Job cut plans pile pressure on Reeves to scrap policies

Chancellor faces fresh calls for a rethink from private sector

- MILLIE COOKE

A damning new report suggests businesses are preparing to cut staff and hike prices, piling pressure on chancellor Rachel Reeves to U-turn on key economic policies.

In yet another sign that the Treasury’s woes aren’t going away, a fresh report from the Confederation of British Industry (CBI) indicated private sector firms expect to face another significant fall in activity over the next three months, having already seen a decline over the previous three-month period.

Activity has been flat or falling since the middle of 2022, reflecting a prolonged period of stagnation. But the upcoming increase in national insurance contributions has prompted firms to assess their budgets urgently, the CBI said.

The survey sparked renewed calls for the chancellor to “handbrake turn” on the policies announced in her autumn Budget, with the Liberal Democrats saying she “must accept that [it] has not worked”.

The warnings come as Ms Reeves prepares to make a major announcement on planning reform. Ahead of a speech later this week, the chancellor promised to “take an axe to red tape that slows down approval of infrastructure projects”, betting her economic credentials on a commuter town boom in the hope it will spark growth in the UK.

She is expected to use her speech to support a proposed third runway at Heathrow airport and to endorse expansion at Gatwick and Luton. Asked about the plans on the BBC yesterday, the chancellor refused to be drawn on what she said was speculation but said decisions would be subject to “full collective ministerial responsibility”.

“A lot [has] changed in terms of aviation,” she said. “There’s huge investment going on in electric planes, and also a third runway will mean that instead of circling London, flights can land at Heathrow.”