative party had lost some support in the business world after 14 years in power, but attributed some of that to the challenges of being the incumbent through several uniquely difficult periods including the pandemic and the Ukraine war.
For now the Conservative party is not drawing up a list of concrete policies, not least given that the next general election is still four and a half years away. Despite criticising the rise in employer national insurance contributions in the Budget, the Tories are not pledging to cut the tax if they form the next government.
However, Griffith hinted that a Tory government could unravel some of Labour’s package of employment reforms, which he dubbed “a horror show” for businesses.
“We think the scope is too wide, it takes us back to the 1970s in terms of the ability of trade unions to enter businesses,” he said.
“Clearly, if we are voting against something, seeking to make significant amendments to their bill . . . and if most of the measures that are being introduced in this bill are reversals of previous Conservative positions, the FT . . . may make that inference.”
Griffith believes that business wants lighter taxes and a smaller state — reflecting the position of his boss Kemi Badenoch, who appointed him to his position last month.
In a sign of his thinking, Griffith stressed that the Conservatives were committed to maintaining the national living wage, but added that it was also true to say that the wage floor was “a burden on business”.
